REG - Ecofin US Renewables - Proposed disposal of distributed solar assets

Ecofin US Renewables Infrastructure TrustAnnouncement

13/12/2024 07:00

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RNS Number : 9488P  Ecofin US Renewables Infrastr.Trust  13 December 2024

Ecofin U.S. Renewables Infrastructure Trust PLC

13 December 2024

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF
THE MARKET ABUSE REGULATION (EU) 596/2014 AS IT FORMS PART OF UK DOMESTIC LAW
BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018, AS AMENDED. ON THE
PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS
INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

For immediate release.

 

Ecofin U.S. Renewables Infrastructure Trust PLC (the Company)

Proposed conditional disposal of distributed solar assets of the Company

Following the announcement by the Company of the conclusion of its strategic
review on 9 September 2024 and its decision to pursue a managed wind-down of
its business (the Managed Wind-Down), the Company announces that the Company
and RNEW Capital, LLC, a Delaware limited liability company (the Seller),
which is an indirect, wholly-owned subsidiary of the Company, have entered
into an agreement to sell (the Disposal) the Company's investments in US
distributed solar assets (the DG Portfolio) to a subsidiary of True Green
Capital Fund IV, LP (TGC Fund IV or the Buyer) for cash consideration of
approximately US$38.4 million plus the assumption by the Buyer of
approximately US$15.6 million of project-level debt and subject to certain
customary completion adjustments.

The Disposal is the first sale to be signed as part of the Managed
Wind-Down.  In order to implement the Managed Wind-Down and to facilitate the
orderly realisation of the whole portfolio owned by the Company and its group
(the Group) (the Portfolio) (including the Disposal), the Company's existing
investment policy (the Investment Policy) needs to be changed.  Both the
prior approval of the Financial Conduct Authority of the United Kingdom (the
FCA) and the consent of shareholders of the Company (the Shareholders) by an
ordinary resolution are therefore required for the proposed change to the
Investment Policy in accordance with the FCA's UK Listing Rules (the UK
Listing Rules). Completion of the Disposal is conditional, among other things,
upon Shareholder approval of the new Investment Policy.

Accordingly, a circular will be sent in due course to Shareholders (the
Circular) containing further details of the Managed Wind-Down and the Disposal
and convening a general meeting of the Company (the General Meeting) at which
an ordinary resolution to approve the proposed change to the Investment Policy
to facilitate the Managed Wind-Down will be proposed to Shareholders. A
further announcement will be made upon the publication of the Circular
following the prior approval of the new Investment Policy by the FCA in
accordance with the UK Listing Rules.

Further details of the Disposal and disclosures required under UK Listing Rule
7 (UKLR7) (because, as at the date of this announcement, the Disposal
constitutes a significant transaction outside the scope of the Company's
existing published Investment Policy), are set out in this announcement
(together with certain additional information required by UKLR7 set out in the
Appendix to this announcement).

Highlights and financial effects of the Disposal

·      The Disposal will be effected pursuant to a conditional
membership interest purchase agreement (the Sale Agreement) made between the
Seller, the Company and the Buyer under which the Seller has agreed to sell to
the Buyer all of the membership interests of those wholly-owned intermediate
holding companies through which the Company holds its interests in the DG
Portfolio, which comprises the "ECHO", "SED", "Ellis Road", "Oliver",
"Skillman" and "Delran" solar assets.

·      The headline enterprise value of the Disposal is US$54.5 million
(which includes the assumption of approximately US$15.6 million of debt
secured on the DG Portfolio) (Headline Price). The cash payment to be payable
by the Buyer to the Seller at completion of the Disposal (the Consideration),
after making certain customary adjustments and after a further reduction equal
to the Time-based Adjustment (which depends on the time taken to complete the
Disposal as described further in the section headed "Summary of the Sale
Agreement" below), is expected to be approximately US$38.4 million (assuming
completion by 31 January 2025).

