UK wind fund blows onto LSE in £205m float

INFRASTRUCTURE fund Greencoat UK Wind is hoping to raise at least £205m through a government-backed float that will jettison it to the main London market.

Managed by Greencoat Capital, the fund has bought interests in six wind farms from utility firms SSE and RWE.

Closed-end investment company Greencoat, which will be fully invested from launch, also has the option to increase the size of the offering by up to £55m.

The company will be the first listed infrastructure fund focused on wind according to Greencoat. It offers a six per cent dividend with the intention of increasing it in line with the Retail Prices Index (RPI).

The float has been backed by the Department for Business, Innovation and Skills and blue chip utility company SSE – which is divesting four wind farms – which have pledged to buy 50m and 43m shares respectively in a move to encourage private investment in the renewable energy sector.

“Operating wind farms should make attractive investment assets, particularly for investors seeking long-term, predictable returns,” said Stephen Lilley, partner of Greencoat Capital and chief executive of the wind fund.

Non-executive chairman Tim Ingram added: “With an anticipated initial dividend yield of six per cent, limited planned gearing, and investment only in proven operating wind farms, Greencoat UK Wind offers a very attractive opportunity for investors seeking a sustainable and growing return on their investment.”

The sale of the SSE and RWE wind farms is dependent on Greencoat successfully raising the capital and listing on the LSE. The day to day operations of the wind farms will be maintained by their current owners SSE and RWE.

The shares are expected to begin trading in March.

ADVISERS RBC CAPITAL MARKETS

DAI CLEMENT
LORNA SHEARIN
MATTHEW COAKES
RBC CAPITAL MARKETS

A host of big names worked on the Greencoat UK Wind IPO, including RBC Capital Markets, Barclays Bank and Winterflood Securities.

RBC Capital Markets acted as the sole global coordinator, sponsor and joint bookrunner, with Dai Clement, Lorna Shearin and Matthew Coakes on the team.

The investment bank has advised many high-profile utility transactions in recent years, and is an established adviser in the renewables and utilities space.

In 2011, RBC advised on the £2.4bn sale of Northumbrian Water. RBC also advised Irish energy firm Bord Gáis on its sale by the government.

In the past, Clement, head of European utilities and industrials, led the team advising a consortium on the acquisition of Open Grid Europe from E.ON.

His colleague Coakes, a managing director in European capital markets, was involved in the flotation of Kea Petroleum in 2010. Coakes has also worked with Ithaca Energy, Bayfield Energy, Serica Energy and Gulfsands Petroleum.

Shearin, co-head of European utilities and renewables at RBC, completes the trio.

Iain Smedley and Adam Welham joined from Barclays Bank, which acted as joint bookrunner on the offering. Darren Willis from Winterflood acted as the co-lead manager, and Tulchan Communications had a role as the public relations adviser.