NextEnergy Solar Regulatory News (NESF)

THIS ANNOUNCEMENT, AND THE INFORMATION CONTAINED IN IT, IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, SOUTH AFRICA, ANY MEMBER STATE OF THE EUROPEAN ECONOMIC AREA (OTHER THAN THE UNITED KINGDOM, IRELAND, THE NETHERLANDS AND SWEDEN) OR ANY OTHER JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL OR RESTRICTED BY LAW (COLLECTIVELY, "RESTRICTED JURISDICTIONS") OR TO US PERSONS (WITHIN THE MEANING OF REGULATION S UNDER THE US SECURITIES ACT OF 1933, AS AMENDED).

THIS ANNOUNCEMENT DOES NOT CONSTITUTE OR FORM PART OF ANY OFFER TO SELL OR ISSUE, OR ANY SOLICITATION OF ANY OFFER TO PURCHASE OR SUBSCRIBE FOR, ANY SECURITIES IN THE COMPANY IN ANY RESTRICTED JURISDICTION, NOR SHALL IT (OR ANY PART OF IT OR THE FACT OF ITS DISTRIBUTION) FORM THE BASIS OF, OR BE RELIED ON IN CONNECTION WITH, ANY CONTRACT THEREFOR OR INVESTMENT DECISION IS RESPECT OF ANY SUCH SECURITIES. WITHOUT PREJUDICE TO THE FOREGOING GENERALITY, THIS ANNOUNCEMENT DOES NOT CONSTITUTE A RECOMMENDATION REGARDING ANY SECURITIES.

INVESTORS SHOULD NOT PURCHASE OR SUBSCRIBE FOR ANY SECURITIES REFERRED TO IN THIS ANNOUNCEMENT EXCEPT ON THE BASIS OF INFORMATION CONTAINED IN A PROSPECTUS TO BE PUBLISHED BY THE COMPANY IN MID-OCTOBER 2016 IN CONNECTION WITH THE COMPANY'S SHARE ISSUANCE PROGRAMME. NEITHER THIS ANNOUNCEMENT NOR ANY PART OF IT SHALL FORM THE BASIS OF OR BE RELIED ON IN CONNECTION WITH OR ACT AS AN INDUCEMENT TO ENTER INTO ANY CONTRACT OR COMMITMENT WHATSOEVER.

15 September 2016

NextEnergy Solar Fund Limited ("NESF" or the "Company")

Publication of Circular re. New Share Issuance Programme

The Board is pleased to announce that the Company has published today a circular to shareholders (the "Circular") in connection with a proposed share issuance programme which the Company intends to put in place in respect of up to 350 million New Ordinary Shares and/or C Shares (the "Share Issuance Programme"). The Circular, which contains details of the resolution to be put to Shareholders concerning the disapplication of pre-emption rights in respect of the Share Issuance Programme (the "Resolution") and the notice convening an extraordinary general meeting of the Company for 10.00 a.m. on 11 October 2016 (the "EGM") at which the Resolution will be proposed, will be posted to Shareholders later today. Copies of the Circular will be available shortly on the Company's website (www.nextenergysolar.com) and the National Storage Mechanism (www.morningstar.co.uk/uk/nsm).

Subject to the Resolution being passed at the EGM, the Company expects to publish a prospectus in connection with the Share Issuance Programme (the "Prospectus") in mid-October 2016, following which it intends to undertake a first issue comprising a placing and an offer for subscription (the "Initial Issue"). A further announcement in respect publication of the Prospectus and of the Initial Issue will be made in due course.

Unless otherwise defined, capitalised words and phrases in this announcement shall have the meaning given to them in the Circular.

Background to, and Reasons for the Share Issuance Programme

In April 2014 the Company raised gross proceeds of £85.6 million through an initial public offering. Subsequently, the Company raised additional gross proceeds of £264.5 million through a combination of a 12-month Share issuance programme pursuant to a prospectus issued in October 2014 and the 2016 Tap Issuance Programme. The last issue pursuant to the 2016 Tap Issuance Programme, being the issue of 9,215,926 Ordinary Shares raising gross proceeds of £9.5 million announced on 9 September 2016, was significantly oversubscribed.

