REG - Digital 9 Infrastr. - Migration to Trading on the Premium Segment

Digital 9 InfrastructureAnnouncement

24/08/2022 16:45

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RNS Number : 1269X  Digital 9 Infrastructure PLC  24 August 2022

 

NEITHER THIS ANNOUNCEMENT NOR ANYTHING HEREIN FORMS THE BASIS FOR ANY OFFER TO
PURCHASE OR SUBSCRIBE FOR ANY SHARES OR OTHER SECURITIES IN DIGITAL 9
INFRASTRUCTURE PLC NOR SHALL IT FORM THE BASIS FOR ANY CONTRACT OR COMMITMENT
WHATSOEVER.

 

24 August 2022

Digital 9 Infrastructure plc

("DGI9" or the "Company")

Migration to Trading on the Premium Segment of the Main Market of the London
Stock Exchange and Admission to the Premium Listing Segment of the Official
List of the FCA

Further to the announcement of 15 August 2022, the Board of Digital 9
Infrastructure plc is pleased to announce that it has received confirmation
from the Financial Conduct Authority (the "FCA") that the Company is eligible
for the admission of its ordinary shares (the "Ordinary Shares") to the
premium listing segment of the Official List of the FCA.

Accordingly, the Company has made applications to the FCA and London Stock
Exchange plc (the "London Stock Exchange"), respectively, for admission of the
Ordinary Shares to the premium listing segment of the Official List of the FCA
and for a transfer of the Ordinary Shares from trading on the Specialist Fund
Segment to the Premium Segment of the Main Market of the London Stock Exchange
(the "Migration").

The Board believes that the Company will benefit over time from the Migration
with an increase of its profile as an investment company, diversification of
the Company's share register with access to blue chip UK and international
investors, as well as from potential FTSE index inclusion.

Admission is expected to occur with effect from 8.00 a.m. on 30 August 2022
("Admission").

The Company's existing ticker, ISIN, LEI and SEDOL will remain unchanged.

Working capital

In accordance with LR6.7.1R, the Company is of the opinion that the working
capital available to the Group (as defined below) is sufficient for its
present requirements, that is for at least the next 12 months from the date of
this announcement.

Investment Policy

As a result of the eligibility review, the Company has agreed with the FCA to
make certain non-material amendments to its Investment Policy. Specifically,
the Company has agreed that any maintenance, repairs and expansion capital
expenditure, including investment into new assets via an existing Investee
Company, will be required to be within the overall Size Restriction (as
defined below).

The amended Investment Policy, which has been approved by the Board, is set
out in the Appendix to this announcement.

FOR FURTHER INFORMATION

      Triple Point Investment Management                               +44 (0) 20 7201 8989

      Thor Johnsen / Andre Karihaloo
      J.P. Morgan Cazenove                                            +44 (0) 20 7742 4000

      William Simmonds / Jérémie Birnbaum (Corporate Finance)

      James Bouverat / Liam MacDonald-Raggett (Sales)
      Akur Capital                                                    +44 (0) 20 7493 3631

      Tom Frost / Anthony Richardson / Siobhan Sergeant
      FTI Consulting

      Mitch Barltrop / Gina Magnin                                    +44 (0) 7807 296 032

                                                                      +44 (0) 7815 585 751

                                                                      dgi9@fticonsulting.com (mailto:dgi9@fticonsulting.com)

LEI: 213800OQLX64UNS38U92

IMPORTANT INFORMATION

Each of Akur Limited ("Akur")  (which is regulated in the UK by the FCA)
and J.P. Morgan Securities plc (which conducts its UK investment banking
activities as "J.P. Morgan Cazenove") (which is authorised by the Prudential
Regulation Authority (the "PRA) and regulated in the UK by the FCA and the
PRA), is acting exclusively for the Company and for no‐one else in
connection with the Migration and other matters described in this announcement
and will not regard any other person as its client in relation thereto and
will not be responsible to anyone for providing the protections afforded to
its clients or providing any advice in relation to the matters described
herein. Neither Akur nor J.P. Morgan Cazenove, nor any of their respective
directors, officers, employees, advisers or agents accepts any responsibility
or liability whatsoever for this announcement, its contents or otherwise in
connection with it or any other information relating to the Company, whether
written, oral or in a visual or electronic format.

