Regulatory Filings • Jun 23, 2021
Regulatory Filings
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This presentation (the "Presentation") has been produced by Alternus Energy Group Public Limited Company (the "Company" or the "Issuer" and, together with its direct and indirect subsidiaries, the "Group") solely for use in connection with the contemplated private placement (the "Private Placement") of the Company's shares by the Issuer (the "Shares"), is confidential, and may not be reproduced or redistributed in whole or in part to any other person. The manager for the Private Placement is Arctic Securities AS (the "Manager").
This Presentation is for information purposes only and it does not constitute or form part of, and should not be construed as an offer or the solicitation of an offer to subscribe for or purchase the Shares, nor does it constitute a recommendation regarding the Shares. Prospective investors are required to make their own independent investigations and appraisals of the business and financial condition of the Company and the nature of the Shares before taking any investment decision with respect to the Shares. By attending a meeting where this Presentation is presented, or by reading the Presentation slides, you agree to be bound by the following terms, conditions and limitations.
All information provided in this Presentation has been obtained from the Group or through publicly available material. Although the Manager has endeavoured to contribute towards giving a correct and complete picture of the Group, neither the Manager nor its parents or subsidiaries or any such company's directors, officers, employees, advisors or representatives (collectively the "Representatives") shall have any liability whatsoever arising directly or indirectly from the use of this Presentation. Moreover, the information contained in this Presentation has not been independently verified, only a limited legal due diligence have been conducted and the Manager assumes no responsibility for, and no warranty (expressly or implied) or representation is made as to, the accuracy, completeness or verification of the information contained in this Presentation.
This Presentation is dated 7 June 2021. Neither the delivery of this Presentation nor any further discussions of the Group or the Manager with any of the recipients shall, under any circumstances, create any implication that there has been no change in the affairs of the Group since such date. The Group does not undertake any obligations to review or confirm, or to release publicly or otherwise to investors or any other person, any revisions to the information contained in this Presentation to reflect events that occur or circumstances that arise after the date of this Presentation.
ONLY A LIMITED LEGAL DUE DILIGENCE HAS BEEN CARRIED OUT WITH RESPECT TO THE GROUP. The Issuer has engaged Advokatfirmaet Thommessen AS as its Norwegian legal counsel, whereas Advokatfirmaet Schjødt AS has acted as the Manager's Norwegian legal counsel in connection with the offering of the Shares. Only a limited and selective legal due diligence exercise has been carried out, primarily on a reliance basis. This means that the Manager and its Norwegian legal counsel has relied on previous legal due diligence reports (the "Local Reports") prepared on behalf of the Company (and not the Manager). For assets in Italy, reliance on such reports have been granted by Orrick, Herrington & Sutcliffe (Europe) LLP. For the Zonnepark PV plant in the Netherlands, reliance on such reports have been granted by Jones Day (it should be noted that no due diligence reports have been received or reviewed for Unisun Energy Holding BV and its subsidiaries). For assets in Romania, reliance on such reports has been granted by Nestor Nestor Diculescu Kingston Peterson. For assets in Poland, reliance on such reports have been granted by Soltysinski Kawecki Szlezak. For assets in Germany, the Manager has relied on confirmations on certain legal aspects from Arnecke Sibeth Dabelstein, acting as the Company's German legal counsel. Any focus for the reliance based due diligence exercise has been limited a selective reading of the Local Reports to assess (i) title and ownership to shares and plants (including land lease agreements), (ii) material regulatory licenses, and (iii) Power Purchase Agreements, Feed in Tariff schemes and other local pricing schemes for the sale of electricity ((i), (ii) and (iii) jointly referred to as the "DD Scope"). In addition, the Manager has relied on a "Declaration of Completeness" signed on behalf of the Issuer (the "DoC"), as well as a completed "Bring down due diligence call" (the "BDDC"), among others confirming to the Manager that (i) the marketing material, in all material respect, is correct and complete, (ii) that all matters relevant for evaluating the Issuer and the Transaction is properly disclosed in the marketing material, and (iii) that there are no material developments since the cut-off dates for each respective Local Report.
Based on the granted reliance on the Local Reports and legal review performed on behalf of the Manager (both only within the DD Scope), the DoC and the BDDC (jointly; the "Limited Legal Due Diligence"), except as set out below for Romania, no material, negative findings have been made with respect to the matters comprised by the DD Scope. However, the Limited Legal Due Diligence is associated with several uncertainties and risks, in particular (i) the Local Reports have only been reviewed in part and matters important for the DD Scope may be described in other parts not reviewed, (ii) the Local Reports are not prepared on behalf of the Manager and reliance to such Local Reports are given only on certain conditions which may mean that responsibility and liability towards the Manager is excluded or severely restricted, (iii) the DD Scope relates to complex legal matters in jurisdictions other than Norway and as such the Manager and its Norwegian legal counsel have no basis to question any description or interpretation of local laws, and (iv) investors may be of the opinion that legal matters not covered by the DD Scope is of material importance to their decision to invest in the Shares.
Hence, they may be risks related to the Group which are not discovered by the Limited Legal Due Diligence and which still may be of importance for the business of the Group or the investment decision for possible investors in the Shares.
With respect to legal matters in Romania, investors are notified that Romanian counsel has, inter alia, advised that "substantial aspects of Romanian law are contained in relatively controversial legislation not always complied with even by the authorities having the authority to implement it" and investors should thus note that legal uncertainties involving Romania may be bigger than for other jurisdictions in which the Group operates.
An investment in the Shares involves a high level of risk and several factors could cause the actual results or performance of the Group or the Shares to be different from what may be expressed or implied by statements contained in this Presentation. By attending a meeting where this Presentation is presented, or by reading this Presentation, you acknowledge that you will be solely responsible for and rely on your own assessment of the market and the market position of the Group and that you will conduct your own analysis and be solely responsible for forming your own view of the potential future performance of the Group, its business and the Shares and other securities. The content of this Presentation is not to be construed as legal, credit, business, investment or tax advice. Each recipient should consult with its own legal, credit, business, investment and tax advisers to receive legal, credit, business, investment and tax advice. Each potential investor in the Shares must determine the suitability of that investment in light of its own circumstances. In particular, each potential investor should:
Neither this Presentation nor any copy of it or the information contained herein is being issued, nor may this Presentation, any copy of it or the information contained herein be distributed directly or indirectly, to or into Canada, Australia, Hong Kong, Italy, New Zealand, the Republic of South Africa, Japan, the Republic of Cyprus, the United Kingdom or the United States (or to any U.S. person (as defined in Rule 902 of Regulation S under the Securities Act of 1933, as amended (the "U.S. Securities Act")), or to any other jurisdiction in which such distribution would be unlawful, except as set forth herein and pursuant to appropriate exemptions under the laws of any such jurisdiction.
Neither the Group nor the Manager or any of their Representatives have taken any actions to allow the distribution of this Presentation in any jurisdiction where any action would be required for such purposes. The distribution of this Presentation and any purchase of or application/subscription for Shares or other securities of the Group may be restricted by law in certain jurisdictions, and persons into whose possession this Presentation comes should inform themselves about, and observe, any such restriction. Any failure to comply with such restrictions may constitute a violation of the applicable securities laws of any such jurisdiction. None of the Group or the Manager or any of their respective Representatives shall have any liability (in negligence or otherwise) for any loss howsoever arising from any use of this Presentation or its contents or otherwise arising in connection with the Presentation.
Neither the Group nor the Manager have authorised any offer to the public of securities, or has undertaken or plans to undertake any action to make an offer of securities to the public requiring the publication of an offering prospectus, in any member state of the European Economic Area, and this Presentation is not a prospectus for purposes of Regulation (EU) 2017/1129.
This Presentation is directed only at (i) persons outside the United Kingdom, (ii) persons who are either (a) "investment professionals" for the purposes of Article 19(5) of the UK Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order"), (b) high net worth companies, unincorporated associations and other persons to whom it may lawfully be communicated in accordance with Article 49(2)(a) to (d) of the Order, or (c) persons to whom an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the Financial Services and Markets Act 2000) in connection with the issue or sale of any Shares may otherwise lawfully be communicated or caused to be communicated (all such persons together being referred to as "Relevant Persons"). Any investment or investment activity to which this Presentation relates will be available only to Relevant Persons and will be engaged in only with Relevant Persons.
This Presentation does not constitute or form part of an offer or solicitation to purchase or subscribe for securities in the United States. In the event that this Presentation is distributed in the United States, it shall be directed only at persons who are "qualified institutional buyers" as defined in Rule 144A promulgated under the U.S. Securities Act ("Rule 144A") ("QIBs") who are also institutions that meet the definition of "accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the U.S. Securities Act ("IAIs"). The offer and sale of the Shares have not been and will not be registered under the U.S. Securities Act, or with any securities regulatory authority of any state or other jurisdiction in the United States. Accordingly, the Shares may not be offered, sold (directly or indirectly), delivered or otherwise transferred within or into the United States or to, or for the account or benefit of, U.S. persons, absent registration or under an exemption from, or in a transaction not subject to, the registration requirements of the U.S. Securities Act. The Company does not intend to register any portion of the offering of the Shares in the United States or to conduct a public offering of the Shares in the United States. This document and its contents may not be viewed by persons within the United States or "U.S. Persons" (as defined in Regulation S under the U.S. Securities Act) unless they are QIBS. The Shares are being offered and sold only (i) outside the United States to persons other than U.S. persons ("non-U.S. purchasers", which term shall include dealers or other professional fiduciaries in the United States acting on a discretionary basis for non-U.S. beneficial owners (other than an estate or trust)) in reliance upon Regulation S under the U.S. Securities Act ("Regulation S") and (ii) in the United States to QIBs who are also IAIs. As used herein, the terms "United States" and "U.S. person" have the meanings as given to them in Rule 902 of Regulation S under the U.S. Securities Act.
By receiving this Presentation, you warrant and represent that (i) if you are located within the United States and/or a U.S. person, you are a QIB, (ii) if you are a non-U.S. person, you are a Qualified Investor (as defined in the Regulation (EU) 2017/1129 (with cross-references therein)), or a Relevant Person (as defined above).
The Manager and/or their Representatives may hold shares, options or other securities of the Group and may, as principal or agent, buy or sell such securities. The Manager may have other financial interests in transactions involving these securities or the Group.
This Presentation is subject to Norwegian law, and any dispute arising in respect of this Presentation is subject to the exclusive jurisdiction of Norwegian courts with Oslo district court (Nw: Oslo tingrett) as exclusive legal venue.