The Group has also raised funds through debt facilities, comprising a combination of short- and medium-term debt and amortising long-term debt. As at 31 August 2016, the Group had drawn down short- and medium-term debt and amortising long-term debt of £73.2 million and £99.9 million respectively, whilst £68.5 million remained undrawn under its £120 million revolving credit facility. 

As at 31 August 2016, the Company had invested £481.4 million in 33 assets amounting to 414MW installed solar capacity. The Investment Advisor is in advanced discussions, on behalf of the Company, regarding opportunities to acquire a number of projects with a total capacity in excess of 230MW. Although the Company may not proceed with all or any of these opportunities, the Board is confident that the Company's current available capital will be substantially committed to new acquisitions by November 2016.

In addition to the near-term investment opportunities, the Investment Advisor has identified a significant pipeline of investment opportunities which it is considering for investment. The Board anticipates that assets from this pipeline and other new investment opportunities that may arise will be acquired out of funds raised pursuant to the Share Issuance Programme, borrowings or a combination of both. 

The Share Issuance Programme will allow the Company to meet investor demand for its Shares and to capitalise on its investment pipeline and new investment opportunities.

Benefits of the Share Issuance Programme

The Directors believe that the Share Issuance Programme will have the following principal benefits for Shareholders:

· the Share Issuance Programme will allow the Company to tailor the timing and quantum of the issue of New Shares to its pipeline of investment opportunities, reducing cash drag and providing the Company with the flexibility to undertake multiple issues of New Shares over a 12-month period without incurring the costs of publishing a further prospectus for each such issue;

· issues of New Shares pursuant to the Share Issuance Programme will only be undertaken on the basis that they are not, after fees and expenses associated with the relevant Issue, NAV dilutive for existing Shareholders;

· it is expected that the net proceeds of each Issue will be used to invest in additional UK solar assets, further diversifying the Company's portfolio. The Company may also elect to reduce its borrowings with a portion or all of the net proceeds;

· an increase in the size of the Company should enhance its marketability, broaden its investor base over the longer term and improve secondary market liquidity in the Ordinary Shares; and

· an increase in the size of the Company should result in a reduction in its ongoing charges borne per Ordinary Share as its operating costs will be spread over a larger capital base.

Overview of the Share Issuance Programme

Under the Share Issuance Programme, the Company is proposing to issue up to 350 million New Shares through a series of issues. Each Issue will comprise either a placing to institutional investors (which, at the discretion of the Directors in consultation with the Bookrunners, may be undertaken in conjunction with an offer for subscription to the public) or an issue to one or more of the Bookrunners for sale in the secondary market in response to market demand for the Ordinary Shares. 

The Company will have flexibility under the Share Issuance Programme to issue both Ordinary Shares and/or C Shares. All New Ordinary Shares will be issued at a premium to the prevailing Net Asset Value per Ordinary Share which will be at least sufficient to cover the costs and expenses of the relevant Issue. The issue price of any C Shares issued pursuant to the Share Issuance Programme will be £1.00 per C Share. Typically, C Shares convert into Ordinary Shares on a Net Asset Value for Net Asset Value basis once substantially all of the net proceeds of the C Share issue have been invested. The costs and expenses of any issue of C Shares and any other costs and expenses which the Directors believe are attributable to the C Shares will be paid out of the pool of assets attributable to the C Shares and accordingly will not dilute the Net Asset Value of the Ordinary Shares. The Directors, in consultation with the Bookrunners, will decide on the most appropriate type of Shares to issue in relation to each Issue based on a number of factors, including the anticipated net issue proceeds from that Issue, the likely timing for investing those net proceeds in acquiring solar assets and the expected operational status of such assets at the time they are likely to be acquired.

