Jlen Environmental: Partial AD Disposal and Capital Allocation Update
15/08/2024 07:00
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RNS Number : 5111A JLEN Environmental Assets Group Ltd 15 August 2024
15 August 2024
JLEN Environmental Assets Group Limited
("JLEN" or the "Company")
Disposal of 51% of Six Anaerobic Digestion Facilities and Capital Allocation
Update
JLEN, the listed environmental infrastructure fund, is pleased to announce
that it has signed an agreement for the sale of 51% of a portfolio of six
gas-to-grid anaerobic digestion ("AD") facilities (the "AD Portfolio") to
Future Biogas ("Partial Disposal"), for a total consideration of £68.1
million, in line with the valuation as at 30 June 2024. Completion of the
Partial Disposal is subject only to a customary condition precedent.
JLEN will continue to own 49% of the AD Portfolio, which has a combined
generating capacity of 38MW, as well as its interests in three further AD
assets which are not part of the agreement.
Future Biogas is a specialist developer and has been the operator of the
assets comprising the AD Portfolio since they were acquired by the Company
between 2017 to 2019. The Partial Disposal provides a greater alignment of
interests between JLEN and Future Biogas, creating the potential for further
asset enhancements and life extensions beyond the current Renewable Heat
Incentive ("RHI") subsidy. These initiatives are expected to deliver uplifts
to the valuation of the Company's remaining holding in the AD Portfolio over
time.
The AD Portfolio is located in the East of England and the AD assets have been
operational since 2013 - 2016. All of the projects in the AD Portfolio benefit
from a RHI and Feed-in Tariff subsidy.
Capital allocation update
JLEN has previously announced that proceeds from sales will be used to pay
down debt and consider share buybacks, subject to the Board ensuring that the
Company maintains a robust balance sheet and can meet its existing
commitments.
In that regard, the proceeds of the Partial Disposal will be used to repay
amounts outstanding under the RCF which is available to meet existing
commitments within the portfolio. In addition, the Company will allocate £20
million of the proceeds of the Partial Disposal to a share repurchase
programme.
The Board and the Investment Manager continue to believe that the discount to
net asset value ("NAV") at which JLEN's shares are currently trading
materially undervalues the Company, and so represents an attractive investment
opportunity delivering NAV accretion for shareholders.
The Board and the Investment Manager continue to progress further targeted
asset sales to recycle capital within the portfolio.
Ed Warner, Chair of JLEN, said:
"This deal is a great outcome for JLEN, enabling us to recycle capital within
the portfolio, while continuing to benefit from the future growth and income
generated by this attractive AD Portfolio. This is the Company's second
divestment, following the sale of our French wind assets in January 2022, and
provides funds for JLEN to commence buybacks in accordance with our stated
approach to capital allocation.
We are pleased to continue our partnership with Future Biogas who we have
worked with since 2017. Having them as co-owners will help to deliver further
value from the business model they have developed and put into practice on
other projects for post-subsidy operations. Anaerobic digestion projects such
as these have a valuable role to play in the decarbonisation of heat as part
of the UK's net zero goals."
For further information, please contact:
Foresight Group +44(0)20 3667 8100
Chris Tanner institutionalir@foresightgroup.eu
Edward Mountney
Wilna de Villiers
(-----)----
Winterflood Securities Limited +44(0)20 3100 0000
Neil Langford
SEC Newgate +44 (0)20 3757 6882
Elisabeth Cowell Jlen@secnewgate.co.uk
Alice Cho
Harry Handyside
Apex Fund and Corporate Services (Guernsey) Limited +44(0)20 3530 3600
Matt Lihou
Matt Falla
About JLEN
JLEN's investment policy is to invest in a diversified portfolio of
Environmental Infrastructure. Environmental Infrastructure is defined by the
Company as infrastructure assets, projects and asset-backed businesses that
utilise natural or waste resources or support more environmentally friendly
approaches to economic activity, support the transition to a low carbon
economy or which mitigate the effects of climate change. Such investments will
typically feature one or more of the following characteristics:
· long-term, predictable cash flows, which may be wholly or
partially inflation-linked cash flows;
· long-term contracts or stable and well-proven regulatory and
legal frameworks; or
· well-established technologies, and demonstrable operational
performance
JLEN's aim is to provide investors with a sustainable, progressive dividend
per share, paid quarterly and to preserve the capital value of the portfolio
over the long term on a real basis. The target dividend for the year to 31
March 2025 is 7.80 pence per share¹. The dividend is payable quarterly.
JLEN is an Article 9 fund under the EU Sustainable Finance Disclosure
Regulation and has a transparent and award winning approach to ESG.
Further details of the Company can be found on its website www.jlen.com
(http://www.jlen.com)
LEI: 213800JWJN54TFBMBI68
(1) These are targets only and not profit forecasts. There can be no
assurance that these targets will be met or that the Company will make any
distributions at all.
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