US Solar Fund PLC US Solar Fund - USFP - QUARTERLY TRADING AND NAV UPDATE

Us Solar Fund

09/03/2023 07:00

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RNS Number : 3722S  US Solar Fund PLC  09 March 2023

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9 March 2023

US SOLAR FUND PLC (USF, the "Company")

QUARTERLY TRADING AND NAV UPDATE

US Solar Fund plc (LON: USF (USD)/USFP (GBP)) announces that its unaudited NAV
at 31 December 2022 was $320.0 million or $0.963 per ordinary share, a
decrease from the 30 September 2022 NAV of $322.2 million or $0.970 per
ordinary share.

Highlights for the quarter to 31 December 2022:

•       USF's unaudited NAV at 31 December 2022 was $320.0 million or
$0.963 per Ordinary Share, marginally lower than the 30 June 2022 NAV of
$321.2 million or $0.967 per Ordinary Share. While the portfolio experienced
an overall fair value uplift, this was offset by dividends paid, operating
costs and US tax losses (deferred tax liabilities arising from an increase in
asset valuations) resulting in the reduction in NAV.

•       The portfolio fair value uplift was driven by a modest uplift
in electricity price forecasts and improved operating cost assumptions which
more than offset the impact of increased discount rates driven by sustained
higher interest rates.

•       During the period, the portfolio produced 168GWh (including
reimbursed curtailment), bringing the total production for 2022 to 904GWh.
Generation for 2022 remained within the expected range of annual variance. We
continue to see the benefits of a high-quality, diversified portfolio as
assets largely continued performing well with their long-term PPAs. The
distribution of assets across different locations gave the portfolio the
benefit of varying weather conditions, mitigating volatility from any
particular event or local weather trend throughout the year. Dividends paid
during 2022 remained cash covered.

•       All assets in the portfolio have power purchase agreements
(PPAs) with contracted prices for 100% of electricity generated. The portfolio
weighted average PPA term is 13.8 years as of 31 December 2022, and all PPA
counterparties are investment-grade (S&P rated A to BBB).

•       The Company paid its Q3 2022 dividend of 1.52 cents per
Ordinary Share on 6 January 2023. The dividend is consistent with the
Company's target full year dividend of 5.58 cents per Ordinary Share.

•       Dividend cover for the twelve months to 31 December 2022 was
1.20x.

•       In October 2022, USF's Board announced that it was undertaking
a strategic review of the options available to the Company to maximise value
for shareholders (Strategic Review) and that it expected to conclude the
Strategic Review by the end of Q1 2023. The Strategic Review is considering
all options available to the Company including a sale of the entire Company, a
sale of the Company's portfolio assets, or changing the Company's investment
management arrangements.

•       Since the Strategic Review commenced, the Board and its
advisors have engaged with a significant number of parties and, following
receipt of indicative proposals, have shortlisted several parties who have
proceeded to the next phase of the Strategic Review process. In order to
provide the shortlisted parties with the requisite time to finalise their due
diligence and submit binding proposals, the Board now expects to update
shareholders on the outcome of the Strategic Review within the next six to
eight weeks.

 

Highlights post period end:

•       In January 2023, the Company announced that MN8, a renewable
energy business formerly known as Goldman Sachs Renewable Power LLC, had
exercised its purchase option over USF's 50% interest in the 200MW(DC) Mount
Signal 2 asset, with financial close expected to occur in Q2 2023.  The sale
will generate total proceeds (including the option fee) of $53.2 million and
implies a gross return of 11% per annum since USF announced the agreement to
acquire up to 50% of MS2 from NEW in December 2020. The Company will update
shareholders regarding use of proceeds at the conclusion of the Strategic
Review (or the financial close of the MS2 sale if earlier).

 

 

The NAV update and the Company's factsheet for Q4 2022 are available on the
Company's website at: www.ussolarfund.co.uk/investor-centre
(http://www.ussolarfund.co.uk/investor-centre) .

A separate Solar Market Update can be found on the website at:
www.ussolarfund.co.uk/media-and-insights
(http://www.ussolarfund.co.uk/media-and-insights) .

 

For further information, please contact:

 US Solar Fund                    +1 718 230 4329

 Whitney Voute

 Cenkos Securities plc            +44 20 7397 8900

 James King

 Tunga Chigovanyika

 Will Talkington

 Jefferies International Limited  +44 20 7029 8000

 Stuart Klein

 Gaudi le Roux

 KL Communications                +44 20 3995 6673
 Charles Gorman                   USF@kl-communications.com

 Charlotte Francis

Millie Steyn

 

About US Solar Fund plc

US Solar Fund plc, established in 2019, is listed on the premium segment of
the London Stock Exchange. The Company's investment objective is to provide
investors with attractive and sustainable dividends with an element of capital
growth by owning and operating solar power assets in North America and other
OECD countries in the America.

 

The solar power assets that the Company acquires or constructs are expected to
have an asset life of at least 30 years and generate stable and uncorrelated
cashflows by selling electricity to creditworthy offtakers under long-term
power purchase agreements (or PPAs). The Company's portfolio consists of 42
operational solar projects with a total capacity of 543 MW(DC), all located in
the United States.

 

Further information on the Company can be found on its website
at http://www.ussolarfund.co.uk (http://www.ussolarfund.co.uk/) .

 

About the Investment Manager

USF is managed by New Energy Solar Manager (NESM). NESM also manages New
Energy Solar, an Australian Securities Exchange (ASX)-listed fund. Combined,
US Solar Fund and New Energy Solar have committed approximately US$1.3 billion
to 57 projects totalling 1.2GW(DC).

 

NESM is owned by E&P Funds, the funds management division of E&P
Financial Group, an ASX listed company (ASX: EP1) with over A$20 billion of
funds under advice.

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