The Share Issuance Programme will open when the Company publishes a prospectus in relation to the Share Issuance Programme, which is expected to be in mid-October 2016, and it is anticipated that there will be a separate closing for each Issue such that New Shares will be allotted on such dates as are determined by the Directors until the earliest to occur of:

· the first anniversary of the date of the Prospectus;

· the date on which an aggregate of 350 million New Shares have been admitted to the Official List and to trading on the main market of the London Stock Exchange; and

· such other date as may be agreed between the Company and the Bookrunners.

The size and frequency of each Issue will be determined at the discretion of the Directors in consultation with the Bookrunners. Issuances may take place at any time prior to the final closing date for the Share Issuance Programme (being the earliest to occur of the above).

Applications will be made for admission of each Issue of New Shares to the Official List (in the case of New Ordinary Shares, to the premium segment and, in the case of C Shares, to the standard segment) and to trading on the main market of the London Stock Exchange. New Ordinary Shares, including any arising on conversion of C Shares, will rank pari passu in all respects with the existing Ordinary Shares (save for any dividends or other distributions made, paid or declared out of the profits of the Company attributable to the Ordinary Shares by reference to a record date before the date of their issue). 

The Share Issuance Programme is conditional on, inter alia, the Resolution being passed at the EGM and the publication of the Prospectus.

The net proceeds of New Shares issued pursuant to the Share Issuance Programme will be used to fund acquisitions of additional assets in accordance with the Company's investment policy, for working capital purposes and/or to repay debt.

Initial Issue Pursuant to Share Issuance Programme

The Directors expect, subject to market conditions, to announce an initial Issue pursuant to the Share Issuance Programme, comprising a placing and offer for subscription, when the Prospectus is published in mid-October 2016. The Directors have yet to determine whether the Initial Issue will be in respect of New Ordinary Shares or C Shares. Shareholders will be sent a copy of the Prospectus when it is published, which will explain how they can apply for New Shares pursuant to the Initial Issue through the offer for subscription.

For further information:

Notes to Editors:

NextEnergy Solar Fund

NESF is a specialist investment company that invests in operating solar power plants in the UK. Its objective is to secure attractive shareholder returns through RPI-linked dividends and long-term capital growth. The Company achieves this by acquiring solar power plants on agricultural, industrial and commercial sites.

NESF has raised equity proceeds of approximately £350m since its initial public offering on the main market of the London Stock Exchange in April 2014. It also has credit facilities of £242.5m in place (Macquarie and Santander: £120m, MIDIS: £55.0m, Bayersiche Landesbank: £44.9m and NIBC: £21.7m).

NESF is differentiated by its access to NextEnergy Capital Group (NEC Group), its investment manager and adviser, which has a strong track record in sourcing, acquiring and managing operating solar assets. WiseEnergy is NEC Group's specialist operating asset management division, providing solar asset management, monitoring and other services to over 1,250 utility-scale solar power plants with an installed capacity in excess of 1.7 GW. NextPower II is NEC Group's private equity fund with initial commitments of €150m, investing in operating solar power plants and focused on consolidating the substantial, highly fragmented Italian solar market.

Further information on NESF, NEC Group and WiseEnergy is available at www.nextenergysolarfund.com, www.nextenergycapital.com and www.wise-energy.eu.

Important Notice

Each of Cantor Fitzgerald Europe, Fidante Capital, Macquarie Capital and Shore Capital is authorised and regulated in the United Kingdom by the FCA and acting only for the Company in connection with the matters described in this announcement. Persons receiving this announcement should note that none of Cantor Fitzgerald Europe, Fidante Capital, Macquarie Capital or Shore Capital will be responsible to anyone other than the Company for providing the protections afforded to customers of Cantor Fitzgerald Europe, Fidante Capital, Macquarie Capital or Shore Capital, or for advising any other person on the matters described in this announcement.