A new closed-ended investment company designed to invest in a diversified portfolio of onsite renewable energy assets dubbed Atrato Onsite Energy is to launch an initial public offering (IPO).
It is targeting proceeds of £150 million through the issuance of shares, by way of a placing, offer for subscription and intermediaries offer. The company is intending to apply for those shares to be admitted to the Official List of the Financial Conduct Authority as well as to the premium segment of the London Stock Exchange’s main market.
Atrato Onsite Energy – which will trade under the ticker “ROOF” – will primarily invest in behind-the-meter solar photovoltaic generation systems and associated infrastructure, which will be predominantly located on commercial building rooftops.
These will be commercialised through long-term, indexed power purchase agreements with the occupiers of the industrial and commercial properties.
The company will target capital growth through origination premiums and the application of conservative leverage to reduce project-level cost of capital, targeting an average leverage of <40% of gross asset value.
Rooftop solar PV offers a number of “unique and attractive features” said Gurpreet Gujral, managing director of Atrato, including allowing corporates to directly reduce their carbon footprint and their energy bills, as well as providing investors with a stable income stream with “limited exposure to the wholesale energy market.”
“We are excited to launch the first listed investment company with a dedicated onsite energy generation strategy,” he added. “We look forward to deploying the net proceeds of the IPO into an identified pipeline of acquisition opportunities, totalling over £300 million, within 12 months from IPO. In the first financial year, the company aims to deliver an annualised dividend of 5 pence per share, part of a target total return of 8-10 per cent.”
Atrato has an experienced board with three independent non-executive directors, chaired by founder of Good Energy Juliet Davenport OBE. She is joined by Marlene Wood, as chair of Audit Committee and Faye Goss, as a non-executive director.
Alvarium Securities Limited is set to act as global co-ordinator, sole bookrunner, and intermediaries offer adviser to Atrato for its initial IPO.
“The UK’s binding net zero emissions target in 2050 and the resulting future demand for green energy means that additional generation from low carbon sources such as rooftop solar is growing,” said Davenport, who stepped down as CEO of Good Energy in February.
“The Atrato team have a proven track record in renewable energy investments and building infrastructure, which is why I’m very excited to be part of this compelling project as chair. The company is expected to receive the London Stock Exchange’s Green Economy Mark, providing a confidence that the fund will have a material contribution to the global green economy.”