Certain information contained in this presentation, including any information on the Group's plans or future financial or operating performance and other statements that express the Group's management's expectations or estimates of future performance, constitute forward-looking statements (when used in this document, the words "anticipate", "believe", "estimate" and "expect" and similar expressions, as they relate to the Group or its management, are intended to identify forward-looking statements). Such statements are based on a number of estimates and assumptions that, while considered reasonable by management at the time, are subject to significant business, economic and competitive uncertainties. The Group cautions that such statements involve known and unknown risks, uncertainties and other factors that may cause the actual financial results, performance or achievements of the Group to be materially different from the Group's estimated future results, performance or achievements expressed or implied by those forward-looking statements.
Claims or legal action may in the future be made or initiated against the Group which may have significant unfavourable effects on the Group's financial position, performance and market position or on the pricing of the Shares.
Certain financial information contained in this Presentation has not been reviewed by the Group's auditor or any other auditor or financial expert. Hence, such financial information might not have been produced in accordance with applicable or recommended accounting principles and may furthermore contain errors and/or miscalculations. The Group is the source of the financial information, and neither the Manager nor any of their Representatives shall have any liability (in negligence or otherwise) for any inaccuracy of the financial information set forth in this Presentation.
Solely for the purposes of the Manufacturer's (as used herein, "Manufacturer" refers to Arctic Securities AS) product approval process, the target market assessment in respect of the Shares has led to the conclusion that: (i) the target market for the Shares is professional clients as defined in Directive 2014/65/EU (as amended, "MiFID II"); and (ii) all channels for distribution of the Shares are appropriate. The negative target market for the Shares is retail clients as defined in MiFID II and investors looking for full capital protection or full repayment of the amount invested or having no risk tolerance, or investors requiring a fully guaranteed income or fully predictable return profile. Any person subsequently offering, selling or recommending the Shares (a "Distributor") should take into consideration the Manufacturer's target market assessment; however, a Distributor subject to MiFID II is responsible for undertaking its own target market assessment in respect of the Shares (by either adopting or refining the Manufacturer's target market assessment) and determining appropriate distribution channels.
The Manager will be paid a fee by the Issuer in respect of the Private Placement.
ANY POTENTIAL INVESTOR INVESTING IN THE SHARES IS BOUND BY THE FINAL TERMS WHICH THE INVESTOR ACKNOWLEDGES HAVING ACCEPTED BY SUBSCRIBING FOR SUCH SHARES.
3
| 2 1 |
2 | |||||
|---|---|---|---|---|---|---|
| Vertically Integrated Solar IPP | ||||||
| Targeted focus on fragmented European mid-sized | ||||||
| utility market |
Current Alternus Owned + Backlog Portfolio achieves blended Levered IRR of ~15%
(1) Alternus defines Market Price as the Net Present Value (NPV) of the projects over its useful life and discounted at the rates being applied by other market participants active in acquiring Solar PV projects. The values used in this document are supported by an independent analysis carried out by a large international accounting firm with expertise in these valuations.
Sizable and diversified portfolio of European producing PV assets with attractive return characteristics (incl. Poland park1 )
| Current | Number of | Operating | Annual production | Operational | Run-rate | Weighted avg. unexpired |
|---|---|---|---|---|---|---|
| Headcount | assets in operation | capacity | Operational | ARR | Project EBITDA | FiT/PPA term |
| 25 | 24 1 | 130 MW | 143 GWh | EUR 19.9m | EUR 17.6m | 8.8 years |
1) Poland acquisition not yet completed but Alternus is receiving cash benefit since January 1, 2021
I n v e s t m e n t H i g h l i g h t s 9
Significant increase in contracted backlog… …further enhancing portfolio diversification in both geography and project stage
| P R O J E C T D E V E L O P ME N T ( " P r oj e c t R i g h t s " ) | C O N ST R U C T I O N P H A SE ( " E P C " ) | O P E R A T I O N P H A SE ( " O & M" ) | ||||||
|---|---|---|---|---|---|---|---|---|
| Early Development stage |
Mid Development stage |
Late Development stage |
Construction & Commissioning Phase |
Long-term Operations – 30+ |
||||
| Project Identification Feasibility Analysis No fatal flaws identified |
Site secured Positive Grid assessment, Connection Offer Environmental assessment |
Finalising Financial Model Building Permits Grid connection secured PPA secured |
Construction planning, procurement of components and services Park physically constructed Ready to Connect |
Grid Connection & commissioning Start of energy production Production ramp up |
Proof of cashflow and planning parameters O&M Asset Management |
Long term production Operational life span optimization Potential technical upgrades |
||
| Low development costs |
Low development costs |
Grid Connection Deposit |
Construction costs, commissioning costs and operating costs in test phase |
Operation and Maintenance – Asset Management costs |
||||
| ~5% of capital costs |
~10% of capital costs |
~85% of capital costs | ||||||
| "Ready-to-Build" "RTB" |
"Commercial Operation Date" | "COD" |
1
Significant cost difference in buying projects earlier in cycle stage, with incremental differences reflected as equity returns
EV/EBITDA project cost at various stages in project cycle
Project Rights Connection EPC
I n v e s t m e n t H i g h l i g h t s 11
▪ Assuming only 50% of Development projects reach Construction then still 3:1 vs acquiring operational projects
I n v e s t m e n t H i g h l i g h t s 12
Headquartered in Rotterdam, the Netherlands, Unisun Energy Europe BV is a proven pan-European developer, EPC and O&M service provider of clean and sustainable energy solutions.
1
Vertical integration allowing for further value capture throughout solar PV value chain, lower cost growth and diversification of revenue streams
Highly profitable activities will provide a significant share of equity funding required for own development projects
Commentary
I n v e s t m e n t H i g h l i g h t s 14
2 Unisun Energy acquisition brings in-house O&M services and enhanced management of outsourced activities
In-house management of critical performance areas ensures maximum return from projects
~37% of project cashflows received by Alternus during first 10 years (using Bond debt)
1) O&M fees charged to project SPV's less cost of providing the services, where Alternus is the O&M provider. Not all projects will be serviced by Alternus.
Opportunistic & Agnostic approach to development construction / operations…. Driving rapid growth… 2
Multiple incountry partnerships allow for rapid scale at no fixed cost
Some of our partners:
contracts
3
Project Cash flow with non-amortising debt funding (year 1) – (EURm)
3
Project Cash flow with amortizing debt funding (year 1) – (EURm)
Cash flow example from a 100MW park on PPA
Incremental difference in equity cash flow from using non- amortising debt funding used to accelerate growth
I n v e s t m e n t H i g h l i g h t s 19
Incremental difference EUR 1.6m annually
Reinvested cash generated during bond financing is leveraged 8x with senior and junior debt…. 3
…to acquire additional capacity resulting in increased Annual Recurring Revenues for 30+ years
1) O&M fees charged to project SPV's less cost of providing the services, where Alternus is the O&M provider. Not all projects will be serviced by Alternus.
Mass Solar PV adoption phase as grid-parity achieved
Growth is now market demand driven – not subsidy driven
Swinging towards operator model
Source: Bloomberg New Energy Finance Note: Europe refers to all EU countries plus Switzerland, Ukraine, and Turkey.
I n v e s t m e n t H i g h l i g h t s 22
Extensive third-party expert analysis of technical, regulatory and profitability before acquiring new projects 4
'Finance First' methodology for project selection
20+ developer partners in multiple countries across Europe that provide a constant flow of new projects from their portfolios
Currently receive approximately 200 MW per month of new projects for evaluation
4 1
~891 ~900 ~1 100 ~2 441 ~1 541 ~3 541 Owned + Contracted Backlog
▪ Each operational MW added is expected to add circa EUR 70k in annual recurring revenues based on expected portfolio profiles
2025 operational portfolio target increased by 75% to 3.5 GWp
Indicates ~EUR 110m ARR's at YE2023
Potential ~EUR 250m ARR's at YE2025
Installed capacity beginning of year Operating Capacity additions in period
I n v e s t m e n t H i g h l i g h t s 23
I n v e s t m e n t H i g h l i g h t s 24
2
2015
MW
2017
+17 MW
2019
+109 MW
YTD '21
2016
Total Operational Owned & To Close
1) Note that the acquisitions are not yet completed; please see the first risk factor relating to unsuccessful completion of transactions
2) Including 65MW Polish asset expected to close in Q3
A l t e r n u s E n e r g y G r o u p 27
1) Including 65MW Polish asset expected to close in Q3
Off-take partners
A l t e r n u s E n e r g y G r o u p 28
| 1 | |
|---|---|
| Non-binding offer («NBO») letter & Compliance check (30-45 days) |
Commercial terms lock-in with NBO Letter ▪ Internal due diligence evaluation to verify LOI inputs ▪ Top Tier technical and legal Advisors perform 'Red ▪ flag' Evaluation |
| 2 Full stage due diligence (30-60 days) |
Due Diligence is undertaken by quality Advisors ▪ Orrick, KPMG, Protos & Moroni & Partners. Escrow and adjustments to be reflected in the SPA if ▪ required |
| 3 Sales purchase agreement (~30 days) |
SPA signed by both parties ▪ Information package sent to funding partners for ▪ drawdown – if applicable |
| 4 Closing (~15 days) |
The transaction is closed and ALTN becomes the ▪ owner of the project |
| al u ntract o C |
▪ Rigorous Due Diligence and Financial Modelling ▪ Binding long-term Government backed consumption contracts ▪ FiT/PPA's with bankable off-takers and municipalities ▪ Backup Spot Market revenues available constantly |
|---|---|
| al n o erati p O |
▪ Diversified portfolio revenues ▪ Comprehensive performance guarantee insurance ▪ World leading O&M providers & plant operational performance guarantees ▪ 24/7 plant monitoring |
| al hic p gra o e G |
▪ Country diversification mitigating regulatory risk exposure ▪ Asset diversification mitigating operational risks from park outages ▪ Blending of operational incomes allows for better revenue |
| xit E |
▪ Liquid Assets - highly active and competitive secondary market ▪ Project origination below market value ▪ Aggregation attracts more prominent investors & builds larger portfolios |
| . | . | . | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| . | . | . | |||||||||
| . | . | . | |||||||||
| . | . | . | |||||||||
| . | . | . | |||||||||
| . | . | . |
BSc in Mechanical Engineering
Joined Alternus in 2015 as CFO, completed an MBO in 2016 taking majority ownership, became Chairman and CEO in 2017
BComm (Accounting) University College Dublin
CFO of Homecare Direct and a nonexecutive director in a range of industries in the leasing, accounting, utilities and consumer goods industries
Fellow of Chartered Accountants Ireland and an Associate of the Chartered Institute of Arbitrators in Ireland
Co-Founder and Managing Partner of Doonbeg Group, Inc., an advisory and merchant banking firm founded in February of 2013
Nordic capital markets
▪ Ongoing discussions with a number of high-quality candidates with significant experience from the
Source: Bloomberg New Energy Finance
Note: Europe refers to all EU countries plus Switzerland, Ukraine, and Turkey.