·      The value of the DG Portfolio as at 30 June 2024 of US$63.2
million reduced on 27 November 2024 by US$11.3 million to US$51.9 million
following final completion of the project-specific back-leverage bank facility
in respect of the ECHO portfolio as announced on 28 November 2024 (the ECHO
Financing). The estimated Consideration therefore represents a discount of
approximately 26 per cent. to US$51.9 million, being the pro forma asset value
as at 30 June 2024 of the DG Portfolio after having taken account of the
additional ECHO Financing.

·      The net proceeds of the Disposal (after deduction of tax
liabilities and other costs, including the costs of the Disposal) are expected
to be approximately US$34.5 million. Such net proceeds will be used by the
Company to pay down the remaining balance on the Seller's revolving credit
facility (RCF) in full. As at 9 December 2024, US$32.5 million was drawn on
the RCF and the Group had cash balances of US$12.7 million.  Separately,
certain costs totalling US$2.5 million resulted from the Strategic Review and
were reflected in the Company's net asset value as at 30 June 2024.

·      As announced on 21 October 2024, the Seller (as borrower) has
entered into an agreement to amend and extend the RCF with KeyBank with effect
from 18 October 2024. Both tranches of the RCF are now set to mature on 18
October 2025. As from 18 October 2024, the total commitments of the two
tranches reduced to US$32.5 million and US$10.5 million respectively. Upon
completion of the Disposal, the total commitment of each tranche will be
reduced further to US$7.5 million and US$2.5 million respectively, and the
Seller is required to make a mandatory repayment of an amount equal to the
greater of the net proceeds of the Disposal or the amount to reach such
revised borrowing limits. The revised borrowing limits reflect the Seller's
lower borrowing base after the DG Portfolio is sold. Amounts repaid above the
revised borrowing limits cannot be reborrowed.

·      The Company also estimates that, taking into account the net
proceeds receivable pursuant to the Disposal, the unaudited net asset value
per ordinary share (as at 30 June 2024 on a pro forma basis) will be reduced
to approximately US$0.53, representing a discount of 18.5 per cent. to the
latest published unaudited net asset value per ordinary share as at 30 June
2024 of US$0.65).

·      Completion is expected to occur in the first quarter of 2025 and
in any event on or before 11 April 2025. Completion is subject to Shareholder
approval of the new Investment Policy at the General Meeting to be convened in
due course, the satisfaction or waiver of certain tax equity investor and
lender consents, final completion occurring in respect of certain projects and
certain other customary conditions under the Sale Agreement (the Conditions).
Subject to completion occurring, the Company expects the Seller to receive the
Consideration at completion of the Disposal less certain customary retentions
against the Consideration, including for certain post-completion adjustments.

·      A summary of certain risks to the Company as a result of the
Disposal is set out in the Appendix to this Announcement.

Background to and reasons for the Disposal

·      During 2023 and 2024, certain of the Company's largest
Shareholders have expressed a desire to the board of directors (the Board) to
receive a cash exit in respect of their shareholdings.  This feedback,
together with the wide share price discounts impacting the Company and other
alternative investment trusts, the inability to grow the Company in the short
term through the raising of new equity, the Company's relative scale and the
impact of this on the ability of Ecofin Advisors, LLC (the Investment Manager)
to manage the Company on a continuing basis, alongside other Shareholder
feedback, led to the Company's announcement on 8 September 2023 of a strategic
review focused on a sale of the Company's assets (the Strategic Review
Announcement).

·      As stated in the Strategic Review Announcement, the Board had
also considered other options for the future of the Company and, in connection
with this, approaches had been made to another listed closed ended investment
company in the sector with a view to combining the Company and the other
vehicle through a scheme of reconstruction under Section 110 of the Insolvency
Act 1986, to create a larger company with greater liquidity.  However, the
Company's proposal was not successful. The Company subsequently received
interest from a different listed closed ended investment company within the
wider renewables sector regarding such a transaction, but the Board did not at
that time consider the proposal to be in the best interests of Shareholders
and accordingly, the focus of the Board became that of a disposal of all of
the Company's assets in a single transaction and, failing that, a Managed
Wind-Down.

