Archived article
Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.
magazineBalance sheet clean up in renewables trusts space
Several renewables investment trusts could issue a flood of new shares over the coming months, speculate analysts, after a blitz of project funding.
Greencoat Renewables (GRP), Greencoat UK Wind (UKW) and NextEnergy (NESF) are in the frame, while Foresight Solar (FSFL) is expected to refinance circa £70m of existing debt facilities by the end of June.
‘We have reviewed commitment and leverage levels and conclude that given the increasing levels of leverage, a number of the funds are likely to be looking to issue equity in the first half of 2019,’ says the investment trust team at broker Stifel.
More than £700m has been lavished on various solar and wind farm sites across the UK, Ireland and Sweden since the end of September 2018. That has left the balance sheets of some trusts stretched, prompting an anticipated spell of deleveraging.
While this would in theory cap share price returns in the short term Stifel believes it could also provide investors with discount access to an otherwise booming clean energy industry.
Popular industry trusts John Laing Environmental Assets (JLEN) and The Renewables Infrastructure Group (TRIG) have already fired the starting gun on the process having slashed debt to zero late last year.
Important information:
These articles are provided by Shares magazine which is published by AJ Bell Media, a part of AJ Bell. Shares is not written by AJ Bell.
Shares is provided for your general information and use and is not a personal recommendation to invest. It is not intended to be relied upon by you in making or not making any investment decisions. The investments referred to in these articles will not be suitable for all investors. If in doubt please seek appropriate independent financial advice.
Investors acting on the information in these articles do so at their own risk and AJ Bell Media and its staff do not accept liability for losses suffered by investors as a result of their investment decisions.
