Greencoat raises €270m in IPO backed by State fund and AIB

Greencoat Renewables, a fledgling Irish energy company that acquired part of the original Bord Gáis wind portfolio this year, has raised €270 million in its initial public offering, €20 million above target as the deal attracted strong investor interest.

The company plans to list next Wednesday on the junior markets on the Irish and London stock exchanges.

The investors include the State's Ireland Strategic Investment Fund (ISIF) and AIB, who helped finance the initial portfolio, comprising 137 megawatts of wind farm assets in Munster, which the firm acquired this year from Canada's Brookfield Renewable Partners.

The assets equated to about a fifth of the wind portfolio that Brookfield purchased in 2014 from Bord Gáis, since renamed Ervia.

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Greencoat Renewables, set up by UK renewable energy investment group Greencoat Capital, aims to use the proceeds from the IPO to acquire more assets, initially focusing on wind in Ireland before extending to other euro-zone countries where solar assets will also be on its shopping list.

ISIF will own 28.2 per cent of the company after the flotation, with AIB holding 5.6 per cent, according to a stock exchange filing from Greencoat Renewables on Thursday. Newton Investment Management, a unit of BNY Mellon, has subscribed for 6.2 per cent of the stock, while Irish Life Investment Managers will take 5.6 per cent.

Reaction

"The positive reaction from investors and success of the initial offering is testament to the opportunity that the Irish renewable energy market presents," said Bertrand Gautier, partners of Greencoat Capital, the investment manager for the Dublin-based firm.

“The capital raised will allow the company to pursue its investment policy and grow a euro denominated renewable energy business of scale, focusing initially on the Irish onshore wind market.”

Mr Gautier told The Irish Times last month that Greencoat Renewables will pay a 1 per cent annual fee to the investment manager for up to the first €1 billion of assets it accumulates. Assets above that level face a 0.8 per cent fee.

“It’s a very simple and transparent model – no performance fees, no acquisition fees,” Paul O’Donnell, a fellow investment manager with Greencoat Capital, said at the time.

SSE Airticity, ESB and Brookfield count among the largest players in an otherwise fragmented market of wind farm operators in Ireland.

The company is targeting an annual rate of return of between 7 and 8 per cent on investments over the long term and an annualised dividend of 6c per share. The stock is being priced at €1 each at the time of admission for trading.

Greencoat Renewables has also identified Belgium, Finland, France, Germany and the Netherlands as countries that it plans to target in time.

Davy and RBC Capital Markets have been managing the share sale.