·      Following the Strategic Review Announcement, Marathon Capital
Markets, LLC (Marathon) was appointed to undertake an extensive sales process
focused on a sale of all the Company's assets. Despite considerable interest
and prolonged negotiations with a single party, no agreement could be reached
to sell the Company's entire Portfolio on acceptable terms.

·      Accordingly, following the unsuccessful attempt to effect a
disposal of the entire Portfolio, and after consultation with its advisers,
the Board, as announced on 9 September 2024, determined that it would be in
the best interests of the Company and its Shareholders to pursue a Managed
Wind-Down.

·      The first transaction identified is the Disposal of the DG
Portfolio. The Board recognises that the estimated Consideration, which is
expected to be approximately US$38.4 million (before deduction of tax
liabilities and other costs, including the costs of the Disposal), is below
the asset value of the DG Portfolio (as at 30 June 2024 of US$51.9 million on
a pro forma basis after having taken account of the additional ECHO Financing
but before allocation and deduction of group liabilities including the RCF).
 

·      The Board has been advised in respect of the Disposal by its
financial adviser, Marathon, and the Investment Manager. The Board considers
that the Buyer's offer is the best available, given the extensive process
carried out and the fact that the Company did not manage to secure any
acceptable offer for the total Portfolio. Accordingly, in the opinion of the
Board, the Disposal is in the best interests of the Shareholders of the
Company as a whole.

·      Subject to the approval by Shareholders of the new Investment
Policy, and as part of the Managed Wind-Down process, the Board is exploring
the potential realisation of the remaining assets in the Portfolio comprising
the "Whirlwind Energy" wind asset and its share of the "Beacon 2" and "Beacon
5" solar assets held by the Company through wholly-owned intermediate holding
companies (the Retained Projects). Together, the Company's share of the
Retained Projects has 113.2 MW generating capacity; approximately 64 per cent.
of the Company's total portfolio.

·      As a consequence of the Disposal, the Board has also resolved to
move to six monthly reporting in respect of the NAV as at the end of June and
December respectively, with the next NAV due to be reported as at 31 December
2024.

Information on the DG Portfolio

·      The DG Portfolio comprises a diversified portfolio of 63.7 MW of
solar assets in five different power markets and across six different states
in the US, representing approximately 36 per cent. of the Company's total
portfolio of 176.9 MW generating capacity. The DG Portfolio was acquired
partly at the time of the Company's IPO in December 2020 and subsequently
through a number of further investments. It is fully contracted with a strong
mix of power purchase agreements, with an average remaining contract term as
at 30 June 2024 of 16.0 years.

·      All of the assets comprising the DG Portfolio are 100% indirectly
owned by the Company.

·    The Company holds its indirect interests in the "ECHO", "Ellis Road",
"Oliver" and "Skillman" solar assets through tax equity partnerships where
finance has been provided by tax equity investors. In addition, external
financing has been provided in respect of the "ECHO" solar assets. A summary
of the recent tax equity funding and the back-leverage debt facility for the
ECHO projects is set out in the Appendix to this announcement. The Buyer will
acquire the DG Portfolio on completion with such project financing
indebtedness and tax equity arrangements remaining in place.

·      The pro forma gross asset equity value 1  attributable to the DG
Portfolio as at 30 June 2024 (after having taken account of the additional
ECHO Financing) was US$51.9 million, which represents approximately 46.6 per
cent. of the Company's unaudited gross assets of US$111.3 million (also
adjusted for the additional ECHO Financing), before allocation and deduction
of group liabilities, including drawdown under the RCF. The Company's
unaudited net asset value at 30 June 2024, after deduction of such group
liabilities, including under the RCF, was US$89.8 million. As at 30 June 2024,
US$30.0 million was drawn on the RCF.

