19 April 2016
BLUEFIELD SOLAR INCOME FUND LIMITED
Acquisition and Construction Update
The Board of the Bluefield Solar Income Fund Limited (LON: BSIF) (the "Company") is pleased to announce that it has entered into a binding sale and purchase agreement (the "SPA") to acquire a 4.1 megawatt peak ("MWp") ground-mounted solar photovoltaic ("PV") plant (the "Plant"); and announces the successful connection prior to 31 March 2016 of the construction assets previously acquired.
Acquisition
Pursuant to the SPA, the Company has acquired Bluefield Harrier Limited ("Harrier") for £14.4 million (including working capital and transaction costs), which through its wholly-owned subsidiary New Energy Business Solar Limited ("NEBS") owns the Plant. The acquisition brings the total energy capacity of the Company's portfolio to 402 MWp.
The Plant, which is connected into a car manufacturing plant located in Burnaston, Derby, was commissioned in July 2011 and benefits from a fully RPI-linked 25 year Feed-in Tariff ("FiT"). The Plant provides electricity to Toyota Motor Manufacturing (UK) Limited pursuant to the terms of its lease and derives the entirety of its revenue under the FiT accreditation.
The Board believes the acquisition will be beneficial to shareholders for the following reasons:
· Further diversification into FiT: acquisition of the Plant gives the Company greater access to the FiT revenue regime, which is fully RPI-indexed and therefore in line with the Company's objectives;
· Reduced exposure to power price fluctuations and increased linkage to RPI: the Plant receives 100% of its revenue under FiT and this revenue is 100% RPI-linked;
· The Plant has four years of operating record, benefiting from a remaining FiT term of over 21 years; and
· The return on the investment is expected to be accretive to the Company's cashflow and net asset value.
The acquisition has been fully funded through the amended and restated facility agreement with The Royal Bank of Scotland plc ("RBS") and Investec Bank plc ("Investec"), dated 22 January 2016, (the "Credit Facility"), which is now drawn for a total of approximately £180.3 million, with total group borrowing of £194.5 million.
The Company's investment adviser, Bluefield Partners LLP (the "Investment Adviser"), is also the investment adviser to the selling shareholders of Harrier and certain members of the Investment Adviser hold Ordinary and B Shares in Harrier.
James Armstrong, Michael Rand and Giovanni Terranova (the "Bluefield Related Parties") are, or have been within the last 12 months, directors of a subsidiary of the Company and are therefore related parties of the Company. The Bluefield Related Parties own, in aggregate, 15 ordinary shares and 84 B shares in Harrier. The Bluefield Related Parties also have outstanding shareholder loans to Harrier.
The total consideration payable to the Bluefield Related Parties in respect of both their ordinary and B shares in Harrier and outstanding shareholder loans is £275,770.03.
In addition to the Bluefield Related Parties' holding of ordinary and B shares in Harrier, certain other members of Bluefield together own, or are the ultimate beneficial owners of, ordinary B shares in Harrier and have outstanding shareholder loans. None of these other members of Bluefield is a related party to the Company.
Based on the amounts involved the transaction falls to be treated as a "smaller party transaction" as defined in Annex 1 of the United Kingdom Listing Authority's Listing Rule 11.
Construction Update
The Company is further pleased to announce that each of the eight construction projects acquired as part of the prospective pipeline 258 MWp referred to in the Company's prospectus published on 26 October 2015 was successfully connected prior to 31 March 2016, qualifying under the Renewable Obligation regime for 1.3 Renewable Obligation Certificates ("ROCs").
The Company can confirm that it intends to meet or exceed its target dividend of 7.07 pence per ordinary share in respect of the current financial year, which ends on 30 June 2016, with the intention of this rising annually with RPI thereafter. The total dividends in the previous financial year were 7.25 pence per share. On 26 October 2015, the Company declared its first interim dividend for the current financial period of 3.25 pence per ordinary share, which was paid on 15 December 2015.
Comment
John Rennocks, the Company's Chairman, stated, "In conjunction with the successful connection of eight construction projects under the 1.3 ROC regime, this acquisition demonstrates the continued growth and development of the Company.
"With our portfolio now exceeding 400 MWp, and with the proportion of total fixed revenues being approximately 99% of total revenues until the end of the current financial year in June 2016, and then in excess of 65% until the end of June 2017, our shareholders are benefiting from the Company adopting a highly defensive power price strategy whilst also delivering a sector leading dividend."
Enquiries:
James Armstrong / Mike Rand / Giovanni Terranova
Bluefield Partners LLP - Company Investment Adviser
Tel: +44 (0)20 7078 0020
Tod Davis / David Benda
Numis Securities Limited - Company Broker
Tel: +44 (0)20 7260 1000
Kevin Smith
Heritage International Fund Managers Limited - Company Secretary & Administrator
Tel: +44 (0)1481716000
Tom Karim
CNC
Tel: +44(0)20 3219 8820 / +44(0)7923 293 399
Note to editors
About Bluefield Solar Income Fund Limited
The Company is a Guernsey-registered investment company focusing on large scale agricultural and industrial solar assets. It had an initial public offering of shares on the main market of the London Stock Exchange in July 2013 and currently has over 309 million shares in issue.
BSIF seeks to provide shareholders with an attractive return, principally in the form of income distributions, by investing in a diversified portfolio of solar energy assets, each located within the UK, with a focus on utility scale assets and portfolios on greenfield, industrial and/or commercial sites. The Company intends to pay quarterly distributions.
About Bluefield Partners LLP (Bluefield)
Bluefield was established in 2009 and is an investment adviser to companies and funds investing in solar energy infrastructure. It has a proven record in the selection, acquisition and supervision of large scale energy and infrastructure assets in the UK and Europe. The team has been involved in over £1.25 billion of solar PV funds and/or transactions in both the UK and Europe since 2008, including over £500m in the UK since December 2011.
Bluefield has led the acquisitions, and currently advises on over 70 UK based solar PV assets that are agriculturally, commercially or industrially situated. Based in its London office, Bluefield's partners are supported by a dedicated and highly experienced team of investment, legal and portfolio executives.
Bluefield was appointed Investment Adviser to the Company in June 2013.
