REG - GCP Infra Inv Ltd - Wind Disposal and Capital Allocation Policy Update

GCP Infrastructure InvestmentsAnnouncement

26/04/2024 07:00

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RNS Number : 1196M  GCP Infrastructure Investments Ltd  26 April 2024

GCP Infrastructure Investments Limited

("GCP Infra" or the "Company")

LEI 213800W64MNATSIV5Z47

Onshore Wind Disposal and Capital Allocation Policy Update

26 April 2024

Onshore Wind Disposal

GCP Infra is pleased to announce it has disposed of its interest in loan notes
secured against Blackcraig Wind Farm (the "Project"). The disposal occurred at
a 6.4% premium to the valuation of the Project as at 31 March 2024.

The Project is a 52.9MW onshore wind farm located in Dumfries and Galloway,
Scotland. The Project benefits from Renewable Obligation Certificate (ROC)
subsidy support and has been operational since May 2018. The Company
originally acquired the senior secured loan notes in 2017 from the UK Green
Investment Bank. As an alternative to receiving repayment in full on the
senior loan notes, the Company rolled over its senior secured loan notes into
an equity-like interest in the Project in July 2018.

The disposal has generated net cash proceeds of c. £31 million. The net cash
proceeds will be used to prepay drawings under the Company's revolving credit
facility. Following such prepayment expected in the coming weeks, the
Company's net debt position will be c.£45 million. Further, the disposal has
reduced the Company's exposure to equity-like interests in the onshore wind
sector.

Capital Allocation Policy Update

The Board of Directors of the Company adopted a capital allocation policy as
part of its 2023 Annual Report and Accounts, reconfirming its intentions to
prioritise a material reduction in leverage, as well as reducing equity-like
exposures and exposures in certain sectors, as well as facilitating the return
of capital to shareholders. The Board set a conditional target of releasing
£150 million (c. 15% of the portfolio) from disposals or refinancings, to
materially reduce leverage and return at least £50 million to shareholders
before the end of the calendar year 2024.

This disposal represents a positive first step in facilitating the Company's
execution on its capital allocation policy, materially reducing leverage while
decreasing equity exposure across the portfolio. The Board and Gravis Capital
Management Limited (the "Investment Adviser") continue to focus on additional
opportunities for refinancings or disposals within the portfolio, in order to
achieve the targets, set out in the capital allocation policy.

 

Andrew Didham, Chair of GCP Infra commented:

"This disposal reinforces the Company's commitment to its capital allocation
policy, prioritising the reduction of leverage in the first instance, through
a significant repayment of revolving credit facilities. It will further
benefit the risk adjusted return of the portfolio, reducing equity-like
exposure and exposure to electricity price movements."

 

For further information, please contact:

 

 Gravis Capital Management Limited             +44 (0)20 3405 8500

 Philip Kent

 Max Gilbert

 RBC Capital Markets                           +44 (0)20 7653 4000

 Matthew Coakes

 Elizabeth Evans

 Stifel Nicolaus Europe Limited                +44 (0)20 7710 7600

 Edward Gibson-Watt

 Jonathan Wilkes-Green

 Buchanan/Quill                                +44 (0)20 7466 5000

 Helen Tarbet

 Sarah Gibbons-Cook

 Henry Wilson

 

Notes to the Editor

 

About GCP Infra

GCP Infra is a closed-ended investment company and FTSE-250 constituent, its
shares are traded on the main market of the London Stock Exchange. The
Company's objective is to provide shareholders with regular, sustained,
long-term distributions and to preserve capital over the long term by
generating exposure to UK infrastructure debt and related and/or similar
assets.

 

The Company primarily targets investments in infrastructure projects with long
term, public sector-backed, availability-based revenues. Where possible,
investments are structured to benefit from partial inflation protection. GCP
Infra is advised by Gravis Capital Management Limited.

 

GCP Infra has been awarded with the London Stock Exchange's Green Economy
Mark in recognition of its contribution to positive environmental outcomes.

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