M a r k e t O v e r v i e w 35
Average LOCE in UK and Germany
Note: Europe refers to all EU countries plus Switzerland, Ukraine, and Turkey. LCOE forecast based on real USD in real 2018 prices. 2013 and 2015 LCOE values are in nominal USD
Source: Bloomberg New Energy Finance
1) LCOE values shows average value for deployments in Germany and United Kingdom as of 2019
Source: Bloomberg New Energy Finance
Source: Bloomberg New Energy Finance Note: Europe refers to all EU countries plus Switzerland, Ukraine, and Turkey.
Source: Bloomberg New Energy Finance
Note: Europe refers to all EU countries plus Switzerland, Ukraine, and Turkey.
F i n a n c i a l O v e r v i e w 41
High and stable margins yielding considerable cash flows (Current portfolio run-rate figures in EURm) 2
| Audited | Unaudited | Current | |||
|---|---|---|---|---|---|
| EUR '000 | 2018 | 2019 | 2020 | 1Q '21 | Run Rate |
| Revenue | 2,319 | 2,310 | 3,827 | 700 | 19,912 |
| Cost of goods sold | (1,144) | (660) | (969) | (108) | (2.356) |
| Gross profit (reported) | 1,175 | 1,650 | 2,857 | 592 | 17,556 |
| Selling, general & administrative | (1,626) | (3,978) | (2,561) | (489) | (1,900) |
| Loss on disposals of energy assets |
(609) | - | - | - | - |
| EBITDA | (1,060) | (2,328) | 297 | 103 | 15,656 |
| D&A | (626) | (1,066) | (1,634) | (524) | (5,354) |
| EBIT | (1,686) | (3,394) | (1,338) | (421) | 10,302 |
| Other non-operating income / (loss) |
- | (119) | - | 4,001 | |
| Gain on bargain purchase | 1,452 | 3,675 | - | 392 | |
| Net financial expenses | (1,264) | (2,868) | (3,932) | (4,212) | |
| Pre-tax profits | (1,497) | (2,706) | (5,270) | (240) | |
| Provision for income tax | (161) | - | - | - | |
| Net income | (1,658) | (2,706) | (5,270) | (240) |
Run-rate project EBITDA by country
Note that audited financials in USD converted to EUR at exchange rate .894 for 2018, .893 for 2019, and .891 for 2020
F i n a n c i a l O v e r v i e w 43
F i n a n c i a l O v e r v i e w 44
| Audited | Unaudited | |||||
|---|---|---|---|---|---|---|
| EUR '000 | 2018 | 2019 | 2020 | Q1 '21 | ||
| Cash flows from operating activities | ||||||
| Net loss | (1,657) | (2,706) | (5,670) | (240) | ||
| Depreciation & Amortisation | 626 | 1,066 | 1,758 | 1,053 | ||
| Gain on bargain purchase | (1,452) | (3,675) | - | (392) | ||
| Loss on sale of energy assets | 609 | - | - | - | ||
| Other | 1,095 | 1,712 | 771 | (3,936) | ||
| Change in NWC | 827 | 1,397 | 2,781 | 776 | ||
| Net cash from operating activities | 47 | (2,206) | (359) | (2,739) | ||
| Cash flows from investing activities | ||||||
| Additions to plants under construction | (6,263) | (49) | (1,334) | (217) | ||
| Acquisition of energy assets | (6,145) | (8,050) | (424) | (27,867) | ||
| Proceeds from sale of energy assets | 3,363 | - | - | - | ||
| Net cash flow from investing activities | (9,046) | (8,099) | (1,758) | (28,084) | ||
| Cash flows from financing activities | ||||||
| Debt/Equity drawings | 21,147 | 4,470 | 2.443 | 123,815 | ||
| Debt repayments | (3,684) | (1,702) | (42) | - | ||
| Payments on leased assets | - | - | (83) | - | ||
| Net cash flow from financing activities | 17,463 | 2,768 | 2,318 | 123,815 | ||
| Effect of exchange rates on cash | 259 | (20) | 82 | 18 | ||
| Net increase in cash and equivalents | 8,724 | (7,557) | 282 | 93,010 | ||
| Cash balance, beginning of period | 112 | 8,839 | 1,273 | 1,532 | ||
| Cash balance, end of period | 8,839 | 1,273 | 1,532 | 94,542 |
Note that audited financials in USD converted to EUR at exchange rate, .894 for 2018, .893 for 2019, and .877 for 2020
F i n a n c i a l O v e r v i e w 45
| Unaudited | ||||
|---|---|---|---|---|
| EUR '000 | 2018 | 2019 | 2020 | Q1 '21 |
| Current Assets | ||||
| Cash and equivalents | 897 | 960 | 971 | 18,056 |
| Accounts receivable | 268 | 187 | 698 | 696 |
| Other short term assets | 1,056 | 1,335 | 1,199 | 2,660 |
| Total current assets | 2,222 | 2,482 | 2,868 | 21,412 |
| Non-current assets | ||||
| Investment in energy assets | 18,979 | 36,318 | 35,947 | 64,071 |
| Leased assets (IFRS) | - | - | - | 1,881 |
| Other long term assets | - | 354 | 6,624 | - |
| Goodwill | - | 1,207 | 1,100 | 3,776 |
| Restricted cash | 7,740 | 312 | 455 | 76,378 |
| Total non-current assets | 26,719 | 38,191 | 44,126 | 146,106 |
| Total Assets | 28,941 | 40,673 | 46,994 | 167,518 |
| Unaudited | ||||
|---|---|---|---|---|
| EUR '000 | 2018 | 2019 | 2020 | Q1 '21 |
| Current labilities | ||||
| Accounts payable | 1,483 | 3,300 | 12,631 | 6,489 |
| Interest bearing debt, current | 12,679 | 20,247 | 21,133 | 14,746 |
| Asset retirement obligation | 395 | 133 | 82 | - |
| Total Current liabilities | 14,557 | 23,680 | 33,846 | 21,235 |
| Non-current liabilities Interest bearing debt, non-current (net of debt |
||||
| discount) | 9,018 | 12,581 | 13,710 | 120,782 |
| Land lease liability (IFRS) |
- | - | - | 1,881 |
| Other non-current liabilities | 967 | 954 | 878 | - |
| Total non-current liabilities | 9,985 | 13,535 | 14,588 | 122,663 |
| Total liabilities | 28,086 | 41,735 | 48,434 | 143,898 |
| Shareholders' equity | ||||
| Paid in capital (Incl. shareholders loan) | 11,600 | 13,848 | 12,804 | 39,205 |
| Retained earnings | (7,201) | (10,390) | (14,246) | (15,585) |
| Total Shareholders equity | 4,399 | 3,458 | (1,442) | 23,620 |
| Total liabilities & SE | 28,941 | 40,673 | 46,992 | 167,518 |
F i n a n c i a l O v e r v i e w 47
Integrated banking relationships
MINIMAL OPERATIONAL IMPACT FROM COVID-19
An investment in Alternus Energy Group Public Limited Company, incorporated in Ireland (the "Company") involves inherent risks, and an investment in the Company's shares (the "Shares") is suitable only for investors who understand the risks associated with this type of investment and who can afford a loss of all or part of their investment. The following risk factors discuss the principal risks that the Company and all its subsidiaries (together the "Group") face. Any of these risk factors could have a significant or material adverse effect on the Group's business, results of operations, financial condition or liquidity. They could also cause significant fluctuations and volatility in the trading price of the Shares and/or result in the Issuer becoming insolvent or in an adverse financial position, resulting in the loss of all or part of an investment in the Shares. Readers should not consider any descriptions of these factors to be a complete set of all potential risks and uncertainties that could affect the Group, and the order in which the risks are presented below is not intended to provide an indication of the likelihood of their occurrence nor of their severity or significance. Many of these risks are interrelated, and the occurrence of certain of them may in turn cause the emergence or exacerbate the effect of others. Such a combination could materially increase the severity of the impact of these risks on our business, results of operations, financial condition and liquidity.
The Group is currently negotiating several transactions to acquire solar parks in Poland, Germany, Italy, Greece, Spain, Romania and elsewhere across Europe, all as further described in the Presentation (jointly, the "Transactions"). There can be no assurances that the Transactions will complete. Further, one or more of the Transactions may complete, whereas others may not. Investors thus risk that an investment in the Company is made without the Group becoming the owner of some or all of the assets comprised by the Transactions. In such a case, the descriptions of the Group's business and expected revenues, cash flows and profits may not be correct. The Board of Directors of the Company believes that the Transactions are in the best interests of the Group and that the Transactions will provide the Group with an opportunity to profitably expand its operations.
If some or all of the Transactions do not complete there can be no assurance that the Group would be able to acquire interests at a later stage. In addition, the Group's continued operations will be less diversified. No claims may be made against the Company on the basis that some or all of the Transactions do not complete.
The Company has no direct operations and derive all its cash flows from its subsidiaries. Because the Company conducts its operations through its subsidiaries, it depends on those entities for payments or distributions to meet its obligations. The deterioration of the earnings from, or other available assets of, its subsidiaries for any reason could limit or impair their ability to pay the Company.
Government subsidies and incentives have primarily been in the form of Feed-in Tariffs ("FiT") price support schemes, tax credits, net metering and other incentives to end users, distributors, system integrators and manufacturers of solar energy products. The availability and size of such subsidies and incentives depend, to a large extent, on political and policy developments relating to environmental concerns in a given country. Changes in policies could lead to a significant reduction in or a discontinuation of the support for renewable energies in such country, which could in turn have a material adverse effect on the Group's business, financial condition, results of
The price of electricity from the Group's solar parks are fixed through power purchase agreements ("PPAs") or FiTs for 100% of its owned capacity. The FiTs are typically long term arrangements and provide a pricing, and hence revenue "floor", whereas the PPAs that currently provide the additional revenue are typically renewed and may be terminated annually. In countries where the price of electricity is sufficiently high that solar parks can be profitably developed without the need for government price supports, solar parks may choose not to enter into PPAs and sell based on the spot market price of electricity. Revenue for the Group's solar parks in Italy and Romania will also fluctuate with the electricity spot market after the expiration of any PPA, unless renewed. The market price of electricity can be subject to significant fluctuations.
Decreases in the spot price of electricity in such countries would render PV energy less competitive compared to other forms of electricity. Thus, the spot market price of electricity may have a material adverse effect on the Group's business, results of operations, cash flows and financial condition.
Payments by power purchasers pursuant to a PPA may provide the majority of a company's or a project's cash flows. There can be no assurance that any or all of the power purchasers will fulfil their obligations under their PPAs or that a power purchaser will not become bankrupt or that upon any such bankruptcy its obligations under its respective PPA will not be rejected by a bankruptcy trustee. There are also additional risks relating to PPAs, including the occurrence of events beyond the control of a power purchaser that may excuse it from its obligation to accept and pay for delivery of energy generated by the project company's plant. The failure of a power purchaser to fulfil its obligations under any PPA or the termination of any PPA may have a material adverse effect on the respective project or project company and therefore on the Group.
