The Enterprise Solar EIS Fund. Promoted by Enterprise Investment Partners LLP

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Barbara Simpson
6 years ago
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1 The Enterprise Solar EIS Fund Promoted by Enterprise Investment Partners LLP

2 Warning The value of this investment may go down as well as up and an investor may not get back the amount he or she invests. Investments in early stage/small to medium sized enterprises/enterprise Investment Schemes are high risk and you should not invest unless you can afford total loss or if you are likely to require the capital in the near term, since such investments can be difficult to realise. Please note that past performance and forecasts are not a reliable indicator of future results. This key points summary has been issued by Enterprise Investment Partners LLP, an appointed representative of Resolution Compliance Limited (FRN: ), which is authorised and regulated by the Financial Conduct Authority. This summary is directed at authorised financial advisers and investment professionals only, as defined in paragraph 19 of the Financial Services and Markets Act (Financial Promotion) Order 2005, and should not be distributed to anyone else. It is not an offer to invest in the Enterprise Solar EIS Fund ( the Fund ) and subscribe to shares in Serpentine Park Limited and Avenue Park Limited ( the Companies ). Investment in the Fund and Companies can only be made on the basis of the full Information Memorandum and the risk factors contained therein. Investors should be aware that tax reliefs can change. Their applicability and value will depend upon the individual circumstances of a given Investor, and Investors should seek their own independent professional advice on their particular tax situation and the application of such tax reliefs prior to making any investment. There is no guarantee that EIS status or other tax efficient status can be maintained throughout the life of the investment. Both the Companies and Investors need to comply with the requirements of the EIS legislation in order to maintain EIS and other tax reliefs and non-compliance may result in the loss or partial claw-back of these tax reliefs and potential interest penalties. Future projections are based on Enterprise and the Directors internal estimates, which are subject to change at any time. 2

3 Headlines Opportunity to invest in a pair of Companies, Serpentine Park and Avenue Park, generating electricity from Solar PV. Window of opportunity to combine the benefits of ROCs with EIS Relief. Several potential sites already identified by the Asset Manager including ground- and roof-mounted PV. EIS advance assurance held for both Companies, Serpentine Park has acquired its first asset and commenced trading in November. Mid case return of 1.25 for each 1 invested (70p after EIS relief), equivalent to a tax free IRR of 16%. 3

4 The Fund The Fund comprises two offers for subscription for shares by Serpentine Park Ltd and Avenue Park Ltd. Serpentine Park is already trading and owns a ground-mounted site in Devon named 6AD Deepy Ground which benefits from a 15-year PPA with Total Gas & Power Ltd. EIS advance assurance is held for both Companies with Serpentine Park likely to be able to issue EIS 3 certificates in March 2014 and Avenue Park in September

5 Investment Strategy The Companies will seek to acquire a portfolio of solar PV assets in order to take advantage of index-linked revenue streams from Power Purchase Agreements (PPAs) and receipts from the presentation of Renewable Obligation Certificates (ROCs). The Asset Manager has already identified a number of solar PV sites for the Companies to acquire. Debt finance may be used in order for the Companies to acquire larger assets and potentially enhance shareholder returns. Debt will not exceed 50% of capital expenditure or value of the solar PV asset. 5

6 Potential Sites The Asset Manager has identified a number of Solar PV sites for the Companies to acquire. The ground and roof mounted sites considered for acquisition range between 150 and 5,000 kwp on sites with at least 20 year leases. The pipeline is summarised below: Project Location Mount kwp ROCs PPA (p/kwh) PPA Offer 1 Cornwall Ground 4, Large Utility 2 South Wales Ground 4, Large Utility 3 Gloucestershire Ground 2, Commercial Tenant 4 West Yorkshire Ground 1, Public Body 5 Somerset Ground 1, Large Utility 6 Norfolk Roof Commercial Tenant 7 Norfolk Roof Commercial Tenant 6

7 Target Returns Base Case Medium Case High Case 1.10 for each net 70p invested, being an expected IRR of 12% p.a for each net 70p invested, being an expected IRR of 16% p.a for each net 70p invested, being an expected IRR of 19% p.a. Target returns are based on a number of assumptions considered reasonable by Enterprise and the Directors Figures are net of all Company costs, fees and management incentives 7

8 Exit Route After the expiry of three years, Enterprise and the Directors will seek an Exit for Investors, which is likely to be one of the following: A trade sale of each of the Companies. A sale of the underlying assets within the Companies. Retention of the assets by the Companies but raising of bank debt to buy out the shares of those Investors wishing to Exit Potential purchasers of the Companies or their assets include pension Funds, private equity Funds, venture capital Funds or other financial institutions to whom the longterm index-linked returns are attractive. 8

9 Promoter & Asset Manager Enterprise Investment Partners LLP ( Enterprise ) is a specialist smallcap investment boutique established three years ago. Its activities include corporate finance, Fund advisory work and the design and promotion of tax-efficient investment products with a focus on the Enterprise Investment Scheme (EIS). Over the past two years, Enterprise has raised and invested 14 million of EIS money across portfolio of solar PV, wind and renewable heat projects. Enterprise will be appointed as Asset Manager for each Company and will be responsible for securing sites and for financial, legal and technical pre-investment due diligence of the sites 9

10 Technical Due Diligence Technical due diligence and appraisal of selected sites will be undertaken by PMBC Ltd. PMBC Ltd and its principal, Martin Hoyle, have a great deal of experience of solar PV installations having provided technical appraisal, project design and monitoring services. In 2013, the firm provided advisory services for more than 40 sites in the UK with a total generating capacity of more than 30MW. The company has experience of systems ranging from less than 10kWp to over 5MWp and of both roof- and ground-mounted systems. 10

11 The Directors Christian Elmes: Christian is a Chartered Member of the Chartered Institute for Securities and Investment and a qualified chartered accountant. He is a partner in Enterprise and from 2004 to 2011 was Deputy Head of Tax Efficient Solutions at Smith & Williamson. Christian is competent across a broad range of sectors, including financial services, media, leisure, property and renewable energy. Richard Peel: Richard is the Co-founder and Managing Director of Merepark and Merepark Energy, he is a qualified architect with over 25 years experience in the delivery, funding and project management of large scale commercial property projects. Merepark was established in 1992 and Merepark Energy in 2010, which provides a number of rooftop and ground-mounted Solar PV projects to the Asset Manager and Companies. 11

12 Tax Relief Income tax relief of 30%, which can be carried back. Exemption from CGT on disposal of shares. Unlimited deferral of CGT on disposals made within last three years. Exemption from IHT after 2 years. Loss relief. Provisional clearance obtained for both Companies and tax certificates should be issued in March and September 2014 for Serpentine Park and Avenue Park respectively. 12

13 Details of the Offer Minimum and Maximum subscription will be 0.5m and 10m respectively. The Minimum investment will be 10,000 with upward increments of 5,000 only. Initial charge of 6% (3% adviser charge) with ongoing 2% annual asset manager fee Management incentive: 25% of all proceeds over 1.20 returned subject to a precipice after the expiry of four years from the date of the last share issue Offer closes earlier of full subscription or 4 April 2014, unless extended. EIP facilitates the payment of adviser charges introduced to the Fund. to advisers for advised clients 13

Assistance Martin Sherwood T: 020 7487 8482 M: 07768 764542 E:

14 Assistance Martin Sherwood T: M: E: Christian Elmes T: M: E: 14

London Shipping Limited

London Shipping Limited An asset-backed Enterprise Investment Scheme Promoted by Enterprise Investment Partners LLP Enterprise Investment Partners LLP are an Appointed Representative of Resolution Compliance