Infinis prices at bottom of range

The initial public offering (IPO) of shares in Infinis Energy (Infinis) – the UK renewable energy firm backed by London-based fund manager Terra Firma – has been priced at a bottom-of-the-range 260 pence per ordinary share.

This values the firm at £780 million (€931 million; $1.3 billion). The expected price range was 260p to 310p, which would have valued Infinis at £930 million at the top end.

The offer represents 30 percent of Infinis’ share capital (reducing Terra Firma’s stake to 69 percent) and will deliver approximately £234 million of gross proceeds to Terra Firma – rising to £269.1 million if an over-allotment option is exercised in full (which would reduce the stake by a further four percent to 65 percent).

Based in Northampton, Infinis is the UK’s largest independent renewable energy producer. It is also the third-largest producer under the Renewable Obligation regime, the subsidy scheme designed by the country to help ramp up its non-fossils power generation.

The company was established in 2006 through a spin-out from Waste Recycling Group, which Terra Firma bought in 2003. The firm claims to have grown revenues by 19 percent, and EBITDA [earnings before interest, tax, depreciation and amortisation] by 25 percent, on an annualised basis over the last three years.

The group now owns and operates a portfolio of 147 power plants across the country, representing a total of 621 megawatts (MW) of landfill gas, wind and hydroelectricity installed capacity. It has a further 600MW of wind projects under development.

Terra Firma announced its intention to float the business on 21 October this year, in what was seen as a bid to attract more investors into the green energy fund it is looking to raise. That fund reportedly has a $2 billion target and $3 billion hard cap.

The IPO comes three months after the firm divested Phoenix Natural Gas, Northern Ireland’s largest gas network, to Australian fund manager Hastings Funds Management for between £600 million and £650 million.

Earlier this week, Terra Firma appointed Ingmar Wilhelm – former executive vice president and head of business development at Italian renewable energy business Enel Green Power – as a financial managing director.