·      The unaudited operating profits attributable to the DG Portfolio
in the six month period ended 30 June 2024 were US$2.1 million.

·      As a result of the Disposal, the DG Portfolio will no longer form
part of the Group's gross assets and the Group's profits will be reduced
accordingly. However, the Group will receive cash Consideration for the sale
of the DG Portfolio which will be used by the Company to pay down the
remaining balance on its RCF in full.

Information on True Green Capital Management and the Buyer

·      True Green Capital Management LLC (True Green Capital Management)
acts as the investment manager of TGC Fund IV. True Green Capital Management
is a private equity renewable infrastructure fund manager focused on
distributed solar power generation and associated opportunities. The firm is
based in Westport, Connecticut with an office in London, England and an
investment focus in the United States and Europe. The firm was founded in July
2011 and is led by a team of professionals with extensive experience and a
demonstrated capacity to originate, finance, construct, and operate
distributed renewable power generation projects.

·      TGC Fund IV is a limited partnership managed by True Green
Capital Management. An equity commitment letter (the ECL) has been received by
the Seller from TGC Fund IV in respect of the financing of the Consideration
to be paid by the Buyer.

Summary of the Sale Agreement

·      The Disposal is being made pursuant to the terms of the Sale
Agreement. Under the Sale Agreement, the Seller has agreed to sell all of the
membership interests of those wholly-owned, intermediate holding companies
through which the Company indirectly holds its interests in the DG Portfolio
to a subsidiary of TGC Fund IV.

·      The Sale Agreement contains certain representations, warranties,
and indemnities, given by the Seller which are customary for a transaction of
this nature. The Buyer is, in connection with the transaction, obtaining a
representation and warranty insurance policy (the R&W Policy). The R&W
Policy will be the sole recourse for the Buyer in respect of the
representations and warranties given by the Seller in the Sale Agreement, and
the Seller will have no liability to the Buyer in respect of the
representations and warranties other than in the case of fraud. As is
customary, the Seller will retain exposure post-completion of the Disposal in
respect of pre-completion taxes to the extent not recoverable by the Buyer
under the R&W Policy; however, such exposure is expected to be limited.

·      The cash Consideration payable by the Buyer to the Seller at
completion of the Disposal is determined after making certain customary
adjustments to the Headline Price (including for working capital, cash, unpaid
transaction expenses and project-level debt secured on assets within the DG
Portfolio to be assumed by the Buyer) and after a further reduction equal to
the Time-based Adjustment, which is determined by reference to the actual date
on which completion of the Disposal occurs. This agreed reduction is intended
to reflect the Seller's continued ownership of (and entitlement to cashflows
generated by) the projects within the DG Portfolio in the period prior to
completion. By way of example, the Time-based Adjustment will be US$500,000 if
completion occurs on 31 January 2025 and the estimated Consideration payable
of US$38.4 million assumes completion on such date. A further $3,333.33
reduction will apply for each day that closing occurs after 31 January 2025.

·      The Seller will be paid the Consideration at completion of the
Disposal less certain customary retentions against the Consideration,
including for certain post-completion adjustments.

·      Completion of the Disposal is conditional upon the approval of
the new Investment Policy (details of which will be set out in the Circular)
by Shareholders passing the necessary ordinary resolution at the General
Meeting, the satisfaction or waiver of certain tax equity investor and lender
consents, final completion occurring in respect of certain projects and
certain other customary conditions. The Board expects that, subject to all of
the Conditions being satisfied, completion of the Disposal is expected to
occur in the first quarter of 2025 (but in any event no later than 11 April
2025).

·      In the event that completion of the Disposal does not occur
because the Board changes its recommendation to Shareholders in respect of the
adoption of the new Investment Policy, or the ordinary resolution to approve
the new Investment Policy is not passed at the General Meeting, the Company
will be liable to pay a termination fee to the Buyer of US$1 million and the
Group will have to pay its own abort costs.