NOTES TO EDITORS:

 

Digital 9 Infrastructure plc (DGI9) is an investment trust listed on the
London Stock Exchange with ticker DGI9. The Company invests in the
infrastructure of the internet that underpins the world's digital economy:
digital infrastructure.

 

The number 9 in Digital 9 Infrastructure comes from the UN Sustainable
Development Goal 9, which focuses the fund on investments that increase
connectivity globally and improve the sustainability of digital
infrastructure. The assets DGI9 invest in typically comprise scalable
platforms and technologies including (but not limited to) subsea fibre, data
centres, terrestrial fibre, and wireless networks.

 

From its IPO in March 2021 and four subsequent placings, DGI9 has raised total
equity of £905 million and a revolving credit facility of £375
million, and invested into the following data centres, subsea fibre and
wireless networks:

 

·   Aqua Comms, a leading owner and operator of 20,000km of the most modern
subsea fibre systems - the backbone of the internet - with a customer base
comprising global tech and global telecommunications carriers (April 2021);

·    Verne Global, the leading Icelandic data centre platform, with 40MW
of high intensity computing solutions in operation or development, powered by
100% baseload renewable power (September 2021);

·     EMIC-1, a partnership with Meta on a 10,000km fibre system from
Europe to India (July 2021);

·   SeaEdge UK1, a data centre and landing station for the North Sea
Connect subsea cable, part of the North Atlantic Loop subsea network,
improving connectivity between the UK, Ireland, Scandinavia and North America
(December 2021);

·     Host Ireland, a leading enterprise broadband provider that owns and
operates Fixed Wireless Access networks (April 2022);

·     Volta, a premier data centre based in central London, providing
6MW retail co-location services (April 2022);

·    Ficolo, a leading Finnish data centre and cloud infrastructure
platform, with c.23MW of data centre capacity, powered by 100% renewable power
and distributing surplus heat to district heating networks (July 2022); and

·   Arqiva, the only national terrestrial television and radio broadcasting
network in the United Kingdom - providing data, network and communications
services, as well as a national IoT connectivity platform (announced June
2022).

 

The Investment Manager is Triple Point Investment Management LLP ("Triple
Point") which is authorised and regulated by the Financial Conduct Authority,
with extensive experience in infrastructure, real estate and private credit,
while keeping ESG principles central to its business mission. Triple Point's
Digital Infrastructure team has over US$ 300 billion in digital
infrastructure transaction experience and in-depth relationships across global
tech and global telecoms companies. For more information, please
visit www.triplepoint.co.uk.

 

The Company's Ordinary Shares were admitted to trading on the Specialist Fund
Segment of the Main Market of the London Stock Exchange on 31 March 2021.

 

For more information, please visit www.d9infrastructure.com
(http://www.d9infrastructure.com) .

 

APPENDIX

Investment policy

The Company intends to achieve its investment objective by investing in a
diversified portfolio of Digital Infrastructure Investments which provide key
infrastructure for global data transfer (subsea fibre-optic networks, wireless
networks and terrestrial fibres) and data storage (data centres), all of which
contribute to facilitating global digital communication.

The Company is focused on the provision of Digital Infrastructure integrated
with green and cleaner power in line with UN Sustainable Development Goal 9:
"Build resilient infrastructure, promote inclusive and sustainable
industrialization and foster innovation".

The Company seeks to invest in assets or Investee Companies which typically
have secured medium to long term contracts underpinned by high quality
counterparties.

The Company invests (directly or via subsidiary companies) in a range of
Digital Infrastructure assets which deliver a reliable, functioning internet.
The portfolio will typically comprise future proofed, non-legacy, scalable
platforms and technologies including (but not limited to) subsea fibre, data
centres, terrestrial fibre, tower infrastructure and small cell networks which
meet the following criteria:

•     assets and Investee Companies which deliver communications, data
transfer, interconnectivity and data storage;

•      assets and Investee Companies which derive a significant
proportion of their revenues from high quality counterparties (meaning, for
these purposes, companies (or their parent companies) which are included in
the FTSE 350 (or equivalent) or which are investment-grade rated by a
recognised grading agency) and/or a diversified portfolio of counterparties
that, by reason of its diversity, is resilient and well placed to weather
economic downturns;

•        assets and Investee Companies with high cash flow visibility
and resilience, specifically from medium to long term contracts or from a
diversified portfolio of shorter term contracts providing essential underlying
services.

