REG plans to issue shares to finance wind projects

Renewable Energy Generation Limited (REG) is considering an issue zero dividend preference (ZDP) shares to augment its existing cash resources alongside non-recourse project finance.

The firm is proposing the following key indicative terms in relation to the ZDP shares:

• ZDP shares to be issued at 100 pence per ZDP share to raise gross proceeds not exceeding £31 million (US$48.7 million);
• Gross redemption yield of approximately 4.0 per cent;
• ZDP share life of approximately six years (to 30 June 2021);
• The company will make an application for the ZDP shares to be admitted to a standard listing on the official list and to trading on the London Stock Exchange.

REG will use the net proceeds of the issue to support the procurement and construction phases of projects within its wind portfolio. According to the company's Board, that obtaining additional finance through the issue of ZDP shares will allow the company to accelerate the delivery of projects under the Renewables Obligation and Feed-in Tariff regimes and hence maximise value for shareholders.

REG is an AIM quoted renewable energy group, its main business is the development, construction and operation of wind farms and generating power from refined used cooking oil.

• REG Windpower, based in UK, currently operates 11 wind projects in Cambridgeshire, Cornwall, County Durham, Yorkshire, Lancashire, Cumbria and Gwynedd, with a total capacity of 34.7 MW as well as 5 projects on behalf of BlackRock totalling 46 MW. REG has around 200MW of projects in the planning system awaiting consent.
• REG Bio-Power UK Ltd operates 26 MW of electricity generation plant powered by fuel recovered from used cooking oil.