·      Conversely, the Buyer will be liable to pay a termination fee to
the Seller of US$2 million in circumstances where the Seller terminates the
Sale Agreement, and completion does not occur, due to material breach of the
Buyer's obligations under the Sale Agreement which has not been remedied or
due to the Buyer failing to complete when all the Conditions are otherwise
satisfied. The Buyer's obligation in respect of such termination fee is
supported by a limited guarantee given by TGC Fund IV.

General Meeting

·      The Disposal is conditional on the passing of the necessary
ordinary resolution to approve the new Investment Policy at the General
Meeting.  Details of the proposed new Investment Policy to implement the
Managed Wind-Down (including the Disposal) and notice of the General Meeting
will be set out in the Circular, which is expected to be sent to Shareholders
following the prior approval of the new Investment Policy by the FCA in
accordance with the UK Listing Rules.

Investment Manager

·      The ability of the Investment Manager to continue managing the
Company has been impacted by the uncertainty and the timeline to implement a
realisation transaction. In addition, the Investment Manager has informed the
Company that there is a re-focussing of the strategy of the TortoiseEcofin
Group away from the renewables sector.

·      It has become apparent to the Board that, whether or not the new
Investment Policy is approved by Shareholders, it will likely become necessary
to consider alternative management arrangements for the Company going forward.
Options include identifying and appointing a new investment manager and
external alternative investment fund manager (AIFM) for the Company (which may
not be straightforward or achievable in a reasonable timeframe), or for the
Company to move to a more self-managed model either with an external AIFM or
registering itself with the FCA as a small self-managed AIFM. The Board is
assessing the Company's existing management arrangements for the remaining
group, assuming completion of the Disposal; in July 2024 it appointed Brett
Miller to the Board, who has considerable experience in such matters, to
assist in this regard. The investment management agreement between the Company
and the Investment Manager has a 12 month notice period.

·      The uncertainty as to the ability of the Investment Manager to
manage the Company going forward has had a significant impact on the Board's
assessment, having regard to the advice of Marathon and the Investment
Manager, of the merits of the Disposal.

Marathon Capital Markets, LLC is acting as financial adviser to the Company in
connection with the Disposal.

 Enquiries

 Ecofin U.S. Renewables Infrastructure Trust PLC                        via the Company Secretary

 Patrick O'Donnell Bourke, Chair

 Brett Miller

 Ecofin Advisors, LLC                                                   +1 913 981 1020

 Edward Russell

 Eileen Fargis

 Marathon Capital Markets, LLC (Financial Adviser)                      +1 312 989 1348

 Andrea Rosko (Director, Marketing & Communications)

 Apex Listed Companies Services (UK) Limited (Company                   +44 20 3327 9720
 Secretary)

 

The person responsible for arranging for the release of this announcement on
behalf of the Company is Jennifer Thompson of Apex Listed Companies Services
(UK) Limited.

 

APPENDIX

Notifiable transaction

·      The Disposal constitutes a significant transaction for the
purposes of the UK Listing Rules, as the transaction is outside the scope of
the Company's published Investment Policy (as at the date of the execution of
the Sale Agreement) for the purposes of UK Listing Rule 11.5.1, and the
percentage ratio of the gross assets attributable to the DG Portfolio to the
Company's gross assets exceeds 25% under the "gross assets test" (as
determined in accordance with the UK Listing Rules).

Risk factors

The following summarises certain risks to the Company as a result of the
Disposal:

Conditions in the Sale Agreement

·      Completion of the Sale Agreement is conditional upon the adoption
of the new Investment Policy, the satisfaction or waiver of certain tax equity
investor and lender consents, final completion occurring in respect of certain
projects and certain other customary conditions. There can be no assurance
that these Conditions will be satisfied (or, where capable of waiver, waived),
in which case completion will not occur and the Group will not receive the
Consideration.

