NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, DIRECTLY OR INDIRECTLY, IN OR TO THE UNITED STATES, AUSTRALIA, CANADA, NEW ZEALAND, THE REPUBLIC OF SOUTH AFRICA, JAPAN OR ANY MEMBER STATE OF THE EEA OR ANY OTHER JURISDICTION IN WHICH THE PUBLICATION, DISTRIBUTION OR RELEASE OF THIS ANNOUNCEMENT WOULD BE UNLAWFUL. THE INFORMATION CONTAINED HEREIN DOES NOT CONSTITUTE OR FORM PART OF ANY OFFER TO SELL, OR ANY SOLICITATION OF ANY OFFER TO SUBSCRIBE OR PURCHASE, ANY INVESTMENT IN ANY JURISDICTION. PLEASE SEE THE SECTION ENTITLED "DISCLAIMER" TOWARDS THE END OF THIS ANNOUNCEMENT.

This announcement is an advertisement and does not constitute a prospectus and investors must subscribe for or purchase any shares referred to in this announcement only on the basis of information contained in the prospectus (the "Prospectus") published by Foresight Sustainable Forestry Company Plc (the "Company") and not in reliance on this announcement.

A copy of the Prospectus will be subject to certain access restrictions, available for inspection on the Company's website: fsfc.foresightgroup.eu and at the registered office of the Company. This announcement does not constitute, and may not be construed as, an offer to sell or an invitation to purchase, investments of any description, or a recommendation regarding the issue or the provision of investment advice by any party.

28 October 2021

Foresight Sustainable Forestry Company Plc (the "Company")

Launch of Initial Public Offering

Initial institutional placing, offer for subscription and intermediaries offer for up to 200 million Ordinary Shares at 100 pence per Ordinary Share

Foresight Sustainable Forestry Company Plc, an externally managed investment company that will invest in UK forestry and afforestation assets ("Forestry Assets"), today announces the launch of its initial public offering ("IPO") on the Premium Segment of the Official List and the Main Market of the London Stock Exchange, by way of an initial institutional placing, offer for subscription and intermediaries offer for a target issue of up to 200 million ordinary shares (the "Ordinary Shares") at an initial issue price of 100 pence per Ordinary Share (the "Issue Price") (the "Initial Issue"). This announcement follows the Company's Intention to Float announcement dated 6 September 2021.

The Initial Placing, Offer for Subscription and Intermediaries Offer will open today and are expected to close on 18 November 2021.  Initial Admission and the commencement of dealings in the Ordinary Shares issued pursuant to the Initial Issue is expected to take place at 8.00 a.m. on 24 November 2021.

Highlights

Richard Davidson, prospective Chairman of Foresight Sustainable Forestry Company PLC, said:

"While UK forestry investment has previously seen high barriers to entry, we are delighted that Foresight Sustainable Forestry Company Plc is uniquely offering liquid access to UK forestry and afforestation assets to both institutional and retail investors. As well as the attractive dynamics of the timber market, investors will also benefit from significantly increasing demand for carbon credits and from forestry grant schemes and new UK government support for afforestation. The government is targeting 30,000 hectares of UK afforestation each year until 2050 and if the Company achieves its target issue size, it expects to have initiated around 10,000 hectares of afforestation development within the next year.  It is our IPO investors who will provide the enabling capital to make this happen, who will help unlock this positive change and make a true sustainability, biodiversity and ESG impact. We look forward to welcoming them in due course."

Bernard Fairman, Executive Chairman and Co-Founder of Foresight Group, said:

"As calls for action on climate change become louder each day and corporate net zero pledges continue to rise, forestry provides a unique investment opportunity as a truly sustainable asset class with exceptional ESG and sustainability credentials. Until now, there has been no listed UK-focused forestry investment company available to investors. The opportunity to invest in UK forestry strategies has only been open to investors who were willing to lock into relatively illiquid private structures, often with high minimum investment thresholds, or to acquire forest properties directly themselves. By launching Foresight Sustainable Forestry Company Plc, we are seeking to provide a unique offering which, as well as delivering attractive returns, has the potential to drive progressive sustainability results in the UK forestry industry over the coming years." 

The Investment Opportunity

Investors and companies are currently facing an inflection point, with calls for action on climate change becoming more urgent by the day, sustainability and ESG considerations further gaining in importance, and the risk of inflation increasing through deglobalisation, supply chain bottlenecks, and monetary response to COVID-19. In addition, 2020 saw the highest correlation across asset classes and geographies in two decades^[1], introducing higher volatility into investment portfolios.

