NextEnergy Solar Fund mulls tap issuance

The London-listed vehicle is planning to use the proceeds to pursue a growing deal pipeline after spending £98m on five UK plants in April.

London-listed Next Energy Solar Fund (NESF) is planning a tap issuance of 54.9 million shares amid what the vehicle describes as high market demand and rising power prices in the UK.

NESF, managed by NextEnergy Capital, said it would first sell 30,850,000 ordinary shares it already holds before offering 24,035,000 new ones. 

Conditions were right for NESF to raise capital in an “efficient and cost-effective manner,” it added, as the fund seeks fresh dry powder to pursue a pipeline of assets it believes are available at attractive valuations.

The vehicle's financial debt at 30 June totalled £216.1 million ($285 million; €258 million), £99.9 million of which was held in long-term facilities and £116.2 million drawn in short-term loans. It said this was equivalent to 43.4 percent of gross asset value (GAV).

The fund's portfolio includes 33 assets generating a combined 414MW, including five UK solar farms it purchased in April for £98 million. Michael Bonte-Friedheim, NESF's chief executive, said at the time that the fund had a debt ceiling at 50 percent of GAV, implying that he was “comfortable” with the current level of leverage at about 44 percent.

NESF also reported its net asset value had increased from the first to the second quarter this year, citing rising power prices in the UK and the fund's positive operating results. NAV rose from £273.8 million on 31 March to £283.1 million on 30 June, boosting NAV per share from £.0985 to £1.109 over the period.