The energy production industry is subject to seasonal variations as well as other significant events. For instance, the amount of electricity and revenues generated by the Group's solar generation facilities is dependent in part on the amount of sunlight, or irradiation, where the assets are located. Due to shorter daylight hours in winter months which results in less irradiation, the generation produced by these facilities will vary depending on the season.
The seasonality of the Group's energy production may create increased demands on liquidity during periods when cash generated from operating activities are lower and the Group may also require additional equity or debt financing to maintain its solvency, which may not be available when required or available on commercially favourable terms. Thus, there is a risk that the Group can struggle to maintain sufficient financial liquidity to absorb the impact of seasonal variations in energy productions and other significant events and seasonal variations may materially affect the Group's business, results of operations, cash flow and financial condition.
A significant part of the Group's business model is to acquire new renewable energy facilities and companies that own and operate renewable energy facilities. Acquisition of renewable energy facilities or of companies that own and operate renewable energy facilities is subject to substantial risk. While the Group performs due diligence on prospective acquisitions, it may not be able to discover all potential operational deficiencies in such renewable energy facilities. In addition, the Group's expectations for the operating performance of newly constructed renewable energy facilities as well as those under construction are based on assumptions and estimates made without the
If the Group consummates any future acquisitions, its capitalization and results of operations may change significantly, and shareholders will generally not have the opportunity to evaluate the economic, financial and other relevant information that the Group considers in determining the application of these funds and other resources. As a result, the consummation of acquisitions may have a material adverse effect on the Group's business, financial condition, results of operations and cash flows.
Further, the Group may not be able to successfully integrate acquired businesses and, where desired, their product portfolios, and therefore the Group may not be able to realize the intended benefits of such acquisitions. The failure to integrate acquired businesses effectively may adversely impact the Group's business, results of operations or financial condition.
The Group intends to expand its business significantly within selected existing markets and in a number of new locations in the future. As the Group grows, it expects to encounter additional challenges to internal processes, external construction management, capital commitment process, project funding infrastructure, acquisition funding and financing capabilities. Existing operations, personnel, systems and internal control may not be adequate to support the Group's growth and expansion and may require the Group to make additional unanticipated investments in its infrastructure. To manage the future growth of operations, the Group will be required to improve its administrative, operational and financial systems, procedures and controls, and maintain, expand, train and manage its growing employee base. The Group will need to hire and train project development personnel to expand and manage its project development efforts. If the Group is unable to manage its growth effectively, it may not be able to take advantage of market opportunities, execute its business strategies successfully or respond to competitive pressures. As a result, its business, prospects, financial condition and results of operations could be materially and adversely affected.
There are generally multiple months between the initial significant upfront investments in developing permits to build solar parks which the Group expects to own and operate and when the Group begin to receive revenues from the sale of electricity generated by such solar parks after grid connection. Historically, the Group has relied on third party equity contribution, bridging and bank loans to pay for costs and expenses incurred during project development, especially to third parties for PV modules and balance-of-system components and EPC and operations and maintenance ("O&M") services. Such investments may be non-refundable. Solar parks typically generate revenue only after becoming commercially operational and once they are able to sell electricity to the power grid. Between the Group's initial investments in the development of solar parks (through its model of working with local developers) and their connection to the transmission grid, there may be adverse developments impacting such solar parks. The timing gap between the Group's upfront investments and actual generation of revenue, or any added delay due to unforeseen events, could put strains on the Group's liquidity and resources and materially and adversely affect the Group's profitability and results of operations.
Development of solar power projects can take many months or years to complete and may be delayed for reasons beyond the Group's control. Development usually requires the Group to make some up-front payments for, among other things, land/rooftop use rights and permitting in advance of commencing construction, and revenue from these projects may not be recognized for several additional months following contract signing. Furthermore, the Group
may become constrained in its ability to simultaneously fund other investments in such projects.
Development, operation and maintenance of renewable energy projects and related infrastructure expose the Group to numerous risks, including construction, environmental, regulatory, permitting, commissioning, start-up, operating, economic, commercial, political and financial risks. This will involve risks of failure to obtain or substantial delays in obtaining: (i) regulatory, environmental or other approvals or permits; (ii) financing; (iii) leasing; and (iv) suitable equipment supply, operating and off-take contracts. Moreover, renewable energy assets are subject to energy regulation and require governmental licenses and approval for their operation. The failure to obtain, maintain or comply with the licenses and approvals relating to the Group's assets and the resulting costs, fines and penalties, could materially and adversely affect the Group's ability to operate the assets. Renewable energy projects also require significant expenditure before the assets begin to generate income and often require long-term investment to enable projects to generate expected levels of income. Development of solar power projects also requires significant management attention to negotiate the terms of engagement and monitor the progress of the projects which may divert management's attention from other matters.
The development of solar projects involves numerous risks and uncertainties and requires extensive research, planning and due diligence. The Group may be required to incur significant amounts of capital expenditure for land/rooftop use rights, interconnection rights, preliminary engineering, permits, legal and other expenses before it can determine whether a solar power project is economically, technologically or otherwise feasible. Success in developing a solar power project is contingent upon, among other things:
Successful completion of a particular solar project may be adversely affected by numerous factors, including without limitation:
Accordingly, some of the solar power projects in the Group's pipeline may not be completed or even proceed to construction. If a number of solar power projects are not completed, the Group's business, financial condition and results of operations could be materially and adversely affected.
Development of the Group's solar power projects may be adversely affected by circumstances outside of its control, including inclement weather, a failure to receive regulatory approvals on schedule or third-party delays in providing solar modules, inverters or other materials. Obtaining full permits for solar power projects is time consuming and the Group may not be able to meet the expected timetable for obtaining full permits for solar power projects in the pipeline. In addition, the Group usually rely on external contractors for the development and construction of solar power projects, and may not be able to negotiate satisfactory agreements with them. If contractors do not satisfy their obligations or do not perform work that meets the Group's quality standards or if there is a shortage of thirdparty contractors or if there are labor strikes that interfere with the ability of employees or contractors to complete their work on time or within budget, the Group could experience significant delays or cost overruns. Changes in project plans or designs, or defective or late execution may increase the Group's costs and cause delays. Increases in the prices of solar products and balance-of-system components may increase procurement costs. Labor shortages, work stoppages or labor disputes could significantly delay a project or otherwise increase costs. In addition, delays in obtaining, the Group's inability to obtain, or a lack of proper construction permits or postconstruction approvals could delay or prevent the construction of solar power projects, commencing operation and connecting to the relevant grid.
The Group may not be able to recover any of these losses in connection with construction cost overruns or delays. In addition, in certain cases of delay, the Group might not be able to obtain any FIT or PPA at all, as certain FITS or PPAs require that it connects to the transmission grid by a certain date. A reduction or forfeiture of FIT or PPA payments or would materially and adversely affect the financial results and results of operations for that solar power project.
Insufficient quality of installed solar modules and other equipment resulting in faster than estimated degradation, may lead to lower revenues and higher maintenance costs, particularly if the product guarantees have expired or the supplier is unable or unwilling to respect its obligations. Even well maintained high quality PV solar power plants may from time to time experience technical breakdown. Furthermore, widespread PV plant failures may damage the Company's market reputation, reduce its market share and cause a decline of construction projects. Although a defect in the Company's PV plants may be caused by defects in products delivered by the Company's sub-suppliers which are incorporated into the Company's PV plants, there can be no assurance that the Company will be entitled to or successful in claiming reimbursement, repair, replacement or damages from its sub-suppliers relating to such defects.
The Group began its business in 2014 and therefore have a limited operating history. After its initial two parks totaling 6 MW were constructed in Romania in 2014, the Group began to acquire existing operational solar parks in Italy. As of December 31, 2020 the Group had a total of 50 MWp of solar parks in ownership with 26 MWp in operation giving a carrying value of USD 44.1 million.
The Group intends to further expand its business operations in Europe and over time, to also establish operations outside of Europe and enter other select geographies where high solar radiation accessibility, regulatory environments, power pricing, land availability, sufficient and cost effect financing access and overall power market trends support the high return on capital employed (ROCE) targets that the Group achieves today. The Group's rapidly evolving business and, in particular, its relatively limited operating history may not be an adequate basis for evaluating its business prospects and financial performance, and makes it difficult to predict the future results of operations.
Holding companies in the Group have historically entered into many transactions with their affiliates. These transactions include financial guarantees and other credit support arrangements, including letters of comfort to such affiliates pursuant to which the holding companies undertake to provide financial support to these affiliates and adequate resources as required to ensure that they are able to meet certain liabilities and local solvency requirements. These holding companies are currently party to many such affiliate transactions, and it is likely they will enter into new and similar affiliate transactions in the future.
In the event that any of these affiliates become bankrupt or insolvent, there can be no assurance that a court or other foreign tribunal, liquidator, monitor, trustee or similar party would not seek to enforce these intercompany arrangements and guarantees or otherwise seek relief against the holding companies and their other affiliates. If any of the Issuer's material foreign subsidiaries (e.g. subsidiaries that hold a significant number of customer contracts, or that are the parent company of other material subsidiaries) become subject to a bankruptcy, liquidation or similar insolvency proceeding, such proceeding could have a material adverse effect on the business and results of operations of the Group.
The Group's business as an independent power producer ("IPP") requires significant financial resources and the growth prospects and future profitability of the Group depends to a significant extent on the availability of additional funding options with acceptable terms. If the Group does not successfully execute its financing plan, it may have to sell certain of its solar parks
The Group's principal resources of liquidity to date have been cash from its operations and borrowings from banks and its shareholders. The Group leverages bank facilities in certain countries in order to meet working capital requirements for construction activities. The Groups' principal use of cash has been for pipeline development, working capital and general corporate purposes.
The Group also requires a significant amount of cash to fund the acquisition, installation and construction of its projects and other aspects of its operations. The Group may also require additional cash due to changing business conditions or other future developments, including any investments or acquisitions it may decide to pursue in order to remain competitive. Historically, the Group has used bank loans, bridging loans and third-party equity contribution to fund its project acquisition and development. The Group expects to seek to expand its business with third-party financing options, including bank loans, equity partners, financial leases and securitization. However, it cannot be guaranteed that the Group will be successful in locating additional suitable sources of financing in the time periods required or at all, or on terms or at costs that it finds attractive or acceptable, which may render it impossible for the Group to fully execute its growth plan.
Any debt financing may require restrictive covenants and additional funds may not be available on terms commercially acceptable to the Group. Failure to manage discretionary spending and raise additional capital or debt financing as required may adversely impact the Group's ability to achieve its intended business objectives.
