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Oxford Capital announces the completion of the second phase of their UK Solar PV refinancing programme

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In December 2017 specialist investment manager Oxford Capital completed the first of three planned phases of the refinancing of their 92MWp UK Solar PV portfolio. Today the firm has announced the completion of the second phase of the programme. This second phase saw a further £19m provided by Oxford Capital and funds managed by BlackRock, with funding provided at the holding company level.

IDCM Limited acted as Arranger on the transaction with legal advice provided to the parties by Osborne Clarke and Burges Salmon.
Oliver Hughes, Partner at Oxford Capital, said ‘We are delighted to have completed the second phase of this refinancing programme. This high quality portfolio of solar PV assets continues to perform well, and our in-house portfolio management team continue to ensure maximum value is realised for our investors. We are pleased to have worked with Blackrock on this phase of the portfolio refinancing. Thanks also to IDCM for their professional approach.’

Jean-Christophe Oberto, Executive Director at IDCM Limited said, “Following our successful cooperation last year, we are very pleased to have worked with Oxford Capital again on another innovative transaction. The renewable sector is experiencing a shift from subsidy-based revenues to merchant-based revenues and, we believe that, against this context, HoldCo financing will become more popular in Europe, in particular for greenfield projects. We are committed to assisting our clients through this transition and helping them achieve their financing goals.”

Jonathan Stevens, Head of European Infrastructure Debt at BlackRock, said: “We are delighted to have made this debt investment on behalf of our institutional clients. This financing provided an opportunity to extend our investment in the UK renewable energy sector with an experienced partner and at an attractive return.”

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Due to the potential for losses, the Financial Conduct Authority (FCA) considers this investment to be high risk.

What are the key risks?

  1. You could lose all the money you invest
    1. If the business you invest in fails, you are likely to lose 100% of the money you invested. Most start-up businesses fail.
  2. You are unlikely to be protected if something goes wrong
    1. Protection from the Financial Services Compensation Scheme (FSCS), in relation to claims against failed regulated firms, does not cover poor investment performance. Try the FSCS investment protection checker here.
    2. Protection from the Financial Ombudsman Service (FOS) does not cover poor investment performance. If you have a complaint against an FCA-regulated firm, FOS may be able to consider it. Learn more about FOS protection here.
  3. You won’t get your money back quickly
    1. Even if the business you invest in is successful, it may take several years to get your money back. You are unlikely to be able to sell your investment early.
    2. The most likely way to get your money back is if the business is bought by another business or lists its shares on an exchange such as the London Stock Exchange. These events are not common.
    3. If you are investing in a start-up business, you should not expect to get your money back through dividends. Start-up businesses rarely pay these.
  4. Don’t put all your eggs in one basket
    1. Putting all your money into a single business or type of investment for example, is risky. Spreading your money across different investments makes you less dependent on any one to do well.
    2. A good rule of thumb is not to invest more than 10% of your money in high-risk investments. https://www.fca.org.uk/investsmart/5-questions-ask-you-invest
  5. The value of your investment can be reduced
    1. The percentage of the business that you own will decrease if the business issues more shares. This could mean that the value of your investment reduces, depending on how much the business grows. Most start-up businesses issue multiple rounds of shares.
    2. These new shares could have additional rights that your shares don’t have, such as the right to receive a fixed dividend, which could further reduce your chances of getting a return on your investment.

 

If you are interested in learning more about how to protect yourself, visit the FCA’s website here.