Foresight Group believes forestry provides a unique investment opportunity, meeting investor requirements on climate, sustainability and ESG issues, inflation protection properties, and portfolio diversification. Forestry is a real asset and a natural and growing store of value, independent of the economic cycle. The Company is targeting returns of more than CPI + 5 per cent. per annum on a rolling five-year basis, based on the Net Asset Value once substantially invested. It is intended that the returns will be created by the capital appreciation of the underlying asset freeholds (timber asset value increases as well as value creation as Afforestation assets successfully pass through project development milestones) and cash yield, which is generated by the sale of timber from the harvesting of mature forest compartments, the value of Carbon Credits, and, on a more ancillary basis, opportunistic leases to renewable energy developers and ecotourism.

Why UK Forestry?

Why now?

Why the Foresight group?

The Target Seed Forestry Assets

The Target Seed Forestry Assets comprise both existing Standing Forests and Afforestation assets. 59 per cent. of the Target Seed Forestry Assets are mature Standing Forests; and 38 per cent. of the Target Seed Forestry Assets are Afforestation projects, that will be planted; the remaining 3 per cent. of the portfolio is made up of mixed assets (ie. existing forestry with adjacent Afforestation potential as part of the same property). The age profile of the Target Seed Forestry Assets is very varied, including compartments that are being actively harvested and a significant amount of unplanted Afforestation land. Once all assets are accounted for, the weighted average age of the Target Seed Forestry Assets is 19 years.

By number of assets (rather than area), the Target Seed Forestry Assets are weighted towards Scotland, with 23 (68 per cent.) of the 34 Forestry Assets located in Scotland; 9 (26 per cent.) located in Wales and 2 (6 per cent.) located in England.

The Target Seed Forestry Assets are planted with a variety of species. More than 10 commercial species are used across the sites, and a wide variety of native broadleaves are selected in each case, dependent on which species best suit the landscape. There are also areas of open ground and open water, much of which has potential for biodiversity and other enhancements.

The Target Seed Forestry Assets have been valued by Savills following the Royal Institution of Chartered Surveyors (RICS) Red Book principles.

The below provides details of the valuations.

The Company has entered into an Option Agreement, pursuant to the terms of which the Company has the option to acquire 100 per cent. of the Target Seed Forestry Assets through the acquisition of the shares in BFL I and BFL II.

The Option Agreement may be exercised at the discretion of Company and is subject to completion of due diligence and the agreement of satisfactory purchase agreement(s).

On-going annual expenses

The Company will also incur ongoing annual expenses which will include fees paid to the Investment Manager and other service providers in addition to other expenses which are currently expected to amount to 1.3 per cent. of Net Asset Value per annum (excluding all costs associated with making and realising investments) assuming a Net Asset Value on Initial Admission of £196 million.

Issue Statistics

Expected Initial Issue Timetable

*Applicants under the Intermediaries Offer are advised to check with their Intermediary as certain Intermediaries will close their offer period sooner in the day 

Expected Placing Programme Timetable

The dates and times specified are subject to change subject to agreement between the Company, the Investment Manager and Jefferies. All references to times in this document are to London time unless otherwise stated. Any changes to the expected timetable will be notified by the Company via a Regulatory Information Service.

Dealing codes

The dealing codes for the Ordinary Shares will be as follows:

The dealing codes for the C Shares will be as follows:

Further details of the IPO will be set out in the Prospectus, which, once approved by the FCA is expected to be made available for viewing at the National Storage Mechanism at https://data.fca.org.uk/#/nsm/nationalstoragemechanism and on the Company's website fsfc.foresightgroup.eu. The Company will release a further announcement upon the publication of the Prospectus. The Initial Issue is being conducted in accordance with the terms and conditions to be set out in the Prospectus. Any capitalised terms used but not otherwise defined in this announcement have the meaning set out in the Prospectus.

The Investment Manager has determined that the Company is subject to Article 9 of the EU Sustainable Finance Disclosure Regulation.

The Company's investment objective stipulates the targeted sustainable impact it aims to achieve through predominantly investment in sustainably managed Forestry Assets (including Standing Forests and Afforestation assets). The Company will seek to make a direct contribution in the fight against climate change through forestry and Afforestation carbon sequestration initiatives. The Company will seek to preserve and proactively enhance natural capital and biodiversity across its portfolio.

The SFDR Product Disclosure in relation to the Company can be viewed at fsfc.foresightgroup.eu.

