NextEnergy Solar Regulatory News (NESF)

NOT FOR PUBLICATION, RELEASE, OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN, OR INTO THE UNITED STATES, CANADA, AUSTRALIA, JAPAN, SOUTH AFRICA OR ANY JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL OR TO U.S. PERSONS (WITHIN THE MEANING OF REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED).

THIS ANNOUNCEMENT IS AN ADVERTISEMENT AND NOT A PROSPECTUS. THIS ANNOUNCEMENT DOES NOT CONSTITUTE OR FORM PART OF, AND SHOULD NOT BE CONSTRUED AS, ANY OFFER FOR SALE OR SUBSCRIPTION OF, OR SOLICITATION OF ANY OFFER TO BUY OR SUBSCRIBE FOR, ANY SHARES IN NEXTENERGY SOLAR FUND LIMITED OR SECURITIES IN ANY OTHER ENTITY, IN ANY JURISDICTION, INCLUDING THE UNITED STATES, 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 OR INVESTMENT DECISION WHATSOEVER, IN ANY JURISDICTION. THIS ANNOUNCEMENT DOES NOT CONSTITUTE A RECOMMENDATION REGARDING ANY SECURITIES.

ANY INVESTMENT DECISION MUST BE MADE EXCLUSIVELY ON THE BASIS OF THE PROSPECTUS PUBLISHED OR TO BE PUBLISHED BY THE COMPANY AND ANY SUPPLEMENT THERETO

NextEnergy Solar Fund Limited

("NESF" or the "Company")

9 October 2014

Proposed Placing Programme in respect of up to 250 million New Shares

Publication of Shareholder Circular and Notice of General Meeting

Introduction

Following the announcement made by NESF on 18 September 2014 that the Company has deployed over 90 per cent of its IPO proceeds and has signed a revolving credit facility ("RCF") of up to £31.5 million, the Company is pleased to announce a proposed Placing Programme in respect of up to 250,000,000 New Shares.

The Company has, through the Developer and the Manager, secured (through letters of intent giving the Company exclusivity for a defined period) further sizeable investment opportunities with an investment value of over £210 million. A number of these opportunities are operational, with the remainder expected to be fully operational by 31 March 2015. In addition, the Manager is in negotiations with respect to a pipeline of further opportunities with an investment value of up to £333 million.

In view of the scale of the Company's pipeline of potential investments, it is targeting an initial issue of around 75,000,000 New Shares as part of the Placing Programme. This Initial Placing is expected to take place in early November 2014, following publication of the Prospectus, and, subject to there continuing to be sufficient attractive investment opportunities, the Directors will seek to utilise fully the Placing Programme over its 12-month life.

The Directors are also proposing to make certain changes to the Articles. Both the Placing Programme and the proposed amendments to the Articles will require the approval of Shareholders.

A Shareholder circular which provides, amongst other things, details of the Placing Programme and the proposed amendments to the Articles and includes a Notice of General Meeting (the "Circular") is being posted to Shareholders today. A copy of the Circular has been submitted to the National Storage Mechanism and will shortly be available for inspection at www.morningstar.co.uk/uk/NSM. The Circular will also shortly be available on the Company's website at www.nextenergysolarfund.com. Words and expressions that are defined in the Circular have the same meanings where they are used in this announcement, except where the context requires otherwise.

Placing Programme

Background to and reasons for the Placing Programme

The Directors believe the Company has performed well since its IPO in April 2014:

· having raised £85.6 million at the time of its IPO, the Company has utilised substantially all of these funds by investing in a portfolio of seven solar PV assets totalling 67.5MW (representing an investment value of £80.4 million);

· the Ordinary Shares having traded consistently at a premium to their opening NAV of 100p; and

· the Company is on track to deliver its targeted dividend of 5.25 pence per share for its first year, rising to 6.25 pence per share for the financial year ending March 2016.

The Company has, through the Developer and the Manager, identified in excess of £210 million of additional investment opportunities, which are subject to letters of intent with the relevant vendor, totalling circa 186 MWp. In addition, the Manager is in negotiations with respect to a pipeline of further opportunities with an investment value of up to £333 million. Accordingly, the Company expects that the RCF will have been committed to further investments within the next six weeks.

