Scatec Solar will raise billions to finance the SN Power acquisition...

Published:Updated: October 20, 2020 5:08 PM, Published: October 20, 2020 4:37 PM

The solar company Scatec Solar announces that the company is considering carrying out a share issue aimed at selected Norwegian and international investors.

The news comes four days after Scatec Solar announced the giant acquisition of the hydropower company SN Power for almost NOK 11 billion. The company also announced that they are dropping “Solar” in their name.

The money that is now collected will, among other things, be used to refinance parts of the temporary acquisition loan that the company has secured.

The fundraising will take place after the close of trading on Thursday and the brokerages BNP Paribas, DNB Markets, JP Morgan, Nordea, Sparebank 1 Markets and Swedbank to assist in the process. The deadline to sign up expires on Wednesday morning at 08:00.

The company is offering up to 20.65 million shares at a currently unknown price tag. Based on the current closing price of NOK 245.80, a share issue will provide NOK 5.08 billion in gross income.

The actual price tag that investors will end up paying will be put into the book building process that is now underway.

13.8 million of the shares in the issue will be printed by the company, based on the authorization the board has already received from the general meeting. The remaining 6.88 million shares will only come if the general meeting approves the issue, but in the meantime they will be raised by other shareholders lending the same number of shares.

PS! CEO Raymond Carlsen has subscribed and will buy shares for NOK 20 million in the issue through the investment company Argentos, Scatec states.

Stock exchange announcement from Scatec Solar about the issue

The issue came earlier than announced

The money that will now be collected in the billion issue will thus be used to finance the acquisition of SN Power.

When Scatec announced the acquisition of SN Power on Friday last week, the company also announced that a share issue was on the way, but that it would come after only a few days was not clear.

The acquisition of 1.17 billion dollars was financed with several different elements:

• $ 116 million of own cash
• $ 200 million in seller credit from Norfund
• $ 150 million in a four-year term loan from Nordea, DNB and Swedbank
• $ 700 million in short-term “acquisition loans” from Nordea, DNB, BNP Paribas and Swedbank

This $ 700 million acquisition loan had a maturity of 12 months after the acquisition was completed in the first half of next year, and Scatec wrote that the “acquisition loan” “is expected to be refinanced through debt and equity.”

Scatec now writes that “the net income from the private placement will be used to refinance $ 300 million” of the $ 700 million acquisition loan.

The remaining amount that is left will be used as “growth capital and general corporate purposes”.

Last week, Scatec CEO Raymond Carlsen was very tight-lipped when asked when an issue would take place and how big it would be:

– I can not answer anything concrete to that. We have a favorable acquisition financing interest rate of 250 basis points above the underlying interest rate. These loans are very favorable, he said.

– Do you think you can get away without having to make an issue?

– I do not want to say it. We have to consider that, Carlsen said.