The Group cannot assure that it will successfully execute its financing plan. If it does not successfully execute this plan, it may not be able to continue as a going concern. Such failure could materially and adversely affect the Group's financial condition, results of operations and business prospects.
The renewable energy industry is highly competitive and the Group faces significant competition in the markets in which it operates. Some of its competitors may have advantages over it in terms of greater operational, financial, technical, management or other resources in particular markets or in general. The Group's competitors may also enter into strategic alliances or form affiliates with other competitors to the Group's detriment. Suppliers or contractors may merge with the Group's competitors which may limit the Group's choices of contractors and hence the flexibility of its overall project execution capabilities. Increased competition may result in price reductions, reduced profit margins and loss of market share.
Moreover, the Group's current business strategy is to become a global IPP and to own and operate all of the solar parks which the Group develops and acquires. As part of the Group's growth plan, it may, in the future, acquire solar parks in various development stages through a competitive bidding process as part of the auction schemes in the various jurisdictions it plans to grow and establish itself in as well as the current countries the Group operates in. The bidding and selection process is affected by a number of factors, including factors which may be beyond the Group's control, such as market conditions or government incentive programs. The Group's competitors may have greater financial resources, a more effective or established localized business presence or a greater willingness or ability to operate with little or no operating margins for sustained periods of time. Any increase in competition during such bidding processes or reduction in the Group's competitive capabilities could have a significant adverse impact on the Group's market share and on the margins it generates from its solar parks.
Further, large, utility-scale solar parks must be interconnected to the power grid in order to deliver electricity, which requires the Group, through its local partnerships, to find suitable sites with capacity on the power grid available. The Group's competitors may impede the Group's development efforts by acquiring control of all or a portion of a PV site the Group seek to develop. Even when the Group has identified a desirable site for solar park, its ability to obtain site control with respect to the site is subject to its ability to finance the transaction and growing competition from other solar power producers that may have better access to local government support, financing or other resources. If the Group is unable to find or obtain site control for suitable PV sites on commercially acceptable terms, its ability
to develop new solar parks on a timely basis or at all might be harmed, which could have a material adverse effect on the Group's business, financial condition and results of operations.
The success of the Group depends to a significant degree on the services rendered to it by its key employees. Due to the level of technical expertise necessary to support the Group's business strategy, the success of the Group will depend upon its ability to attract and retain highly skilled and seasoned professionals in the solar industry for which competition is intense. In particular, the Group is heavily dependent on the continued services of Mr. Vincent Browne, Chief Executive Officer and Chairman of the Board. The loss of any key employee, including executive officers or members of senior management teams, and the failure to attract, train and retain highly skilled personnel with sufficient experience in the industry to replace them, could harm the Group's prospects, business, financial condition, and the results of operations will be materially affected. In addition, the Group does not maintain any "keyman" insurance policies on Mr. Vincent Browne or any other employees.
The PV market is at a relatively early stage of development in some of the markets that the Group intends to enter. The PV industry continues to experience lower costs, improved efficiency and higher electricity output. However, trends in the PV industry are based only on limited data and may not be reliable. Many factors may affect the demand for solar parks including, among other, cost and availability of financing for solar parks, fluctuations in economic and market conditions, competition from non-solar energy sources, environmental concerns, public perception and regulations and policies governing the electric power industry and the broader energy industry.
If market demand for solar parks fails to develop sufficiently, the Group's business, financial condition, results of operations and prospects could be materially and adversely affected.
The Group procures supplies for solar park construction, such as PV modules and balance-of-system components, from third-party suppliers. The Group typically enters into contracts with its suppliers and contractors on a project-byproject basis or a project portfolio basis. The Group generally does not maintain long-term contracts with its suppliers. Therefore the Group is exposed to fluctuations in prices for its PV modules and balance-of-system components. Increases in the prices of PV products or balance-of-system components or fluctuations in design, construction, labor and installation costs may increase the cost of procuring equipment and engaging contractors and hence materially and adversely affect the Group's results of operations.
The Group has a contract with a third party O&M company to carry out the O&M of the Group's solar parks. They may subcontract certain on-the-ground O&M services, including security and repair, to third-parties, who may not perform their services adequately. If the Group's third-party contractors fail to properly operate and maintain the solar parks, the solar parks may experience decreased performance, reduced useful life or shut downs. Through changes in the Group's own operation or in local conditions, the costs of operating the project may increase, including costs related to labor, equipment, insurance and taxes. If the contractors are careless or negligent, resulting in damage to third parties, the Group may become liable for the consequences of any resulting damage.
The Group may also experience equipment malfunction or failure, leading to unexpected maintenance needs, unplanned outages or other operational issues. In addition, inconsistencies in the quality of solar panels, PV modules, balance-of-system components or maintenance services for the Group's solar parks may affect the system efficiency of the solar parks. The Group may also encounter difficulties selling electricity to the power grid due to failures in infrastructure or transmission systems. To the extent that any of the foregoing affect the Group's ability to sell electricity to the power grid, or the Group incurs increased costs in relation to operating and maintaining solar parks, the Group's business, financial condition and results of operation could be materially and adversely affected.
The Group's facilities may require periodic upgrading and improvement. Any unexpected operational or mechanical failure, such as the failure of a single inverter, or other failures associated with breakdowns and forced outages generally, and any decreased operational or management performance, could reduce its facilities' generating capacity below expected levels, reducing the Group's revenues. Unanticipated capital expenditures associated with upgrading or repairing the Group's facilities may also reduce profitability.
The Group may also choose to refurbish or upgrade its facilities based on its assessment that such activity will provide adequate financial returns and key assumptions underpinning a decision to make such an investment may prove incorrect, including assumptions regarding construction costs, timing, available financing and future power prices. This could have a material adverse effect on the Group's business, financial condition, results of operations and cash flows.
Moreover, spare parts for solar facilities and key pieces of equipment may be hard to acquire or unavailable to the Group. Sources of some significant spare parts and other equipment are located outside of the jurisdictions in which the Group operates. Suppliers of some spare parts have filed, or may in the future file for, bankruptcy protection, potentially reducing the availability of parts that the Group requires to operate certain of its power generation facilities. Other suppliers may for other reasons cease to manufacture parts that the Group requires to operate certain of its power generation facilities. If the Group was to experience a shortage of or inability to acquire critical spare parts, it could incur significant delays in returning facilities to full operation, which could negatively impact its business financial condition, results of operations and cash flows.
The Group may operate in areas that are under the threat of floods, earthquakes, landslides, mudslides, sandstorms, drought, or other inclement weather and climate conditions or natural disasters. If inclement weather or climatic conditions or natural disasters occur in areas where the Group's solar parks and project teams are located, project development, connectivity to the power grid and the provision of O&M services may be adversely affected. In particular, materials may not be delivered as scheduled and labor may not be available. As some of the Group's solar parks are located in the same region, such solar parks may be simultaneously affected by weather and climate conditions, natural disasters and adverse work environments.
Moreover, natural disasters which are beyond the Group's control may adversely affect the economy, infrastructure and communities in the countries and regions where it conducts its business operations. Such conditions may have an adverse effect on the Group's work performance, progress and efficiency or even result in personal injuries or fatalities.
The Group's operations and those of its contract manufacturers and outsourced service providers are vulnerable to interruption by fire, earthquake, hurricane, flood or other natural disaster, power loss, computer viruses, computer systems failure, telecommunications failure, quarantines, national catastrophe, terrorist activities, war and other events beyond the Group's control. For instance, some of the Group's solar parks are located in Italy, near to medium risk areas regarding seismic activity and may be vulnerable to damage from earthquakes. If any disaster were to occur, the Group's ability and the ability of its contract manufacturers and outsourced service providers to operate could be seriously impaired and the Group could experience material harm to its business, operating results and financial condition. In addition, the coverage or limits of its business interruption insurance may not be sufficient to compensate for any losses or damages that may occur.
Any such terrorist acts, environmental repercussions or disruptions, natural disasters, theft incidents or other catastrophic events could result in a significant decrease in revenues or significant reconstruction, remediation or replacement costs, beyond what could be recovered through insurance policies, which could have a material adverse effect on the Group's business, financial condition, results of operations and cash flows.
The outbreak of the coronavirus (COVID-19) may have material adverse effects on the Group. The coronavirus may affect the overall performance of the Group, including the Group's ability to develop its services and implement its business plan, and may result in delays, additional costs and liabilities, which in turn could have a material adverse effect on the Group's results, financial condition, cash flows and prospects.
The Group cannot predict how long the COVID-19 pandemic will last, whether it will worsen or whether there will be further outbreaks in the future in any of the markets where it operates. The full extent to which the COVID-19 pandemic will negatively affect results of operations, financial condition and cash flows will depend on future developments that are highly uncertain and cannot be predicted, including the scope and duration of the pandemic, the duration of the various shelter-in-place orders and reopening plans, the speed and effectiveness of vaccines and treatment developments and deployment in the countries where the Group operates, potential mutations of COVID-19, and actions taken, or that may be taken in the future, by governmental authorities and other third parties in response to the pandemic.
In general, the Group's business could be adversely affected by the effects of epidemics, including, but not limited to, COVID-19, avian influenza, severe acute respiratory syndrome (SARS), the influenza A virus, Ebola virus, severe weather conditions such as a snowstorm, flood or hazardous air pollution, or other outbreaks. In response to an epidemic or other outbreaks, government and other organizations may adopt regulations and policies that could lead to severe disruption to the Group's daily operations. These severe conditions may cause the Group and/or its partners to make internal adjustments, including but not limited to, temporarily closing down businesses, suspending project construction, limiting business hours, and setting restrictions on travel for a prolonged period of time. The effects of a severe condition may cause business disruption, resulting in material, adverse impact to our financial condition and results of operations.
The Group may, in the ordinary course of business, become involved in such proceedings which may be expensive, lengthy, disruptive to normal business operations and require significant attention from the Group's management bodies. Charges and write-downs associated with such legal proceedings could have a material adverse effect on the Group's financial condition, results of operations and cash flows. Moreover, legal proceedings, particularly those
resulting in judgments or findings against the Group, may harm its reputation and competitiveness in the market.
If the Company were found to be liable on any of the claims against it in the future, it would incur a charge against earnings to the extent a reserve had not been established for coverage. If amounts ultimately realized from the claims were materially lower than the balances included in the Group's financial statements, it would incur a charge against earnings to the extent profit had already been accrued. Charges and write-downs associated with such legal proceedings could have a material adverse effect on the Group's financial condition, results of operations and cash flow. Moreover, legal proceedings, particularly those resulting in judgments or findings against the Group, may harm its reputation and competitiveness in the market.