The Group focuses, primarily, on Digital Infrastructure Investments where the
assets (or Investee Companies which own the assets) are operational and, where
appropriate, there is a contract in place with the end user and/or off-taker.
Where suitable opportunities arise, however, the Group may provide limited
funding during the Construction Phase or Development Phase of a Digital
Infrastructure asset, in particular, on a forward funding basis where
development risk for the Company is limited, subject to the restrictions set
out below.

Investment restrictions

The Company invests and manages its assets with the objective of spreading
risk and, in doing so, will maintain the following investment restrictions:

•       the Company will not invest more than 25 per cent. of Adjusted
Gross Asset Value in any single asset or Investee Company. When the Gross
Asset Value reaches £2 billion (as notified by the Company in its annual or
half year financial results report), this restriction will change to 20 per
cent. of Adjusted Gross Asset Value;

•        investments will be focused on acquiring a controlling interest
(meaning more than a 50 per cent. interest) in the relevant investment assets
or Investee Companies being acquired or invested in but can also comprise
minority interests (where appropriate minority protections are in place);

•        at least 50 per cent. of Adjusted Gross Asset Value will be
invested in developed markets, in particular (but not limited to), the UK, EU
and US;

•         neither the Company nor any of its subsidiaries will invest
in any assets or Investee Companies located in or with co-investment exposure
to any Restricted Territories;

•     neither the Company nor any of its subsidiaries will invest in any
assets or Investee companies using technologies or equipment under any current
prohibition ruling by relevant UK, EU, or US authorities, unless such
equipment is in the process of being removed in line with the guidelines of
such UK, EU or US authorities;

•       the Company may invest a limited amount in assets (or Investee
Companies which own assets) which are predominantly in construction, which
typically will be undertaken via a forward funding arrangement which pays a
return during the Construction Phase, with any investments which expose the
Company to development risk limited to, in aggregate, no more than 5 per cent.
of Adjusted Gross Asset Value, and the aggregate value of assets in
construction or development being no more than 20 per cent. of Adjusted Gross
Asset Value (such amount to be calculated as the aggregate value of all
material construction or development activities, including forward funded
developments, within Investee Companies);

•       neither the Company nor any of its subsidiaries will invest in
any listed entities, or in private closed-ended investment companies or any
funds of any kind; and

•       the Company itself will not conduct any trading activities which
are significant in the context of the Group as a whole.

Compliance with the above investment limits will be measured at the time of
investment and non-compliance resulting from changes in the price or value of
assets following investment will not be considered as a breach of the
investment limits.

For the purposes of the foregoing, the term "Adjusted Gross Asset Value" shall
mean the aggregate value of the total assets of the Company as determined with
the accounting principles adopted by the Company from time to time as adjusted
to include any third-party debt funding drawn by, or available to, any Group
company (which, for the avoidance of doubt, excludes Investee Companies).

Borrowing Policy

The Directors do not intend to use gearing at the Company level, other than
utilising short-term credit facilities for financing acquisitions (which could
be at the level of the Company or a Group company (which, for the avoidance of
doubt, excludes Investee Companies)), such borrowings to be at a Conservative
level. Intragroup debt between the Company and its subsidiaries, and the debt
of Investee Companies, will not be included in the definition of borrowings
for these purposes.

Long term gearing is likely to be applied at an Investee Company level in
order to enhance returns but will be at a prudent level, appropriate for the
particular Investee Company and sub-sector.

Hedging and Derivatives

The Company will not employ derivatives for investment purposes. Derivatives
may however be used for efficient portfolio management. In particular, the
Company may engage in interest rate or currency hedging or otherwise seek to
mitigate the risk of interest rate increases and currency movements.

The Group will only enter into hedging contracts and other derivative
contracts when they are available in a timely manner and on acceptable terms.
The Company reserves the right to terminate any hedging arrangement in its
absolute discretion. Any such hedging transactions will not be undertaken for
speculative purposes.