·      In addition, the Buyer and/or Seller are entitled to terminate
the Sale Agreement and withdraw from the Disposal if the Conditions are not
satisfied on or before the longstop date of 11 April 2025.

·      The Buyer is also entitled to terminate the Sale Agreement and
withdraw from the Disposal in certain circumstances including, but not limited
to, where certain material adverse changes have occurred in relation to the DG
Portfolio prior to completion.

Loss of Consideration

·      If the Disposal does not complete, the Seller will not receive
the Consideration from the Disposal and, consequently, the transaction costs
incurred by the Group in connection with the Disposal that are not contingent
on completion occurring would not be offset by such Consideration. In the
event that completion does not occur because the Board changes its
recommendation to Shareholders in respect of the adoption of the new
Investment Policy, or the resolution to approve the new Investment Policy is
not passed, the Company will be liable to pay a termination fee to the Buyer
of US$1 million and the Group will have to pay its own abort costs.

Pre-Completion changes in the Portfolio

·      During the period from the signing of the Sale Agreement to
completion, events or developments may occur, including changes in the
investment performance and outlook of the Portfolio, or external market
factors, that could make the terms of the Sale Agreement less attractive for
the Group. The gap between the signing of the Sale Agreement and completion is
expected to be up to four months, but the Group (acting through the Seller)
would be obliged to complete the Disposal notwithstanding such events or
developments.

Non-financial information in relation to the Disposal

Material Contracts of the Continuing Group

·      Save as disclosed below, no contracts have been entered into
(other than contracts entered into in the ordinary course of business) by the
Group excluding those members of the Group to be sold as part of the Disposal
(the Continuing Group), either (a) within the two years immediately preceding
the date of this announcement  which are or may be material to the Continuing
Group; or (b) at any time, which contain any provision under which the
Continuing Group has any obligation or entitlement which is or may be material
to the Continuing Group as at the date of this announcement.

·      Sale Agreement

Details of the Sale Agreement are set out above.

As contemplated in the Sale Agreement, the Consideration to be paid by the
Buyer will be financed by equity financing provided by TGC Fund IV as equity
sponsor by virtue of the ECL, subject to substantially the same conditions as
those set forth in the Sale Agreement for the Disposal.

Concurrently with the delivery of the ECL, TGC Fund IV as guarantor, has
executed a limited guarantee in favour of the Seller, pursuant to which TGC
Fund IV has agreed to guarantee the Buyer's obligation under the Sale
Agreement to pay a termination fee to the Seller of US$2 million in
circumstances where the Seller terminates the Sale Agreement, and completion
does not occur, due to the Buyer's material breach or failure to complete. TGC
Fund IV's aggregate liability under the limited guarantee is limited to a
maximum of US$2 million.

·      Marathon Capital financial advisory agreement

On 30 August 2023, the Company and its wholly-owned subsidiary, RNEW Holdco,
LLC (Holdco) entered into a financial advisory agreement on customary terms
with Marathon pursuant to which Marathon agreed to provide financial advisory
services to the Company and Holdco in connection with the Disposal.  The
Company and Holdco have provided certain standard indemnities to Marathon in
connection with the performance of its services.

·      Revolving Credit Facility

The Seller (as borrower) and KeyBank (in various capacities, including as
lender and administrative agent) entered into the RCF on 18 October 2021. The
RCF initially comprised (a) a US$50 million, two year tranche and (b) a US$15
million, three year tranche, including an accordion option which provided
access to an additional US$20 million of capital. The RCF also contained
optional prepayment and mandatory prepayment obligations.

On 26 June 2023, the Seller and KeyBank completed an amendment and extension
to the RCF, pursuant to which the RCF was extended by 12 months and the rates
of interest payable on the facility were amended. A further amendment and
extension to the RCF was completed on 18 October 2024, pursuant to which the
RCF is now set to mature on 18 October 2025 for both tranches.

