Fundraising

Australia’s Walsh & Company eyes $230m solar IPO

Proceeds will be used to buy a US-based portfolio of projects with 130MW capacity, while other potential acquisitions are under review.

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Walsh & Company, a Sydney-based fund manager, is considering a A$300 million ($230 million; €197.8 million) initial public offering for its New Energy Solar investment business, at the Australian Stock Exchange.

The IPO is expected to be priced at between A$1.45 and A$1.55 per stapled security, which will raise as much as A$300 million for a projected market capitalisation of between A$387.4 million and A$587.4 million, according to Herbert Smith Freehills, the legal advisor for the fund manager.

Proceeds from the IPO will be used to fund the acquisition of a further 130MW portfolio of 14 solar plants in North Carolina and Oregon in the US, as well as future opportunities from a pipeline of projects currently being reviewed.

New Energy Solar agreed to acquire the 130MW portfolio from US developer Cypress Creek Renewables last month for $108 million, which is expected to generate a five-year annual average yield of around 5.5 percent per annum before tax and borrowing. The portfolio also comes with an average annual PPA price escalation of 3.1 percent every year over an average 14.6-year PPA term.

New Energy Solar, which is a Sydney-based unlisted stapled entity comprising New Energy Solar Fund and New Energy Solar Limited, will be Australia’s first publicly listed solar-focused investment business, if it is granted quotation of its stapled securities and options on the ASX.

The business, which was founded in January 2016 with an initial size of A$180 million, focuses on investing in lower-risk, long-life, large-scale solar power plants and associated assets that generate emissions-free energy in the US, Australia and select Asia markets. It currently owns substantial majority interests in four utility-scale solar farms with a combined capacity of 225MW in the US.

Walsh & Company has around A$5 billion of client assets under management across global equities, property, private equity, fixed income and sustainable and social investments, it stated on its website.