As the RCF will allow the Company to transact on only a small proportion of its near term investment opportunities and having regard to the Company's significant pipeline of attractive assets, the Board has decided to seek Shareholder approval to issue, on a non-pre-emptive basis, up to 250,000,000 New Shares pursuant to the Placing Programme.

The Company will invest the Net Issue Proceeds in accordance with its investment policy and intends to apply the Net Issue Proceeds to repay part or all of any amounts drawn down under the Revolving Credit Facility and to make further investments.

The Directors, who have been encouraged by a number of Shareholders and potential new investors to proceed with a substantial equity fund raising, believe that the Placing Programme is consistent with both the Company's growth ambitions as stated at the time of its IPO, and its objective of securing attractive investment opportunities in line with its investment strategy.

Benefits of the Placing Programme

The Directors believe that a Placing Programme will have the following benefits for Shareholders:

· provide additional capital which will enable the Company to fund the acquisition of additional solar assets from its substantial pipeline of investment opportunities;

· allow the Company to tailor the issue of New Shares to its pipeline of investment opportunities, reducing cash drag and providing the Company with the flexibility to undertake more than one substantial issue of New Shares over a 12-month period without incurring the costs of publishing a further prospectus;

· the acquisition of additional solar assets will diversify further the Company's portfolio;

· an increase in the Company's market capitalisation, which is expected to enhance its marketability, help to diversify its share register and improve secondary market liquidity in the Ordinary Shares; and

· reducing the ongoing charges borne per Share as the Company's fixed operating costs will be spread over a larger capital base.

Overview of the Placing Programme

The Placing Programme will provide the Company with the flexibility to issue both Ordinary Shares and/or C Shares. C Shares convert into Ordinary Shares on the occurrence of specified events, or at specified times. The Directors will decide on the most appropriate type of Shares to use at the time of any issuance. In making such a determination, the Directors will consider a number of factors, including the likely timing for making further investments, the operational status of such investments at the time they are likely to be acquired, the level of investor appetite for the New Shares and the timing of the issue of New Shares relative to the Company's next dividend record date.

New Shares issued under the Placing Programme will not be dilutive of the Net Asset Value per Ordinary Share. In order to ensure that is the case:

· In respect of any New Ordinary Shares issued under the Placing Programme, the issue price will be set at a premium to the Net Asset Value per Ordinary Share sufficient at least to cover the costs and expenses that the Directors believe are applicable to that issue of the New Ordinary Shares, thereby avoiding any dilution of the Net Asset Value of the existing Shares.

· In respect of an issue of C Shares:

- The costs and expenses that the Directors believe are attributable to the issue of C Shares will be paid out of the pool of assets attributable to the C Shares.

- The C Shares will convert into Ordinary Shares on a Net Asset Value for Net Asset Value basis.

- Prior to the conversion of C Shares into Ordinary Shares, the assets attributable to each class of Share will be maintained as separate pools and the Company's costs, expenses and liabilities arising during that period will be allocated to the pool to which they relate. General operating costs are expected to be borne pro-rata across the separate pools of assets.

The Prospectus in relation to the Placing Programme is expected to be published in November 2014. The Placing Programme will not be underwritten.

The Placing Programme is conditional, inter alia, on Resolution 1 being passed at the General Meeting and the publication of the Prospectus by the Company in relation to the offer of the New Shares. If these conditions are not satisfied in respect of any Placing under the Placing Programme, the relevant issue of the New Shares will not proceed.

Assuming (i) only New Ordinary Shares are issued pursuant to the Placing Programme at an issue price of 105 pence per Share (being the mid-market price of the Ordinary Shares as at 8 October 2014, being the last practicable date prior to publication of the Circular); and (ii) the Company issues 250,000,000 New Ordinary Shares (being the number of New Shares in respect of which the Board is seeking Shareholders' consent to disapply the pre-emption rights at the General Meeting), the Company would raise £·262.5million of gross proceeds from the Placing Programme.

