Foresight Sustain. - Two acquisitions of afforestation opportunities

Foresight Sustainable Forestry

06/12/2021 06:59

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RNS Number : 5753U  Foresight Sustain. Forestry Co PLC  06 December 2021

 

 6 December 2021

 

Foresight Sustainable Forestry Company Plc

 

Completion of two acquisitions of substantial new afforestation opportunities
in Scotland

 

 

Foresight Sustainable Forestry Company Plc ("FSF"), an investment company that
invests in UK forestry and afforestation assets, today announces that
Blackmead Forestry II Limited ("BFL II"), which FSF has an option to acquire,
has fully completed the purchase of two substantial and ideally located
afforestation opportunities in Dumfries and Galloway, Scotland.

 

Rorie Hill, one of the key afforestation opportunities which BFL II previously
had under offer, has a freehold area of 303 hectares and will be developed as
a mixed forestry and afforestation site. A cash consideration (inclusive of
tax and other transaction costs) of £5.59 million was deployed to acquire the
asset.

 

Auchenbrack, which BFL II also previously had under offer, has a freehold area
of 470 hectares and will be developed as an afforestation site. A cash
consideration (inclusive of tax and other transaction costs) of £5.30 million
was deployed to acquire the asset.

 

Additionally, Blackmead Forestry Limited ("BFL") has completed the sale of
various buildings and four hectares of non-afforestation land (all considered
to be Non-Core Assets) at the 150 hectare Banc Farm afforestation site in
Carmarthenshire, Wales, receiving a cash consideration of £0.53m.

 

As previously announced, FSF has entered into an Option Agreement with
Blackmead Infrastructure Limited to acquire the issued shares of BFL and BFL
II, the holding companies of the Target Seed Forestry Assets.

 

The Target Seed Forestry Assets comprise 34 assets, diversified in age,
project type and geography which were valued at approximately £138.0 million
as at 1 September 2021. The Target Seed Forestry Assets extend across c.11,000
hectares (equivalent to c.27,000 acres), with 85 per cent. by area located in
Scotland, 10 per cent. in Wales and 5 per cent. in England. 59 per cent. of
the Target Seed Forestry Assets are mature Standing Forests; and 38 per cent.
of the Target Seed Forestry Assets are Afforestation projects, that will be
planted; the remaining 3 per cent. of the portfolio is made up of mixed
assets.

 

Given that the Target Seed Forestry Assets are valued at more than the net
asset value of FSF, an asset prioritisation and acquisition sequencing
exercise is underway. There will be a further announcement regarding the
result of this exercise in due course.

 

As part of a wide and ongoing deal sourcing campaign, FSF continues to explore
various development avenues and has identified a number of specific
opportunities in line with the Company's investment policy which are either,
(i) under active discussion with the relevant counterparties, or (ii) likely
to be available for sale within 12 months. This pipeline represents a
potential investment volume for the Company of more than £115 million at the
date of this announcement.

 

Richard Kelly, Co-Head of Foresight Sustainable Forestry Company, said:

"Foresight Sustainable Forestry Company offers a unique investment opportunity
into UK forestry and afforestation assets. The acquisition of these sites
cements two more substantial afforestation opportunities within our Target
Seed Portfolio that will both drive attractive risk-adjusted returns for
investors, whilst also directly contributing to the fight against the twin
threats of climate change and biodiversity loss. At Banc Farm, we now have a
more concentrated, higher returning, pure afforestation asset. Investment in
UK forestry and afforestation assets offers access to an attractive capital
appreciation opportunity, as well as the benefits we see in significantly
increasing demand for carbon credits. We continue to explore development
avenues and look forward to delivering our business plan."

About the Company

 

Foresight Sustainable Forestry Company Plc ("the Company") is an externally
managed investment company investing in a diversified portfolio of UK forestry
and afforestation assets. Targeting a net total return of more than CPI +5%,
the Company provides investors with the opportunity for real returns and
capital appreciation driven by the prevailing global imbalance between supply
and demand for timber; the inflation-protection qualities of UK land
freeholds; and biological tree growth of 3% to 4% not correlated to financial
markets. It also offers outstanding sustainability and ESG attributes and
access to carbon units related to carbon sequestration from new afforestation
planting. The Company targets value creation as the afforestation projects
successfully achieve development milestones in the process of converting open
ground into established commercial forest and woodland areas. The Company is
seeking to make a direct contribution in the fight against climate change
through forestry and afforestation carbon sequestration initiatives and to
preserve and proactively enhance natural capital and biodiversity across its
portfolio. It is managed by Foresight Group LLP.
https://fsfc.foresightgroup.eu/ (https://fsfc.foresightgroup.eu/)

 

For further information, please contact:

 Foresight Sustainable Forestry Company Plc            +44 20 3667 8100

 Robert Guest

 Richard Kelly

 fsfc@foresightgroup.eu

 Jefferies International Limited                       +44 20 7029 8000

 Neil Winward

 Will Soutar

 Citigate Dewe Rogerson

 Toby Moore (toby.moore@citigatedewerogerson.com)      +44 7768 981763

 Nick Reading (nick.reading@citigatedewerogerson.com   +44 7702 718740
 (mailto:nick.reading@citigatedewerogerson.com) )

 

 

 

This announcement does not constitute, and may not be construed as, an offer
to sell or an invitation to purchase investments of any description, or the
provision of investment advice by any party. No information set out in this
announcement is intended to form the basis of any contract of sale, investment
decision or any decision to purchase securities in the Company.

 

This announcement may include statements that are, or may be deemed to be,
"forward-looking statements". These forward-looking statements can be
identified by the use of forward-looking terminology, including the terms
"believes", "estimates", "anticipates", "expects", "intends", "may", "will",
"targeting" or "should" or, in each case, their negative or other variations
or comparable terminology. All statements other than statements of historical
facts included in this announcement, including, without limitation, those
regarding the Company's financial position, strategy, plans, proposed
acquisitions and objectives, are forward-looking statements.

 

 

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