Building Energy, a global, vertically integrated, multi-technology (wind, solar, hydro and biomass) independent power producer, will issue a 100 million mandatory convertible bond with a 3 years maturity which will be converted into equity just before the company will be listed on a Stock Exchange, which might be LSE.
Actually the Hong Kong-listed private equity firm ZZ Capital International Limited yesterday announced that it has signed an agreement to invest in Building Energy 1 Holdings plc alongside it parent company Zhongzhi Capital (see here the press release).
Proceeds from the new bond will be used to reimburse a 30 million euros non convertible bond listed on the Italian ExtraMot Pro market which was subscribed in 2015 by private equity firm The Three Hills which at the same time also bought a 7% stake in Building Energy’s equity. The Three Hilss will then subscribe 30 millioneuros of the mandatory bond while Chinese investors will subscribe almost all the remaining 70 million euros with Building Energy’s management subscribing a minority.
All the mandatory bond subscriber will receive an equity kicker for a total of 10% of Building Energy capital with shares that will be sold by actual shareholders. So at the end of the deal, The Three Hills will raise its stake to 10%, ZZ Capital will have a 7%, while Italy’s private equity firm Synergo sgr will lower its stake from 32.2% to 27% and the management will have the remaining stake.
As part of the transaction, Building Energy will be redomiciled from Italy to the UK to benefit from the depth of London’s capital markets, the breadth of expertise in renewable energy in the UK and the supportive environment for high growth companies.
In the deal Building Energy èwas supporadvisor Rted by fitednancial advisor Rothschild. The new bond has been issued by Building Energy 1 Holdings plc and will be listed on the London Tise (The International Stock Exchange) market.
Fabrizio Zago, ceo of Building Energy who founded the company in 2010 together with a group of manager coming from bug utility companies, told MF Milano Finanza that ’the deal has been based on a pre-money valuation for Building Energy of about 150 million euros and that taking in consideration the ongoing projects the compny enterprise value will be in a range of 300-400 million euros in 3 years so that mandatory convertible bondholders might control a 25% of the equity after conversion”.
Zafo added that “with the backing and expertise of ZZCI, Building Energy now has the ability to take advantage of growth in the Asian renewable energy market. We believe that the sector will continue to grow and that with the support of our partners at ZZCI we will expand significantly into China and other Asian markets.”
With a total pipeline of 2.600 MW in 24 countries and more than 700 MW plants in construction, Building Energy is one of the major players in the international panorama in the renewable energies sector. The company closed its 2016 consolidated 2016 FY with a25 million euros in adjusted revenues (from 28.2 millions in 2015), a -1.4 million euros adjusted ebitda (from -1.9 millions) and a net financial debt of 91 million euros (from 34.9 millions), due to huge invesdtments in new plants above all in Africa, Cile and the US.
In the US actually the company signed an agreement with Alliance North Sky Capital II Fund managed by Goldenset Capital Partner to financa a joined project . More in detail the fund capitalized a newco with 12 million dollars while Building Energy sold to newco 43 MW of solar and wind projects.