Foresight Solar IPO raises £150m

The vehicle, which had a target of £200m, will use the proceeds to buy eight UK projects with a 145.4MW combined capacity.

Foresight Group has raised £150 million (€176 million; $243 million) for a Jersey domiciled, London-listed vehicle that will focus on UK solar.

The new shares, which will commence trading on 29 October, were offered at £1 each to investors. The vehicle had an original target of £200 million.

Foresight Solar Fund, which will aim to buy stakes in ground-based solar assets, has already agreed to acquire six solar plants with a combined capacity of 126.7 megawatts (MW). The fund is expected to pay £170.8 million for the portfolio.

Foresight Solar is also in front line to buy two further plants with a combined capacity of 18.7MW. The solar farms, for which it has entered an exclusive agreement, are valued at £24.7 million.

The cash generated by these assets will support the distribution of a 6p annual dividend, to increase in line with inflation, from 1 January 2014. The surplus is to be reinvested to “support and grow net asset value,” Foresight said in a statement.

Kent-based Foresight is not new to the solar sector, having founded a dedicated team in 2007. The firm raised its first solar fund in 2008, followed by the Foresight Solar Venture Capital Trust (VCT) in 2012. The group now manages around £450 million of solar assets, including the UK’s biggest solar index-linked bond to date.

The IPO follows the launch of Bluefield Solar Income Fund, the first London-listed fund to focus on large UK solar assets. The vehicle, which collected £130 million in mid-July, has made four investments to date and is more than 75 percent committed, according to broker Numis Securities. Shares in the vehicle now trade at a 3.6 percent premium to NAV.

Both launches come amid a flurry of listings by renewable energy companies, eager to tap investors’ hunger for yield in a low interest rates environment. Recent floats have included Greencoat UK Wind, which raised £260 million in March, and The Renewable Infrastructure Group, which collected £300 million in July.

Terra Firma also announced its intention to list Infinis, the UK’s largest independent renewable energy producer, in November. The firm is understood to be targeting a £1 billion IPO for the company.