As from 18 October 2024, the total commitment of the original US$50 million
tranche has been reduced to US$32.5 million, with re-borrowing limited to an
aggregate amount of up to US$7.5 million after giving effect to the Mandatory
Prepayment (as defined below). The total commitment of the US$15 million
tranche has been reduced to US$10.5 million, with re-borrowing limited to an
aggregate amount of up to US$2.5 million after giving effect to the Mandatory
Prepayment.

Upon completion of the Disposal, the total commitment of the US$32.5 million
tranche will be reduced further to US$7.5 million and the US$10.5 million
tranche will be reduced further to US$2.5 million, reflecting the Seller's
lower borrowing base after the DG Portfolio is sold. Concurrently with the
completion of the Disposal, the Seller is required to make a mandatory
prepayment of the greater of (a) an amount to pay down the US$32.5 million
tranche to no greater than US$7.5 million and the US$10.5 million tranche to
no greater than US$2.5 million or (b) the net cash proceeds received by the
Seller in respect of the Disposal (the Mandatory Prepayment).

Under the terms of this second amendment, the Seller is restricted from making
any distribution, unless it is statutorily required in order for the Company
to retain UK investment trust status, provided that the Seller is permitted to
make a one-time distribution in an amount of up to US$10 million from the
proceeds of the Disposal so long as all outstanding obligations owed to
KeyBank are paid off.

As at 9 December 2024, US$32.5 million was drawn on the RCF and the Group had
cash balances of US$12.7 million. However, as noted above, the RCF is intended
to be repaid in full out of the net proceeds of the Disposal, together with
certain of the proceeds of the recently completed ECHO Financing referred to
below.

Material Contracts of the Target Group

·      Save as disclosed below, no contracts have been entered into
(other than contracts entered into in the ordinary course of business) by the
intermediate holding entity through which the Seller holds the DG Portfolio
assets (the Target Group), either (a) within the two years immediately
preceding the date of this document which are or may be material to the Target
Group; or (b) at any time, which contain any provision under which the Target
Group has any obligation or entitlement which is or may be material to the
Target Group as at the date of this announcement.

·      Tax equity and ECHO Financing

On 7 October 2022, the Company closed a tax equity commitment of US$17.7
million for the "ECHO" solar assets, a 36.0 MWdc commercial solar portfolio in
Minnesota, Virginia, and Delaware, which is held by the Company through a tax
equity partnership. Tax equity funding for the ECHO projects is contingent
upon the completion of tax equity milestones at each project within the
portfolio.

On 31 October 2023, TC Renewable Holdco V, LLC, and TC Renewable Holdco, LLC,
both wholly-owned subsidiaries of the Company comprised within the DG
Portfolio, entered into a back-leverage term debt facility with Fifth Third
Bank with an aggregate commitment of approximately US$15.6 million. An initial
tranche of approximately U$4.3 million was drawn on 31 October 2023.

As announced on 28 November 2024, final closing of the tax equity for the ECHO
solar assets, along with the remaining drawdown of the US$15.6 million
back-leverage facility, took place on 26 November and 27 November 2024,
respectively.

The Company anticipates reaching final completion (including closing of tax
equity) in respect of the Oliver Road solar project prior to completion of the
Disposal.

Litigation

·      There are no governmental, legal or arbitration proceedings
(including any such proceedings which are pending or threatened of which the
Company is aware) nor have there been any during the twelve months preceding
the date of this announcement which may have, or have had in the recent past,
significant effects on the Continuing Group's financial position or
profitability.

·      There are no governmental, legal or arbitration proceedings
(including any such proceedings which are pending or threatened of which the
Company is aware) nor have there been any during the twelve months preceding
the date of this announcement which may have, or have had in the recent past,
significant effects on the Target Group's financial position or profitability.