The Group's energy facilities may be located on land which may be subject to governmental seizure or expropriation. For example, properties relating to the Group's operations in Scornicesti, Romania, are subject to an ongoing expropriation procedure due to the construction of a new express motorway. The authorities have offered a compensation of approximately euro 1.6 million should the authorities decide to proceed. It is, however, not possible to state with any certainty if or when the expropriation will proceed and have any effect on the Group's operations. Further, it is not possible to confirm whether the offered compensation at the time when any expropriation takes effect will represent a fair compensation in the views of the Group. In general, similar proceedings may affect other operations of the Group, in which case operations may have to terminate without sufficient compensation being paid to the Group.
In addition to expropriation risk, renewable energy facilities are generally located on land occupied by the facility pursuant to long-term easements and leases. The ownership interests in the land subject to these easements and leases may be subject to mortgages securing loans or other liens (such as tax liens) and other easement and lease rights of third parties (such as leases of oil or mineral rights) that were created prior to the facility's easements and leases. As a result, the facility's rights under these easements or leases may be subject, and subordinate, to the rights of those third parties, or even to the government. The Group performs title searches and obtains title insurance to protect itself against these risks. Such measures may, however, be inadequate to protect the Group against all risk of loss of the Group's rights to use the land on which the renewable energy facilities are located, which could have a material adverse effect on the Group's business, financial condition and results of operations.
Furthermore, the Group is subject to the risk of potential disputes with property owners or third parties who otherwise have rights to or interests in the properties used for the Group's solar parks. Such disputes, whether resolved in the Group's favor or not, may divert management's attention, harm the Group's reputation or otherwise disrupt its business. An adverse decision from a court or the absence of an agreement with such third-parties may result in additional costs and delays in, or the permanent termination of, the construction and operating phases of any solar park so situated.
As an IPP, the Group generate electricity income primarily pursuant to FiT price support schemes or GCs, which subjects the Group to counterparty risks with respect to regulatory regimes. Its FiT price support schemes in one region or country are generally signed with a limited number of electric utilities. The Group relies on these electric utilities to fulfill their responsibilities for the full and timely payment of its tariffs. In addition, the relevant regulatory authorities may retroactively alter their FiT price support regimes or GC schemes in light of changing economic circumstances, changing industry conditions or for any number of other reasons. If the relevant government authorities or the local power grid companies do not perform their obligations under the FiT or GC price support schemes and the Group is unable to enforce its contractual rights, the Group's results of operations and financial condition may be materially and adversely affected.
The development and operation of solar power projects are highly regulated activities. The Group conducts its business in many countries and jurisdictions and are governed by different laws and regulations, including national and local regulations relating to building codes, taxes, safety, environmental protection, utility interconnection and metering and other matters. The Group also set up subsidiaries in these countries and jurisdictions which are required to comply with various local laws and regulations. While the Group strives to work with its local counsel and other advisers to comply with the laws and regulations of each jurisdiction in which it has operations, there may be instances of non-compliance, which may result in fines, sanctions and other penalties against the non-complying subsidiaries and its directors and officers. For example, the Group's Romanian subsidiary, LJG Green Source Energy Beta S.r.l. has an ongoing ANRE investigation resulting from actions of the previous owner related to the breach of Article 5 of the EU Regulation No. 1227/2011 on wholesale energy market integrity and transparency ("REMIT") by engaging in market manipulation or attempted market manipulation on the wholesale energy markets following transactions concluded between 1 January 2019 to 31 March 2020. This investigation could result in penalties or fines. Based on applicable regulations, the likely penalties would be in the amount ranging from RON 20,000 (approx. EUR 4,060) to RON 400,000 (approx. EUR 81,260) for breaches of Article 5 of the REMIT. Apart from this specific penalty, the Company note that considering that multiple agreements were concluded in breach of such regulations there is a significant risk for ANRE to apply the fine for repeated breaches which amounts to 1% to 5% of the annual turnover of the company in the year before the sanction is applied. Also, considering that the investigation is ongoing and no partial report has been received from the regulatory authority, the Company cannot confirm that the results of the investigation shall remain within these limits. In accordance with the Romanian legislation, ANRE can suspend the license for the commercial exploitation of the park for breaches by the license holder of its obligation under the primary and secondary legislation or the license itself. The Group has held back EUR 950,000 from the consideration paid to the seller for this contingency. If the penalties are greater than this amount, the Group will attempt to collect this from the seller within the general terms agreed for limitation of liability, but there is no guarantee that it would be successful in doing so. While the Group does not believe it has any other instances of non-compliance with the energy sector regulations, singularly or in the aggregate, that will have a material adverse effect on its business, financial condition or results of operation, it cannot assure that instances of non-compliance will not occur in the future which may materially and adversely affect its business, financial condition or results of operation.
In order to develop solar power projects, the Group must obtain a variety of approvals, permits and licenses from various authorities. The procedures for obtaining such approvals, permits and licenses vary from country to country, making it onerous and costly to track the requirements of individual localities and comply with the varying standards. Moreover, sovereign states retain the power to adjust their energy policies and alter approval procedures applicable to the Group. If the regulatory requirements become more stringent or the approval process becomes less efficient, the key steps in the Group's business operations including project development, facility upgrading and product sales, could be severely disrupted or delayed. Failure to obtain the required approvals, permits or licenses or to comply with the conditions associated therewith could result in fines, sanctions, suspension, revocation or non-renewal of approvals, permits or licenses, or even criminal penalties, which could have a material adverse effect on the Group's business, financial condition and results of operations.
Any new government regulations pertaining to the Group's business or solar power projects may result in significant additional expenses. The Group cannot assure that it will be able to promptly and adequately respond to changes of laws and regulations in various jurisdictions, or that its employees and contractors will act in accordance with such laws. Failure to comply with laws and regulations where the Group develops, constructs and operates solar power projects may materially and adversely affect our business, results of operations and financial condition.
Insurance companies in many countries offer only limited business insurance options. As a result, the Group has not maintained, and generally do not maintain, full liability, hazard or other insurance covering its services, business, operations, errors, acts or omissions, personnel or properties. To the extent that the Group is unable to recover from others for any uninsured losses, such losses could result in a loss of capital and significant harm to its business. If any action, suit, or proceeding is brought against the Group and the Group is unable to pay a judgment rendered against it or defend itself against such action, suit, or proceeding, the Group's business, financial condition and operations could be negatively affected.
The Group conducts its business operations in a number of regions. The Group's business is therefore subject to diverse and constantly changing economic, regulatory, tax, social and political conditions.
Changes in the legislative, political, governmental and economic framework in the regions in which the Group carries on business could have a material impact on its business. In particular, changing laws and policies affecting trade, investment and changes in tax regulations could have a materially adverse effect on the Group's revenues, profitability, cash flows and financial condition.
Any new government regulations pertaining to the Group's business or solar parks may result in significant additional expenses. Moreover, as the Group enters new markets in different jurisdictions, it will face different regulatory regimes, business practices, governmental requirements and industry conditions.
To the extent that the Group's business operations are affected by unexpected and adverse economic, regulatory, social or political conditions in the jurisdictions in which the Group has operations, it may experience project disruptions, loss of assets and personnel, and other indirect losses that could adversely affect its business, financial condition and results of operations.
Geopolitical trends toward protectionism and nationalism and the dissolution or weakening of international trade pacts may increase the cost of, or otherwise interfere with, the Group's conduct of business. Uncertainty about current and future economic and political conditions that affect the Group, its customers and partners makes it difficult for the Group to forecast operating results and to make decisions about future investments.
The Group has adopted a business model under which it maintains significant operations and facilities through its subsidiaries located in Europe while its corporate management team and directors are primarily based in Ireland and the US. The nature of the Group's business may stretch its management resources as well as make it difficult for the Group's corporate management to effectively monitor local execution teams. The nature of the Group's operations and limited resources of its management may create risks and uncertainties when executing its strategy and conducting operations in multiple jurisdictions, which could affect the costs and results of operations of the Group.
The Group's business and operational activities are dispersed and subsidiaries within the Group trade in their functional currencies in the course of their business operations. The Group's investment holding companies transact
in functional currencies of their subsidiaries. The Group's investment holding companies may have foreign financing and investing activities, which exposes the Group to foreign currency risk. Any increased costs or reduced revenue as a result of foreign exchange rate fluctuations could adversely affect its profit margins.
Although the Group has access to a variety of financing solutions that are tailored to the geographic location of its projects and to local regulations, it has not entered into any hedging transactions to reduce the foreign exchange rate fluctuation risks, but may do so in the future when it is deemed appropriate to do so in light of the significance of such risks. However, if the Group decides to hedge its foreign exchange exposure in the future, it cannot be assured that the Group will be able to reduce its foreign currency risk exposure in an effective manner, at reasonable costs, or at all.
The Group believes that its substantial indebtedness will increase as an IPP. As of December 31, 2020, the Group had USD 26.0 million in outstanding short-term borrowings and USD 17.7 million in outstanding long-term bank borrowings. The Group is, and following the issuance of the Shares, will continue to be, highly leveraged.
The degree to which the Group remains or becomes leveraged following the issuance of the Shares could have important consequences to holders of Shares offered hereby, including, but not limited to:
If the Group incurs new debt or other obligations, the related risks the Group now faces, as described in this risk factor and elsewhere in these "Risk factors", could intensify.
The Group has a number of covenants related to its loans and other financial commitments that e.g. requires the Group to maintain certain financial ratios or impose certain restrictions on disposition of its assets or the conduct of its business.
These restrictions could affect the Group's ability to operate its business and may limit the ability to react to market conditions or take advantage of potential business opportunities as they arise. For example, such restrictions could adversely affect the Group's ability to finance its operations, make strategic acquisitions, investments or alliances, restructure its organization or finance its capital needs. Additionally, the Group's ability to comply with these covenants and restrictions may be affected by events beyond its control. These include prevailing economic,
financial and industry conditions. Failure to comply with financial and other covenants may potentially result in increased financial costs, requirement for additional security or cancellation of loans, which in turn may have a material adverse effect on the Group's results of operations, cash flow and financial condition.
Any default under the debt arrangements could lead to an event of default and acceleration under other debt instruments that contain cross default or cross acceleration provisions. If the creditors of the Group accelerate the payment of those amounts, investors cannot be assured that the Group's assets would be sufficient to repay in full those amounts, to satisfy all other liabilities which would be due and payable and to ensure that net assets will be available to the shareholders.
In addition, the Group typically pledges its solar park assets or account or trade receivables to raise debt financing, and it is restricted from creating additional security over its assets. If a company of the Group is in breach of one or more financial or other covenants or negative pledges clause under any of its loan agreements and are not able to obtain waivers from the lenders or prepay such loan, repayment of the indebtedness under the relevant loan agreement may be accelerated, which may in turn require the Group to repay the entire principal amount including interest accrued, if any, of certain of its other existing indebtedness prior to their maturity under cross-default provisions of other loan agreements. If the Group lacks sufficient financial resources to make required payments, the pledgees may auction or sell the assets or interest of the Group's solar parks to enforce their rights under the pledge contracts and loan agreements. Any of those events could have a material adverse effect on the Group's financial condition, results of operations and business prospects.
