By Durrant Pate
Regional renewable energy company, MPC Caribbean Clean Energy has just clinched a US$10-million financing deal with an unnamed investor.
The company, which is listed on both the Jamaica Stock Exchange (JSE) as well as the Trinidad and Tobago Stock Exchange (TTSE) will issue a non-voting convertible promissory note in the amount of US$10-million to the accredited investor.
This investor is mandated to raise capital to be invested in MPC Caribbean Clean Energy Fund, the investment arm of the company. The US$10-million promissory note is to be issued and dated as of today (November 6).
In a regulatory filing with the JSE, MPC Caribbean Clean Energy, which is registered in Barbados, reports that the promissory note is to be distributed today or such later date that is approved for registration by the TTSE. The funds raised from the promissory note are to be used for capital expansion and renewable investment opportunities given MPC Caribbean Clean Energy’s primary mandate.
The primary mandate of the company is investing into significant growth potential in renewable energy projects in the Caribbean region, where these energy sources are increasingly becoming an economical form of new electricity generation.
DETAILS OF REGULATORY FILING
In its JSE regulatory filing, MPC Caribbean Clean Energy Director, José Fernando Zuñiga Galindo states that, “the note will entitle the holder to receive (from time to time) distributions equivalent to the dividends approved by the directors of the company to be paid from time to time to holders of Class B shares with each US$1 of the principal of the Note corresponding to one Class B share”. This will be limited to a maximum of eight per cent per annum in aggregate in any one year.
If the principal sum of the note has not been paid in cash upon the maturity date of March 31, 2023, the note will convert into Class B shares in the company. However, this will be subjected to the prior approval of such conversion at a shareholders’ meeting of the Caribbean renewable energy company.
The note is unsecured but senior to Class B shares in the event of liquidation or bankruptcy.
Earlier this year, MPC Caribbean Clean Energy invested some US$9.29 million in its investment arm, MPC Caribbean Clean Energy Fund LLC, which is domiciled in the Cayman Islands. MPC Caribbean Clean Energy Fund focuses primarily on solar PV and wind projects, which are expected to account for between 80 per cent to 100 per cent of overall investment.
The investment company was incorporated in 2017.
MODEST SECOND QUARTER PROFIT
In its last quarterly report for the period ended June 30, 2020, MPC Caribbean Clean Energy recorded Earnings Before Interest, Taxes, and Amortization (EBITA) of US$698,000. EBITA is a measure of a company’s profitability used by investors.
The second quarter results showed that MPC Caribbean Clean Energy had a weighted Average Availability 99.61 per cent with an energy output variation -7.07 per cent. During the first half of the year, the Barbados domiciled energy company demonstrated strong operational resilience particularly in light of the challenging environment presented by the COVID-19 pandemic.
Since then MPC Caribbean Clean Energy has been focusing on finalising compliance clearance and admittance of the additional capital raised into the MPC Caribbean Clean Energy Fund LLC and ensuring that the operations of the company and the investment results of the fund are in line with expectations.
MPC Caribbean Clean Energy was established in 2017 with the clear vision to enable private and institutional investors from Jamaica and Trinidad and Tobago to invest through the company into one of the few investment funds, which invests in renewable energy projects in Jamaica, Trinidad and Tobago and the wider Caribbean region.