Risks

Prospective investors should consider the suitability of such investment in consideration of their own investment objectives, attitude and appetite to risk. The attention of investors is drawn to the risks associated with an investment in the Ordinary Shares which are detailed in the Company's Prospectus. These risks include the following.

LEI: 213800W5S9JG5JFGYO91

For further information, please contact:

Disclaimer

This is a financial promotion and is not intended to be investment advice. The content of this announcement, which has been prepared by and is the sole responsibility of the Company, has been approved by Foresight Group LLP (the 'Investment Manager') solely for the purposes of section 21(2)(b) of the Financial Services and Markets Act 2000 (as amended). The Investment Manager is authorised and regulated by the Financial Conduct Authority ("FCA"), under reference number 198020, and its registered office is at The Shard, 32 London Bridge Street, London, SE1 9SG.​

This announcement is an advertisement and does not constitute a prospectus and investors must subscribe for or purchase any shares referred to in this announcement only on the basis of information contained in the prospectus published by the Company (and in any supplementary prospectus) (the "Prospectus") and not in reliance on this announcement. Investors should read the Prospectus before making an investment decision in order to fully understand the potential risks and rewards associated with the decision to invest in ordinary shares in the Company (the "Ordinary Shares"). Approval of the Prospectus by the Financial Conduct Authority should not be understood as an endorsement of the Ordinary Shares. When made generally available, copies of the Prospectus may, subject to any applicable law, be obtained from the registered office of the Company and will be made available for viewing at the National Storage Mechanism at https://data.fca.org.uk/#/nsm/nationalstoragemechanism and on the Company's website. This announcement does not constitute, and may not be construed as, an offer to sell or an invitation to purchase investments of any description, a recommendation regarding the issue or the provision of investment advice by any party. No information set out in this announcement is intended to form the basis of any contract of sale, investment decision or any decision to purchase Ordinary Shares in the Company.

Jefferies International Limited ("Jefferies") is authorised and regulated in the United Kingdom by the Financial Conduct Authority. Each of the Investment Manager and Jefferies is acting exclusively for the Company in connection with the matters described in this announcement and neither the Investment Manager nor Jefferies is acting for or advising any other person, or treating any other person as their respective client, in relation thereto and neither the Investment Manager nor Jefferies will be responsible for providing the regulatory protection afforded to their respective clients or advice to any other person in relation to the matters contained herein. This does not exclude any responsibilities or liabilities of Jefferies under the Financial Services and Markets Act 2000 (FSMA) or the regulatory regime established thereunder.

This announcement is not for publication or distribution, directly or indirectly, in or into the United States of America. This announcement is not an offer of securities for sale into the United States. The securities referred to herein may not be offered or sold in the United States, except pursuant to an applicable exemption from registration. No public offering of securities is being made in the United States.

The Ordinary Shares have not been and will not be registered under the United States Securities Act of 1933, as amended (the "US Securities Act"), or with any securities regulatory authority of any state or other jurisdiction of the United States, and may not be offered, sold, resold, pledged, delivered, distributed or otherwise transferred, directly or indirectly, into or within the United States. Outside the United States, the Ordinary Shares may be sold to persons who are not "US Persons", as defined in and pursuant to Regulation S under the US Securities Act ("US Persons"). The Company has not been and will not be registered under the US Investment Company Act and investors are not and will not be entitled to the benefits of the US Investment Company Act.

In addition, the Ordinary Shares have not been, nor will they be, registered under the applicable securities laws of Australia, Canada, New Zealand, the Republic of South Africa or Japan. Subject to certain exceptions, the Ordinary Shares may not be offered or sold in, Australia, Canada, New Zealand, the Republic of South Africa, Japan or any member state of the EEA (other than to professional investors in certain EEA member states in which the Company is registered with the national private placement regime) or to, or for the account or benefit of, any national, resident or citizen of the United States, Australia, Canada, New Zealand, the Republic of South Africa, Japan or any member state of the EEA (other than to professional investors in certain EEA member states in which the Company is registered with the national private placement regime). The issue of Ordinary Shares to investors subscribing for Ordinary Shares, and the distribution of this announcement, in other jurisdictions may be restricted by law and the persons into whose possession this announcement comes should inform themselves about, and observe, any such restrictions.

The value of shares and the income from them is not guaranteed and can fall as well as rise due to stock market and currency movements. When you sell your investment you may get back less than you originally invested. Figures refer to past performance and past performance is not a reliable indicator of future results. Returns may increase or decrease as a result of currency fluctuations.

