Fri | Sep 20, 2019

MPC Clean Energy considers rights issue

Published:Friday | August 30, 2019 | 12:20 AM
Managing Director of MPC Capital David Delaire speaks at the listing ceremony for MPC Caribbean Clean Energy at the Jamaica Stock Exchange on January 14, 2019.

MPC Clean Energy Limited plans to raise fresh equity capital in a rights issue for its Class B shares listed on the Jamaica and Trinidad stock exchanges, which would bolster its capital base for 14 additional deals in its pipeline.

The company will go to its board for approval of the issue on September 4.

MPC Clean Energy would become the fourth main market company aiming to raise funds via the issue of shares this year, the others being Barita Investments, Kingston Properties and JMMB Group. JMMB, however, is planning an offer of new shares to the public, pending shareholder approval.

MPC Clean Energy uses its capital to plough into a Cayman Islands-based fund which takes equity positions in mostly solar and wind energy projects across the region.

The renewable energy investor raised US$11 million at US$1 per share – or just over a fifth of the US$50 million in capital it optimally wanted – from its initial public offering of shares last December. Its target for the rights issue is unknown. The company has not responded to requests for comment.

A rights issue is the sale of additional shares to existing shareholders at a preset price. In some instances, the shares not taken up by shareholders may be sold to the public under what is called a renounceable rights issue.

Won’t need shareholder approval

MPC Clean Energy won’t need shareholder approval to increase the size of its authorised shares to facilitate the offer. The company already outlined in its IPO prospectus that its authorised shares are unlimited.

The largest shareholders in MPC Clean Energy are Teachers Credit Union Co-operative Society Limited, 26.3 per cent; Sagicor Pooled Equity Fund; 23.6 per cent, Caribbean Clean Energy Feeder Limited, 18.4 per cent; Development Bank of Jamaica, 8.8 per cent; Sagicor Balanced Fund, at 769,000 units or 6.7 per cent; JNBS Pension Trustees Nominee, 5.5 per cent; Sagicor Equity Fund, 3.4 per cent; Financial & Advisory Services, 0.9 per cent; JN General Insurance Company, 0.9 per cent; and JN Individual Retirement Scheme, 0.7 per cent.

The company is controlled by MPC Capital, which is based in Germany and holds investments in the Cayman fund that hold the assets of the energy projects.

At the end of July, MPC Capital acquired a 6.5-megawatt solar plant at US$7.5 million in El Salvador, which it said was secured for the MPC Caribbean Clean Energy Fund. That fund is seeded from at least two sources – MPC Capital and investors who subscribed to the MPC Clean Energy IPO.

MPC Clean Energy is also invested in Paradise Park, a nearly complete 50MW solar plant in Jamaica; and Tilawind a 21MW onshore wind farm in Costa Rica. It previously disclosed 14 additional projects in its IPO prospectus, saying they require a total investment of US$499 million and are expected to deliver up to 314 MW of new renewable energy capacity.

MPC Clean Energy, which listed on the stock market January 14 of this year, reported a book value of US$11.09 million for the period ending June. The stock, which is cross-listed on the Jamaica Stock Exchange, last traded at $127 on the JMD side of the market, down from its listing price of $130, but remains unchanged at US$1 on the USD index.

steven.jackson@gleanerjm.com