MPC Caribbean US$22.8M rights issue extended

MPC Caribbean US$22.8M rights issue extended

Proceeds of rights issue to invest in renewables in the Caribbean Basin

Observer business writer

Wednesday, December 18, 2019

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MPC Caribbean Clean Energy has extended its US$22.8 million rights issue by one week.

It's now set to close on December 23 having been opened on November 13 and was initially slated to close on December 16. The offer will allow existing shareholders to buy two new shares for each original share held.

The company plans to issue 22.84 million new shares in the rights issue at US$1 or the equivalent of $140 in Jamaica and Trinidad. MPC is the company behind Jamaica's new Eight Rivers Paradise Park solar energy project in Westmoreland, which was commissioned into service earlier this year.

Paradise Park began producing energy in June, and is the cheapest source of energy provided to the national grid at a cost of 8.5 US cents per kilowatt hour. MPC raised $US11 million in its initial public offering on the Jamaica and Trinidad and Tobago stock exchanges in January.

Eligible shareholders in the rights issue may subscribe for new shares at a rate of two fully paid ordinary Class B shares in the company for every one fully paid ordinary Class B share in the company held as at the record date of November 8, 2019.



MPC intends to use the net proceeds to invest in an affiliated investment company, MPC Caribbean Clean Energy Fund LLC, which will use these funds for the purpose of investing in clean energy projects and facilities with a particular focus in the Caribbean Basin.

The primary sector focus will be solar projects and wind farm operations. MPC argued that the Caribbean Community member states are expected to add over 5.3 gigawatts of renewable energy capacity in the next eight years and wants to win some of these contracts going forward.

MPC Caribbean Clean Energy Fund LLC will pool the additional equity along with other separate investments to eventually capitalise the fund to US$200 million. The investment company is backed by MPC Capital, an international asset and investment manager headquartered in Germany, which already provided a US$5-million cornerstone commitment to the investment company.

“The target size for the investment company is US$200 million, targeted to be raised within 12 months of the first closing date of the investment company and deployed within the four-year investment period,” said the company.



A further 14 projects have been prioritised and form the indicative deal pipeline for the investment company. These projects require a total investment of circa US$498 million and are expected to deliver up to 320 megawatts of new renewable energy capacity.

The first seed asset was 'Paradise Park' 50 MW solar plant in Jamaica with a total investment of approximately US$64 million. 'Paradise Park' reached financial close in June 2018 and was energised on June 6, 2019.

The second seed asset is 'Tilawind', a 21 MW onshore wind farm based in Costa Rica with a total value inclusive of debt at US$50 million. 'Tilawind' has been in operation since March 2015.

MPC Caribbean Clean Energy Fund LLC and regional group, Ansa McAL Limited, have acquired the asset through a 50/50 joint venture.

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