Cash management

The Company may hold cash on deposit for working capital purposes and awaiting
investment and, as well as cash deposits, may invest in cash equivalent
investments, which may include government issued treasury bills, money market
collective investment schemes, other money market instruments and short-term
investments in money market type funds ("Cash and Cash Equivalents"). There is
no restriction on the amount of Cash and Cash Equivalents that the Company may
hold and there may be times when it is appropriate for the Company to have a
significant Cash and Cash Equivalents position.

 

Defined Terms

 Adjusted Gross Asset Value          The aggregate value of the total assets of the Company as determined with the

                                   accounting principles adopted by the Company from time to time as adjusted to
                                     include any third-party debt funding drawn by, or available to, any Group
                                     company (which, for the avoidance of doubt, excludes Investee Companies).
 Admission                           the admission of the Company's ordinary share capital to trading on the
                                     Premium Segment of the Main Market of the London Stock Exchange
 Board                               the board of directors of the Company
 Conservative                        In respect of the Company's borrowing policy, the level of any short term

                                   revolving credit facility put in place by the Company will be determined by
                                     the quality of the investments to be made, including the covenant strength of
                                     counterparties within the proposed Investee Company, the terms available to
                                     the Company and the timeframe for which such short term borrowings are
                                     expected to be required. In any event, the aggregate level of borrowings will
                                     be expected to be no more than a maximum of 50 per cent. of Adjusted Gross
                                     Asset Value.
 Construction Phase                  in respect of a new development project, the phase where contracts have been

                                   agreed and relevant permits are in place.

 CTA 2010                            Corporation Tax Act 2010 and any statutory modification or re-enactment
                                     thereof for the time being in force
 Development Phase                   in respect of a new development project, the initial phase before relevant

                                   contracts or permits are in place.

 Digital Infrastructure              key services and technologies that enable methods, systems and processes for

                                   the provision of reliable and resilient data storage and transfer.

 Digital Infrastructure Investments  an investment which falls within the parameters of the Company's investment

                                   policy and which may include (but is not limited to) an investment into or
                                     acquisition of an Investee Company or a direct investment in Digital
                                     Infrastructure assets or projects via an Investment SPV or a forward funding
                                     arrangement.
 EU or European Union                The European Union first established by the treaty made at Maastricht on 7
                                     February 1992
 FCA                                 the Financial Conduct Authority
 Gross Asset Value                   the aggregate value of the total assets of the Company as determined with the

                                   accounting principles adopted by the Company from time to time.

 Group                               the Company and any other companies in the Company's group for the purposes of
                                     Section 606 of CTA 2010 from time to time, but excluding Investee Companies
 Investee Company                    a company or special purpose vehicle which owns and/or operates digital
                                     infrastructure assets or projects in which the Group invests or acquires
 Investment SPV                      a special purpose vehicle used to acquire or own one or more Digital
                                     Infrastructure Investments.
 London Stock Exchange               London Stock Exchange plc
 Migration                           the transfer of the Company's Ordinary Shares from trading on the Specialist
                                     Fund Segment to the Premium Segment of the Main Market of the London Stock
                                     Exchange and admission to the premium listing segment of the Official List
 Official List                       the official list maintained by the FCA pursuant to Part VI of the Financial
                                     Services and Markets Act 2000 (and any statutory modification or re-enactment
                                     for the time being in force)
 Ordinary Shares                     ordinary shares of no par value in the capital of the Company
 Restricted Territories              The Republic of China, Democratic People's Republic of Korea (North Korea),

                                   Russia, Iran and Syria.

 Size Restriction                    the investment restriction contained within the Company's Investment Policy
                                     which states:

                                     "…the Company will not invest more than 25 per cent. of Adjusted Gross Asset
                                     Value in any single asset or Investee Company. When the Gross Asset Value
                                     reaches £2 billion (as notified by the Company in its annual or half year
                                     financial results report), this restriction will change to 20 per cent. of
                                     Adjusted Gross Asset Value."
 UK or United Kingdom                The United Kingdom of Great Britain and Northern Ireland
 US or United States                 The United States of America, its territories and possessions, any state of
                                     the United States and the District of Columbia

 

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