 

 

IMPORTANT NOTICES

Financial adviser

Marathon Capital Markets, LLC (Marathon) which is registered with the U.S.
Securities and Exchange Commission and regulated by the Financial Industry
Regulatory Authority in the United States, is acting as financial adviser to
the Company and for no one else in connection with the matters set out in this
announcement and is not, and will not be, responsible to anyone other than the
Company for providing the protections afforded to clients nor for providing
advice in connection with the matters set out in this announcement.

Neither Marathon nor any persons associated or affiliated with it accepts any
responsibility whatsoever or makes any representation or warranty, express or
implied, concerning the contents of this announcement, including its accuracy,
completeness or verification, or concerning any other statement, made or
purported to be made by it or them, or on its or their behalf, the Company or
the directors in connection with the Company or the Disposal, and nothing in
this announcement is, or shall be relied upon as, a promise or representation
in this respect, whether as to the past or future.  Marathon and its
respective associates and affiliates accordingly disclaim, to the fullest
extent permitted by law, all and any responsibility and liability whether
arising in tort, contract or otherwise which it or they might otherwise have
in respect of this announcement or any such statement.

General

This announcement is not a prospectus and is not intended to, and does not,
constitute or form part of any offer, invitation or the solicitation of an
offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose
of, or issue any securities whether pursuant to this announcement or
otherwise.

The release, publication or distribution of this announcement in jurisdictions
outside the United Kingdom may be restricted by laws of the relevant
jurisdictions and therefore persons into whose possession this announcement
comes should inform themselves about, and observe, such restrictions. Any
failure to comply with the restrictions may constitute a violation of the
securities law or any such jurisdiction.

Information regarding forward-looking statements

This announcement contains (or may contain) statements that are, or may be
deemed to be, ''forward-looking statements''. Forward-looking statements are
based on current expectations and projections about future events and other
matters that are not historical fact. These forward-looking statements are
sometimes identified by the use of a date in the future or forward-looking
terminology, including, but not limited to, the words ''aim'', ''anticipate'',
''believe'', ''intend'', ''plan'', ''estimate'', ''expect'', ''may'',
''target'', ''project'', ''will'', ''could'' or ''should'' or, in each case,
their negative or other variations or words of similar meaning. These
forward-looking statements include matters that are not historical facts and
include statements that reflect the directors' intentions, beliefs and current
expectations. By their nature, forward-looking statements involve risks and
uncertainties because they relate to events and depend on circumstances that
may or may not occur in the future or are beyond the Company's control. They
are not guarantees of future value or performance and are based on one or more
assumptions.

Statements contained in this announcement regarding past trends or activities
should not be taken as a representation that such trends or activities will
continue in the future.

Forward-looking statements contained in this announcement apply only as at the
date of this announcement. Subject to any obligations under the UK Listing
Rules and FCA's Disclosure Guidance and Transparency Rules, the UK version of
the Market Abuse Regulation or any other applicable law or regulation, the
Company undertakes no obligation publicly to update or review any
forward-looking statement, whether as a result of new information, future
developments or otherwise.

No profit forecast or estimate

No statement in this announcement is intended as a profit forecast or profit
estimate for any period and no statement in this announcement should be
interpreted to mean that earnings, earnings per ordinary share or income, cash
flow from operations or free cash flow for the Company or its group, as
appropriate, for the current or future financial years would necessarily match
or exceed the historical published earnings, earnings per ordinary share or
income, cash flow from operations or free cash flow for the Company or its
group, as appropriate.

Presentation of financial information

References to "US$" are to the lawful currency of the United States.

Certain financial data has been rounded, and, as a result of this rounding,
the totals of data presented in this announcement may vary slightly from the
actual arithmetic totals of such data.

LEI Number

The Company's LEI Number is 2138004JUQUL9VKQWD21

 1  (#_ftnref1) For these purposes, pro forma gross asset equity value does
not include project-level debt secured on assets within the DG Portfolio.

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