Enefit Green, renewable energy subsidiary of Estonia’s state-owned power generating group Eesti Energia, on Tuesday published the prospectus of the initial public offering (IPO), listing and admission to trading of new shares, according to which the base deal size of the offering is up to 115 million euros, which may be increased to 175 million euros.
Trading in the shares is expected to start on Nasdaq Tallinn Stock Exchange on or about Oct. 21, 2021, Enefit announced on Tuesday.
In the base case, Enefit Green aims to raise 100 million euros through the issuance of new ordinary shares and its sole shareholder, Eesti Energia, aims to raise up to 15 million euros through the sale of existing ordinary shares, for a total base deal size of 115 million euros. In the base case, up to 17.3 percent of all the shares in the company will be offered.
Depending on market conditions, the number of the secondary shares to be sold in the offering may be upsized by up to 60 million euros, resulting in an upsized deal of up to 175 million euros and corresponding to up to 26.4 percent of all the shares in the company.
The offering consists of an offering to retail investors in Estonia, as well as retail investors in Latvia and Lithuania, and an offering to institutional investors in and outside of Estonia.
Enefit Green plans to use net proceeds of the offering to finance its own and its consolidated subsidiaries’ development projects and potential new projects in order to support the group’s growth and development strategy. In particular, the company plans to use the net proceeds of the offering for the purposes of developing the wind and solar parks in the group’s near-term pipeline of up to 600 megawatts.
Aavo Karmas, CEO of Enefit Green, said the money will be used to implement the company’s growth strategy and increase its renewable energy production capacity to 2.3 times the current capacity, or 1,100 megawatts, by 2025.
“In order to achieve this goal, Enefit Green will need up to 600 million euros in investments between 2021 and 2023, for which we will use the money raised in the share offering as well as other financing options, such as bank loans,” Karmas explained.
The offer price range for the offer shares is 2.45 to 3.15 euros. Subscriptions in the retail offering must be submitted for the price equal to the upper end of the offer price range, meaning 3.15 euros per offer share. The final offer price will be determined through a book-building process and will be the same for all investors in the retail offering and the institutional offering.
The company expects to announce the final offer price by means of a stock exchange release on or about Oct. 15, 2021 together with publishing the results of the offering.
Estonian retail investors wishing to subscribe for the offer shares should contact Swedbank AS or LHV Pank AS or any other custodian operating such investor’s securities account at the Estonian Register of Securities and submit a subscription undertaking during the offer period for subscription of the shares in accordance with the terms of the offering.
Latvian and Lithuanian retail investors wishing to subscribe for the shares should contact the financial institution which is a member of Nasdaq Tallinn Stock Exchange and that operates such investor’s securities account and submit a subscription undertaking within the offer period for the purchase of offer shares in the form accepted by the financial institution and in accordance with the terms of the offering.
In order to apply for offer shares in the institutional offering, an investor should contact Citigroup Global Markets Europe AG, Nordea Bank Abp or Swedbank AS.
Mihkel Torim, head of Baltic and Finnish investment banking at Swedbank, said that the bank expects a very strong interest in the offering, taking into account the profile of Enefit Green and the volume of the IPO.
Enefit Green is a renewable energy subsidiary of the Eesti Energia group, which currently owns a total of 22, 38 solar power plants, four cogeneration plants, a pellet plant and a hydroelectric power plant in four markets — Estonia, Latvia, Lithuania and Poland.
The company produced a total of 1.35 terawatt-hours of electricity in 2020. Enefit Green’s revenue totaled 162.7 million euros last year and EBITDA 110.2 million euros.