Greencoat UK Wind blown away by £450m share issue

Renewable energy fund becomes the biggest investment company money-raiser so far this year with 2021's second-biggest share issue.

Greencoat UK Wind (UKW ) has achieved the second-biggest fund raise this year, with a share placing of £450m.

With inflows into closed-end funds recovering at a record pace – particularly into energy infrastructure – the £2.6bn investment trust said investor demand for the issue had ‘significantly exceeded’ the maximum £396m the company had sought. 

After discussions with fund manager Greencoat Capital and brokers RBC and Jefferies, the board said it decided to use part of its annual authority to issue 10% of its shares to raise a further £54m in a ‘tap’ issue that took the total to £450m.

This ranks behind the £504m raised by Schiehallion (MNTN ), the Baillie Gifford private equity fund, in a C-share issue in April.

However, it is the biggest share issue by a listed infrastructure fund this year and, combined with the £197m it raised in February, looks to have made UKW the biggest secondary share issuer of any investment company in 2020 so far.

The money will be used to fund the £250m investment in the Burbo Bank Extension offshore wind farm and partly repay the company’s £350m overdraft ahead of a further £400m in investment commitments to new wind farms in the next three months.

The share issue requires shareholder approval at a general meeting tomorrow.

Chair Shonaid Jemmett-Page said: ‘We are delighted to announce another successful and oversubscribed equity raise and we are grateful for the ongoing support we have received.’

Fund manager Stephen Lilley said: ‘This capital raise will help fund the investment in Burbo Bank Extension along with our previously announced commitments to invest in Windy Rig, Twentyshilling and Glen Kyllachy, currently being commissioned. We continue to see a strong pipeline of attractive investment opportunities.’

Launched in 2013, UKW has delivered a five-year total shareholder return of 50%, including quarterly dividends. The shares yield 5.4% and at 133.2p, up 0.4p this morning, stand on a 3.8% premium to Numis Securities’ estimate of 128.3p net asset value per share.

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