This announcement may include statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "anticipates", "expects", "intends", "may", "will", "targeting" or "should" or, in each case, their negative or other variations or comparable terminology. All statements other than statements of historical facts included in this announcement, including, without limitation, those regarding the Company's financial position, strategy, plans, proposed acquisitions and objectives, are forward-looking statements.

Forward-looking statements are subject to risks and uncertainties and, accordingly, the Company's actual future financial results and operational performance may differ materially from the results and performance expressed in, or implied by, the statements. These factors include but are not limited to those described in the Prospectus. These forward-looking statements speak only as at the date of this announcement and cannot be relied upon as a guide to future performance. The Company, the Investment Manager and Jefferies expressly disclaim any obligation or undertaking to update or revise any forward-looking statements contained herein to reflect actual results or any change in the assumptions, conditions or circumstances on which any such statements are based unless required to do so by the Financial Services and Markets Act 2000, EU Prospectus Regulation (2017/1129) which is part of UK law by virtue of the European Union (Withdrawal) Act 2018 (as amended and supplemented from time to time (including, but not limited to, by the UK Prospectus Amendment Regulations 2019 and The Financial Services and Markets Act 2000 (Prospectus) Regulations 2019), the Prospectus Regulation Rules of the Financial Conduct Authority, the UK version of Regulation (EU) No 596/2014 of the European Parliament and of the Council on 16 April 2014 on market abuse which is part of UK law by virtue of the European Union (Withdrawal) Act 2018 (as amended and supplemented from time to time) or other applicable laws, regulations or rules.

None of the Company, the Investment Manager, Jefferies, or any of their respective affiliates, accepts any responsibility or liability whatsoever for, or makes any representation or warranty, express or implied, as to this announcement, including the truth, accuracy or completeness of the information in this announcement (or whether any information has been omitted from the announcement) or any other information relating to the Company or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of the announcement or its contents or otherwise arising in connection therewith. The Company, the Investment Manager, Jefferies, and their respective affiliates, accordingly disclaim all and any liability whether arising in tort, contract or otherwise which they might otherwise have in respect of this announcement or its contents or otherwise arising in connection therewith.

INFORMATION TO DISTRIBUTORS

Solely for the purposes of the product governance requirements contained within PROD 3 of the FCA's Product Intervention and Product Governance Sourcebook (the "Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the Product Governance Requirements) may otherwise have with respect thereto, the Ordinary Shares have been subject to a product approval process, which has determined that the Ordinary Shares to be issued pursuant to the Initial Issue are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in COBS 3.5 and 3.6 of the FCA's Conduct of Business Sourcebook, respectively; and (ii) eligible for distribution through all distribution channels as are permitted by the Product Governance Requirements (the "Target Market Assessment").

Notwithstanding the Target Market Assessment, distributors should note that: (a) the price of the Ordinary Shares may decline and investors could lose all or part of their investment; the Ordinary Shares offer no guaranteed income and no capital protection; (b) an investment in the Ordinary Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Initial Issue. Furthermore, it is noted that, notwithstanding the Target Market Assessment, Jefferies will only procure investors who meet the criteria of professional clients and eligible counterparties.

For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of the FCA's Conduct of Business Sourcebook; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the Shares.

Each distributor is responsible for undertaking its own Target Market Assessment in respect of the Ordinary Shares and determining appropriate distribution channels.

PRIIPS REGULATION

In accordance with the PRIIPs Regulation, a Key Information Document in respect of the Ordinary Shares has been prepared by the Investment Manager and is available to investors at fsfc.foresightgroup.eu. If you are distributing the Ordinary Shares, it is your responsibility to ensure that the Key Information Document is provided to any clients that are "retail clients" pursuant to the PRIIPs Regulation.

The Investment Manager is the only manufacturer of the Ordinary Shares for the purposes of the PRIIPs Regulation and Jefferies is not a manufacturer for these purposes. Jefferies makes no representations, express or implied in respect of, and does not or accept any responsibility whatsoever for the contents of any Key Information Documents prepared by the Investment Manager. Furthermore, Jefferies does not accept any responsibility to update the contents of any Key Information Documents in accordance with the PRIIPs Regulation, to undertake any review processes in relation thereto or to provide such Key Information Documents to future distributors of Ordinary Shares. Jefferies and its affiliates accordingly disclaim all and any liability whether arising in tort or contract or otherwise which it or they might have in respect of any Key Information Documents prepared by the Investment Manager.  Prospective investors should note that the procedure for calculating the risks, costs and potential returns in the Key Information Document are prescribed by laws. The figures in the Key Information Document may not reflect actual returns for the Ordinary Shares and anticipated performance returns cannot be guaranteed.