The Company intends to list the Shares on Euronext Growth Oslo, which is not a regulated market but a multilateral trading facility (a "MTF") owned and operated by the Oslo Stock Exchange. However, no assurances can be given as to the timing of such listing or whether the listing will ever take place, in which case there may be no formal trading market for the Shares. Even if the Shares were to be listed on Euronext Growth or any other MTF or a regulated market, a functional, active trading market may still not develop, in which case investors may find it challenging to exit the investment at acceptable prices or at all. Further, in such case, the pricing of the Shares may be arbitrary and subject to substantial movement in the short and medium term without no apparent underlying reason.
In case the Shares are traded on a MTF or a regulated market which does provide a functional and active trading platform, the trading price of the Shares could fluctuate significantly in response to a number of factors beyond the Company's control. Such factors include quarterly variations in operating results, adverse business developments, changes in financial estimates and investment recommendations or ratings by securities analysts, significant contracts, acquisitions or strategic relationships, publicity about the Company, its products and services or its competitors, lawsuits against the Company, unforeseen liabilities, changes to the regulatory environment in which it operates or general market conditions.
In recent years, the stock market has experienced extreme price and volume fluctuations. This volatility has had a significant impact on the market price of securities issued by many companies. Those changes may occur without regard to the operating performance of these companies. The price of the Shares may therefore fluctuate based upon factors that have little or nothing to do with the Company, and these fluctuations may materially affect the price of its Shares.
Each potential investor in the Shares must determine the suitability of that investment in light of its own
circumstances. In particular, each potential investor should: (i) have sufficient knowledge and experience to make a meaningful evaluation of the Shares, the Company and its business; (ii) have access to and knowledge of the appropriate analytical tools to evaluate an investment in the Shares; (iii) have sufficient financial resources and liquidity to bear the risks associated with investment in the Shares; (iv) understand the behaviour of the relevant financial markets; and (v) be able to evaluate possible scenarios for economic interest rate and other factors that may affect its investment.
Holders of Depositary Receipts do not hold Shares directly. The Company will not treat a holder of a Depositary Receipt as one of its shareholders, and a holder of Depositary Receipts will, as a starting point, not be able to exercise shareholder rights, except through the VPS Registrar (as defined below) as permitted by the Registrar Agreement (as defined below).
The Company has entered into a registrar agreement (the "Registrar Agreement") with DNB Bank ASA, DNB Markets Registrars department (the "VPS Registrar") to facilitate registration of the Depository Receipts in the VPS. In accordance with the Registrar Agreement, the VPS Registrar is registered as the legal owner of the Shares for which Depository Receipts are issued. Under the Registrar Agreement, the VPS Registrar registers the beneficial interests in the Shares in book-entry form in the VPS. Accordingly, it is not the Shares issued in accordance with Irish law that are registered in the VPS and may be traded on Euronext Growth, but the beneficial interests in the underlying Shares (i.e. the Depository Receipts).
In accordance with market practice in Norway and system requirements of the VPS, the beneficial interests in the relevant Shares will be registered in the VPS under the name of a "share". Although each "share" registered with the VPS will represent evidence of beneficial ownership of the Shares, such beneficial ownership will not necessarily be recognized by an Irish court. As such, investors may have no direct rights against the Company and may be required to obtain the cooperation of the VPS Registrar in order to assert claims against the Company. Also, investors investing in Depository Receipts have to look solely to the VPS Registrar for the payment of any dividends, for exercise of voting rights attaching to the underlying Shares and for other rights arising in respect of the underlying Shares. Exercising such shareholder rights through the VPS Registrar is subject to certain terms and conditions. The Company cannot guarantee that the VPS Registrar will be able to execute its obligations under the Registrar Agreement, including that the beneficial owners of the Shares will receive the notice of a general meeting of the Company's shareholders (a "General Meeting") in time to instruct the VPS Registrar to either effect a re-registration of their Depository Receipts or otherwise vote for their Shares in the manner desired by such beneficial owners. Any such failure may inter alia, limit the access for, delay or prevent, the beneficial shareholders being able to exercise the rights attaching to the underlying Shares.
The VPS Registrar may terminate the Registrar Agreement by not giving less than three months' prior written notice. Further, the VPS Registrar may terminate the Registrar Agreement if the Company does not perform its payment obligations to the VPS Registrar (and such non-payment has not been remedied by the Company within ten business days following receipt of notice regarding this from the VPS Registrar) or commit any other material breach of the Registrar Agreement. In the event the Registrar Agreement is terminated, the Company will use its reasonable best efforts to enter into a replacement agreement for purposes of permitting the uninterrupted registration of the relevant Shares in the VPS and the Admission of the Shares on Euronext Growth. There can be no assurance, however, that it would be possible to enter into such new agreements on substantially the same terms or at all. A termination of the Registrar Agreement could therefore have a material and adverse effect on the Company and its shareholders.
The Registrar Agreement limits the VPS Registrar's liability for any loss suffered by the Company. The VPS Registrar disclaims any liability for any loss attributable to circumstances beyond the VPS Registrar's control, including, but not limited to, errors committed by others. The VPS Registrar is liable for direct losses incurred as a
result of events within the VPS. Thus, the Company may not be able to recover its entire loss if the VPS Registrar does not perform its obligations under the Registrar Agreement.
The Registrar Agreement limits the VPS Registrar's liability for any loss suffered by the Company. The VPS Registrar disclaims any liability for any loss attributable to circumstances beyond the VPS Registrar's control, including, but not limited to, errors committed by others. The VPS Registrar is liable for direct losses incurred as a result of events within the VPS. Thus, the Company may not be able to recover its entire loss if the VPS Registrar does not perform its obligations under the Registrar Agreement.
The Shares will be denominated and any dividend will be payable in euro, and the Shares may listed in Norway on a regulated market or a multilateral trading facility where the trading price is quoted in NOK. If a Shareholder is a noneuro or non-NOK investor, an investment in the Shares will entail currency exchange related risks due to, among other factors, possible significant changes in the value of the euro and/or NOK to other relevant currencies because of economic, political or other factors over which the Company has no control. Depreciation of the euro against other relevant currencies could result in a loss to Shareholders when any payment from the Shares is translated into the currency by reference to which a Shareholder measure the return on its investments Government and monetary authorities may impose (as some have done in the past) exchange controls that could adversely affect an applicable exchange rate. As a result, investors may receive less interest or principal than expected, or no interest or principal at all.
There may be tax consequences for a Shareholder as a result of any foreign currency exchange gains or losses resulting from its investment in the Shares. A Shareholder should consult its tax advisor concerning the tax consequences to Shareholders of acquiring, holding and disposing of the Shares.
The investment activities of certain investors are subject to legal investment laws and regulations, or review or regulation by certain authorities. Each potential investor should consult its legal advisers to determine whether and to what extent (i) the Shares are legal investments for it, (ii) the Shares can be used as collateral for various types of borrowing and (iii) other restrictions apply to its purchase or pledge of the Shares. Financial institutions should consult their legal advisors or the appropriate regulators to determine the appropriate treatment of the Shares under any applicable risk-based capital or similar rules.
The Company may in the future see the need of additional equity investment in relation to financing capital intensive projects, or related to unanticipated expenses or liabilities. This may lead to a future need of additional issuance of shares in the Company. The Company cannot guarantee that the current shareholders ownership will not be diluted. For reasons relating to U.S. securities laws, and the laws in certain other jurisdictions, or other factors, U.S. investors, and investors in such other jurisdictions, may not be able to participate in a new issuance of shares or other securities and may face dilution as a result.
None of the Shares have been registered under the US Securities Act of 1933 (as amended) (the "US Securities Act") or any US state securities laws or any other jurisdiction outside of Norway and are not expected to be registered in the future. As such, the Shares may not be offered or sold except pursuant to an exemption from, or in
transactions not subject to, the registration requirements of the US Securities Act and other applicable securities laws. In addition, there can be no assurances that shareholders residing or domiciled in the United States will be able to participate in future capital increases or rights offerings.
The Company cannot predict what effect, if any, future sales of the Shares, or the availability of Shares for future sales, will have on their market prices. Sales of substantial amounts of the Shares following the date hereof, or the perception that such sales could occur, may adversely affect the market price of the Shares, making it more difficult for holders to sell their Shares in the future at a time and price that they deem appropriate.
The future payment of dividends on Shares will be dependent upon the financial requirements of the Company to finance future growth, the financial condition of the Company and other factors which the Board of Directors may consider appropriate in the circumstances. The Company may choose not, or may be unable, to pay dividends or make distributions in future years. The existing note payable contains restrictions which prevent the Company from declaring or paying dividends.
Furthermore, the amount of dividends paid by the Company, if any, for a given financial period, will depend on, among other things, the Company's future operating results, cash flows, financial condition and capital requirements, the ability of the Company's subsidiary to pay dividends to the Company, credit terms, general economic conditions, legal restrictions and other factors that the Company may deem to be significant from time to time.
The rights of shareholders of the Company are governed by Irish law and by the Company's Constitution (the "Constitution"). These rights may differ from the rights of shareholders in companies incorporated in other jurisdictions. In particular, Irish law limits the circumstances under which shareholders of Irish companies may bring derivative actions. The bringing of a derivative action is tightly controlled by the rules of the Irish courts and leave of the Irish court is required.
