Saturday 4 July, 2020

MPC Caribbean eyes US$22.8 million in rights issue

MPC Caribbean Clean Energy invests in renewable projects across the Caribbean.

MPC Caribbean Clean Energy invests in renewable projects across the Caribbean.

MPC Caribbean Clean Energy hopes to raise US$22.8 million in new shares under its rights issue.

The offer will allow existing shareholders to buy two new shares for each original share held. It opens on November 13 and closes on December 16.

The company intends to use the net proceeds to invest in an affiliated investment company, which will use these funds for the purpose of investing in clean energy projects and facilities with a particular focus in the Caribbean Basin.

The primary sector focus will be solar projects and wind farm operations. The company reasoned that the Caribbean Community member states are expected to add over 5.3 gigawatts of renewable energy capacity in the next eight years. It wants to win some of these contracts going forward.

MPC plans to issue 22.84 million new shares in the rights issue at US$1 or the equivalent of J$140 in Jamaica and Trinidad. The company holds two tranches of shares, one Class A share held by management and the 11.4 million class B shares held by shareholders. Following the rights issue, the company expects to hold approximately 34 million units.

“As an eligible shareholder, you may subscribe for new shares at a rate of two fully paid ordinary Class B shares in the company for every one fully paid ordinary Class B share in the Company held by you as at the Record Date,” said the company.

The Investment company, called  MPC Caribbean Clean Energy Fund LLC, will pool the additional equity along with other separate investments to eventually capitalise the fund to US$200 million. The investment company is backed by MPC Capital, an international asset and investment manager headquartered in Germany which already provided a US$5 million cornerstone commitment to the investment company.  

“The target size for the investment company is US$200 million, targeted to be raised within 12 months of the first closing date of the Investment Company and deployed within the four year investment period,” said the company.

A further 14 projects have been prioritized and form the indicative deal pipeline for the Investment Company.  These projects require a total investment of circa US$498 million and are expected to deliver up to 320 megawatts of new renewable energy capacity.

The first seed asset was ‘Paradise Park’ 50 MW solar plant in Jamaica with a total investment of approximately US$64 million.

‘Paradise Park’ reached financial close in June 2018 and was energized on June 6th 2019. Jamaica Public Service Co. (JPS) confirmed its acceptance on June 23, 2019. The investment company has acquired an effective stake of 34.4 per cent in the asset.

The second seed asset is ‘Tilawind’, a 21 MW onshore wind farm based in Costa Rica with a total value inclusive of debt at US$50 million. ‘Tilawind’ has been in operation since March 2015. The investment company and regional group Ansa McAL Limited have acquired the asset through a 50/50 joint venture.

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