New Energy Solar Limited (ASX: NEW) has a diversified portfolio of solar assets globally. Through the diversified portfolio, the company help investors benefit from the global shift to renewable energy. The company does acquisitions of large-scale solar power plants with the long term contracted power purchase agreements.
New Energy Solar informed that New Energy Solar Manager Pty Limited, its investment manager and a subsidiary of Evans Dixon, has completed a capital raising of US$200 million for a US dollar denominated investment vehicle principally marketed to institutional and sophisticated investors in the United Kingdom (US Solar Fund plc or USF). USF is expected to be listed on the London Stock Exchange on 16th April 2019. USF focuses its investments in utility-scale solar power plants in the United States and other OECD countries in the Americas, which are “construction ready”.
The decision of establishing USF was motivated by the strong urge of European institutional investors to gain exposure in utility-scale solar infrastructure in the United States through a listed US dollar denominated investment vehicle. The establishment of USF is a strong endorsement of the investment rationale of New Energy Solar and the capabilities of its investment manager.
The creation of US Solar Fund plc will likely enable New Energy Solar to continue to grow and diversify through co-investment opportunities, as well as generate economies of scale for the business.
The CEO of the company, John Martin said that the USF mandate would assist the company in maintaining its market presence and provide access to a larger, more consistent, high-quality investment pipeline, with average deal sizes increasing. The capacity to co-invest will also allow the company to maintain its portfolio diversification, alongside an investor with a similar investment strategy. It is satisfying since sophisticated, global institutional investors are supporting the same investment strategy that the company has been implementing for the past three years, added by Mr. Martin.
An investment allocation policy will govern the co-investment opportunities, under which New Energy Solar and US Solar Fund plc will jointly seek investments in the United States and be offered the opportunity to invest in equal proportions, subject to available capital.
The investment manager of the company will waive payment of part of its management fees for NEW in recognition of the investment management economies of scale. The waiver results in a lower Base Management Fee structure, which will be effective from the listing date of US Solar Fund plc.
The fee reduction, however, is dependent on the successful LSE listing of US Solar Fund plc, the continuation of existing investment management arrangements for NEW and US Solar Fund plc and no change, or proposed change, in the management or governance of NEW or US Solar Fund plc.
On the price-performance front, the stock of New Energy Solar is trading at $1.385, a marginal increase of ~0.727% during the day’s trade with a market capitalisation of ~$489.09 million (on 12 April 2019 AEST 02:30 PM). The stock has generated a negative YTD return of 1.79%, with negative returns of 3.85%, 0.36% and 2.48%, respectively, over the past six months, three months and one-month period. Its 52-week high price stands at $1.50, and 52-week low price stands at $1.350, with an average trading volume of ~96,805.
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