Applications will be made for admission of the New Shares issued under the Placing Programme to the Official List (in the case of New Ordinary Shares application will be to the Premium Listing segment, and in the case of C Shares application will be to the Standard Listing segment of the Official List) 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. Both New Ordinary Shares and C Shares will be capable of being held in either certificated or uncertificated form.

The authority to allot the New Shares under the Placing Programme will lapse on the date falling 12 months after publication of the Prospectus, and the Directors' present intention is to utilise the authority in full during this 12 month period.

Amendments to the Articles

Amendments to the C Share rights

At present, the Company only has Ordinary Shares in issue. The Articles allow the Company to issue both Ordinary Shares and C Shares, with the C Shares being designed to ensure that a new issue of Shares does not unfairly dilute returns which have accrued on the Ordinary Shares already in issue. The Company has identified certain scenarios where in certain circumstances the rights presently attaching to C Shares and set out in the Articles may not operate with the intended effect, and could therefore disadvantage the existing Ordinary Shareholders. Resolution 2 to be proposed at the General Meeting therefore seeks to make some technical changes to the rights attaching to the C Shares so as to remove that possibility, as follows:

· Amending the definition of the "Calculation Date" so as to provide flexibility for the Directors to determine, at the time of any issue of C Shares, the most appropriate date for Conversion of that series of C Shares into Ordinary Shares (at present Conversion occurs either on a long-stop date of six months after issue or when 85% of the funds raised from the relevant C Share issue have been invested);and

· Amending the Conversion Ratio so that it (i) takes into account any dividends declared by reference to a record date prior to Conversion but not yet paid; and (ii) treats both the C Shares and the Ordinary Shares as equity, notwithstanding that, for technical reasons, IFRS requires the C Shares to be accounted for as a liability of the Company.

Amendments to the Articles - proceedings of Directors

In order to prevent the Company being deemed to be tax-resident in the United Kingdom, its Articles contain provisions requiring meetings to be held in Guernsey. Due to recent changes in UK tax policy, the holding of Board meetings in the UK will not of itself result in the Company becoming tax resident in the UK. The Company therefore proposes to amend its Articles so as to allow it to hold Board meetings outside Guernsey. It remains the intention of the Directors that Board meetings will be held in Guernsey, and that the Board would only avail itself of the ability to hold them elsewhere if circumstances dictated that this was necessary and appropriate.

General Meeting

A General Meeting of the Company to consider and, if thought fit, approve the Proposals has been convened to be held at 11.30 am on 4 November 2014 at 1 Royal Plaza, St Peter Port, Guernsey, GY1 2HL. The notice convening the meeting is set out in Part 3 of the Circular. The Resolutions to be proposed at the General Meeting will be:

i. a special resolution giving the Directors authority to allot up to 250,000,000 New Shares (which may be Ordinary Shares or C Shares) under the Placing Programme on a non-pre-emptive basis;

ii. a special resolution amending the Articles with respect to the rights attaching to the C Shares amending the Calculation Date definition and Calculation Ratio; and

iii. a special resolution amending the Articles with respect to the provisions relating to the holding of Board meetings in Guernsey.

Expected Timetable

The exact date of the publication of the Prospectus and the start date of the Placing Programme, is not known as at the date of the Circular but is expected to be on or around 5 November 2014. The Placing Programme will end 12 months after the date of publication of the Prospectus.

Notes:

1. These times and dates are indicative only. If any of the above times and/or dates change, the revised times and/or dates will be notified to Shareholders by announcement through a Regulatory Information Service.

2. All references to times are to times in London, England, unless otherwise stated.

Enquiries:

Notes to Editors:

NextEnergy Solar Fund

NextEnergy Solar Fund (www.nextenergysolarfund.com) is a specialist investment fund focused on operational solar photovoltaic ("PV") assets located in the UK. The Company intends to provide investors with a sustainable and attractive dividend that increases in line with RPI over the long term and an element of capital growth through the re-investment of net cash generated in excess of the target dividend.

Further information on NextEnergy Capital and WiseEnergy is available at www.nextenergycapital.com and www.wise-energy.eu.