A p p e n d i x 60
| ITALY | IRELAND | |
|---|---|---|
| 274 MWp Backlog 311 MWp Pipeline |
70 MWp 113 |
Backlog |
| GERMANY | 287 MWp Under Contract GREECE |
|
| 4 MWp Backlog 170 MWp Pipeline |
113 MWp Pipeline 417 MWp |
Backlog |
| NETHERLANDS | POLAND | |
| 255 MWp Backlog 250 MWp Pipeline |
181 MWp 160 MWp |
Backlog Pipeline |
| ROMANIA | SPAIN | |
| 275 MWp |
Backlog |
| OWNED (operational) |
OWNED (D&C) |
CONTRACTED | ||
|---|---|---|---|---|
| Total Projects Capacity | 10.5 MWp | 20 MWp | 254 MWp | |
| Estimated Annual Production | 13.2 GWp | 31.2 GWp | 387 GWp | |
| Estimated Annual Revenues | €3.1M | €1.3M | €21.5M | |
| PORTFOLIO | Estimated Annual EBITDA | €2.8M | €1.1M | €16.9M |
| OVERVIEW | Average Yield (kWh/kWp) | 1200 | 1560 | 1400 |
| Co2 – eq Avoidance p/a |
9.3 Kt | 22 Kt | 272 Kt |
| Long-term average of daily/yearly sum, period 1994-2018 | |||||||
|---|---|---|---|---|---|---|---|
| Daily sum: | & 2.6 | 3.0 | 3.4 | 3.8 | 4.2 | $4.6 \rightarrow$ | |
| kWh/kWp | |||||||
| Yearly sum: | 949 | 1095 | 1241 | 1387 | 1534 | 1680 > |
| OWNED (operational) |
OWNED (DNC) |
||
|---|---|---|---|
| Total Projects Capacity | 11.75 MWp | 255 MWp | |
| Estimated Annual Production | 12.5 GWp | 252 GWp | |
| Estimated Annual Revenues | €1.3M | €17.6M | |
| Estimated Annual EBITDA | €1M | €12.4M | |
| PORTFOLIO PORTFOLIO |
Average Yield (kWh/kWp) | 1050 | 990 |
| OVERVIEW | Co2 – eq Avoidance p/a |
9 Kt | 180 Kt |
| OWNED | |||||||
|---|---|---|---|---|---|---|---|
| Total Projects Capacity | 41.5 MWp | ||||||
| Estimated Annual Production | 54 GWp | ||||||
| Estimated Annual Revenues | €11.9M | ||||||
| Estimated Annual EBITDA | €11M | ||||||
| PORTFOLIO PORTFOLIO |
Average Yield | 1300 kWh/kWp | |||||
| OVERVIEW OVERVIEW |
Co2 – eq Avoidance p/a |
59 Kt |
| Long-term average of daily/yearly sum, period 1994-2018 | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Daily sum: | & 2.6 | 3.0 | 3.4 | 3.8 | 4.2 | $4.6 \rightarrow$ | ||||||
| kWh/kWp | ||||||||||||
| Yearly sum: | & 949 | 1095 | 1241 | 1387 | 1534 | 1680 > |
| CONTRACTED | |
|---|---|
| Total Projects Capacity | 181 MWp |
| Estimated Annual Production | 181 GWp |
| Estimated Annual Revenues | €12M |
| Estimated Annual EBITDA | €9.1M |
| Average Yield | 1000 kWh/kWp |
| Co2 – eq Avoidance p/a |
214 Kt |
| Long-term average of daily/yearly sum, period 1994-2018 | ||||
|---|---|---|---|---|
| Daily sum: | - 2.6 | 2.8 | 3.0 | 3.2 |
| kWh/kWp | ||||
| Yearly sum: | & 949 | 1022 | 1095 | 1168 |
PORTFOLIO OVERVIEW
PORTFOLIO OVERVIEW
term PPAs
| CONTRACTED |
|---|
| 417 MWp |
| 625 GWp |
| €26.6M |
| €21.3M |
| 1500 kWh/kWp |
| 730 Kt |
Contracted
| Long-term average of daily/yearly sum, period 1994-2018 | ||||||||
|---|---|---|---|---|---|---|---|---|
| Daily sum: | 3.6 | 3.8 | 4.0 | 4.2 | 4.4 | 4.6 | 4.8 | |
| kWh/kWp | ||||||||
| Yearly sum: | 1314 | 1387 | 1461 | 1534 | 1607 | 1680 | 1753 |
PPAs
| OWNED | |
|---|---|
| Total Projects Capacity | 5.2 MWp |
| Estimated Annual Production | 5 GWp |
| Estimated Annual Revenues | €0.5M |
| Estimated Annual EBITDA | €0.4M |
| Average Yield | 950 KWp |
| Co2 – eq Avoidance p/a |
3.5 Kt |
| Long-term average of daily/yearly sum, period 1994-2018 | ||||||
|---|---|---|---|---|---|---|
| Daily sum: | & 2.6 | 2.8 | 3.0 | 3.2 | 34 | |
| kWh/kWp | ||||||
| Yearly sum: | & 949 | 1022 | 1095 | 1168 | 1241 > |
PORTFOLIO OVERVIEW
PORTFOLIO OVERVIEW
| CONTRACTED | |
|---|---|
| Total Projects Capacity | 275 MWp |
| Estimated Annual Production | 624 GWp |
| Estimated Annual Revenues | €25M |
| Estimated Annual EBITDA | €19.3M |
| Average Yield | 2270 kWh/kWp |
| Co2 – eq Avoidance p/a |
400 Kt |
PORTFOLIO OVERVIEW
PORTFOLIO OVERVIEW
| CONTRACTED | ||
|---|---|---|
| Total Projects Capacity | 70 MWp | |
| Estimated Annual Production | 65.1 GWp | |
| Estimated Annual Revenues | €4.6M | |
| Estimated Annual EBITDA | €3.3M | |
| PORTFOLIO PORTFOLIO OVERVIEW OVERVIEW |
Average Yield | 930 kWh/Kwp |
| Co2 – eq Avoidance p/a |
57 Kt |
| SPV | # of PV assets |
Country | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 | 2033 | 2034 | 2035 | → |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Power Clouds | 1 | Romania | |||||||||||||||||||||||||||
| Fran Energy | 1 | Romania | |||||||||||||||||||||||||||
| Sant's Angelo | 1 | Italy | |||||||||||||||||||||||||||
| PC-italia 02 | 3 | Italy | |||||||||||||||||||||||||||
| CIC RT Treviso | 1 | Italy | |||||||||||||||||||||||||||
| CTS Power 2 | 2 | Italy | |||||||||||||||||||||||||||
| CIC Rooftop 2 | 1 | Italy | |||||||||||||||||||||||||||
| SPV White One | 1 | Italy | |||||||||||||||||||||||||||
| PSM40 UG & CoKG | 2 | Germany | |||||||||||||||||||||||||||
| PSM40 UG & CoKG | 3 | Germany | |||||||||||||||||||||||||||
| GRT 1.1 | 1 | Germany | |||||||||||||||||||||||||||
| ALTN HoldCo | 4 | Germany | |||||||||||||||||||||||||||
| Rilland | 1 | Netherlands | |||||||||||||||||||||||||||
| EB Holdings Projects | 4 | Italy | |||||||||||||||||||||||||||
| Serre | 1 | Italy | |||||||||||||||||||||||||||
| RS Lucas/Ecosfer | 2 | Romania | |||||||||||||||||||||||||||
| Green Source | 1 | Romania | |||||||||||||||||||||||||||
| Polish Project 1) |
1 | Poland | |||||||||||||||||||||||||||
| New Power Italy 1) |
2 | Italy | |||||||||||||||||||||||||||
| Development | Construction | Operational under PPA/FiT | Merchant | Time of Alternus acquisition |
1) Projects fully financed with closing subject to completion of satisfactory DD review
| Rank | Beneficial Ownership | Country | Holding | Stake |
|---|---|---|---|---|
| 1 | Browne, Vincent1 | Ireland | 4,318,9544 | 18.2% |
| 2 | Goldman Sachs & Co. LLC2 | United States | 2,932,238 | 12.4% |
| 3 | Skandinaviska Enskilda Banken AB2 |
Luxembourg | 1,172,230 | 5.0% |
| 4 | TELENERGIA EUROPE S.R.L. | Italy | 1,152,108 | 4.9% |
| 5 | Skandinaviska Enskilda Banken AB2 |
Sweden | 1,150,000 | 4.9% |
| 6 | SPESIALFONDET KLP ALFA GLOBAL ENER | Norway | 1,000,000 | 4.2% |
| 7 | State Street Bank and Trust Comp2 | United States | 964,867 | 4.1% |
| 8 | ROSENFONN INVEST AS | Norway | 798,762 | 3.4% |
| 9 | GAIA ENERGY S.R.L. | Italy | 600,000 | 2.5% |
| 10 | Duey, Joe (Management) | United States | 582,900 | 2.5% |
| 11 | State Street Bank and Trust Comp2 | United States | 549,012 | 2.3% |
| 12 | Morgan Stanley & Co. LLC | United States | 544,925 | 2.3% |
| 13 | MATSER | The Netherlands | 478,962 | 2.0% |
| 14 | Durant, Tali ( Management) |
United States | 459,000 | 1.9% |
| 15 | T.D. VEEN AS | Norway | 400,000 | 1.7% |
| Total Ownership of Top 15 Shareholders | 17,103,958 | 72.2% | ||
| Other Shareholders | 6,578,318 | 27.8% | ||
| Total | 23,682,276 | 100.0% |
Notes: 1) Through various holdings; 2). Nominee accounts; 3) EURNOK exchange rate of 10.11; 4) Includes 70,920 shares to be converted on listing.
▪ The Board of Directors have implemented a management long-term incentive program that has reserved and will allow for the issuance of up 2,500,000 shares under a formalized share incentive plan. The incentive plan will be structured in the most tax efficient manner for participants and may require the creation of a different share class specifically and only for such incentive shares. The total shares issuable under the Incentive Plan represent approximately 8% of the current fully diluted shares.
| Book value equity in Company through vending in 2 solar PV assets in Romania – (now owned by Vincent Browne). Capital injection equivalent to: 1) EUR 5.7m 2015 |
originally funded through debt funding activities of PCH |
EUR 125k of convertible notes issued to Vincent Browne with a strike price of EUR 2.82 – listing Capital injection equivalent to: EUR 125k 2018 |
will convert into 70,920 common shares in the Company upon |
EUR 212k of convertible notes with a strike price of EUR 2.82 per share – will convert into 75,000 shares in the Company upon listing Capital injection equivalent to: EUR 212k 2020 |
Total equity capital raised |
||
|---|---|---|---|---|---|---|---|
| 2017 Acquisition of solar PV assets worth EUR 2m – the issuance of shares in the Company Capital injection equivalent to: 1) EUR 763k |
payments of parks through | 2019 EUR 424k of convertible notes with a strike price of EUR 2.82 – into 150,000 shares in the Company upon listing Capital injection equivalent to: EUR 424k |
will convert | 2021 EUR 27m in equity through the issuance of 13,636,364 shares at issue price share Capital injection equivalent to: EUR 27m |
common of EUR 1.98 per |
EUR 34.2m |
1) Vend-in of parks in 2015 and 2017 where fully audited back to the original cash payments for the parks as part of Alternus' US audit process Note: Funds initially raised in USD, converted to EUR based on USD/EUR exchange rate of 1.18
Unit 11, Plaza 212, Blanchardstown Corporate Park 2, Dublin, D15 PK64, Ireland
WEBSITE www.AlternusEnergy.com
EXECUTIVE MANAGEMENT Vincent Browne (Irish) – CEO Joseph Duey (US) – CFO Tali Durant (US) – General Counsel Gary Swan (Irish) – CTO
BOARD OF DIRECTORS Vincent Browne (Irish) – Chairman and CEO John Thomas (US) – Non-Executive Director John McQuillan (Irish) - Non-Executive Director Rolf Wikborg (Nor) – Non-Executive Director
PUBLIC LISTING NOTC: ALT
Altergy Group nus Enerplc
2020 Year End Financial Report
March 1st 2021
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