Coigach Community Cic Bond Offer March 2018
Total Page:16
File Type:pdf, Size:1020Kb
COIGACH COMMUNITY CIC BOND OFFER MARCH 2018 PROMOTED BY 1 the wind of change for Coigach Important Notice This financial promotion has been issued and approved by the UK division of Triodos Bank NV for the purposes of section 21 of the Financial Services and Markets Act 2000. Triodos Bank NV is incorporated under the laws of the Netherlands with limited liability under number: 62415 and whose branch is registered in England and Wales with number: BR3012. Triodos Bank is authorised by De Nederlandsche Bank (the “Dutch Central Bank”), Postbus 98, 1000 AB Amsterdam, Westeinde 1, and is also subject to limited regulation by the Financial Conduct Authority (the “FCA”) and the Prudential Regulation Authority (the “PRA”), 25 The North Colonnade, Canary Wharf, London, E14 5HS, in relation to the conduct of its UK business. Triodos Bank’s FCA registration number is: 183366, and may be checked on the FCA’s website at: www.fca.org. uk/register or by contacting the FCA on: 0845 606 1234. Our UK registered office address is at: Deanery Road, Bristol, BS1 5AS. Further details about the extent of our regulation by the Financial Conduct Authority and the Prudential Regulation Authority are available from us on request. If you are in any doubt about the contents of this document or the action you should take, you should immediately consult a person authorised for the purposes of the Financial Services and Markets Act 2000 (as amended) who specialises in advising on the acquisition of shares and other securities. This document does not constitute a prospectus as defined by the Prospectus Regulations 2005 (the “Regulations”), and has not been prepared in accordance with the requirements of the Regulations. To the best of the knowledge and belief of the Directors of Coigach Community CIC (who have taken all reasonable care to ensure that such is the case), the information contained in this document is in accordance with the facts and does not omit anything likely to affect the import of such information. The Directors, whose names appear in section 2, accept responsibility accordingly. Community sustainability in a world2 class environment… Coigach Community CIC Coigach Community CIC (the “Company”) is a company limited by shares and a community interest company, registered in England with registered office at c/o Pannone Corporate LLP, 378-380 Deansgate, Manchester M3 4LY (registered number 09638437) with head office at Coigach Community Hall, Ullapool IV26 2YR, Scotland. Offer for subscription An offer of up to1,750,000 Bonds each with a nominal value of £1 in the Company Promoted by This document is only available to, and Bonds may only be issued to, persons resident in the United Kingdom. The distribution of this document in jurisdictions other than the United Kingdom may be restricted by law and therefore persons into whose possession this document comes should inform themselves about, and observe, any of those restrictions. Any failure to comply with any of these restrictions may constitute a violation of the securities laws of any such jurisdiction. 3 the wind of change for Coigach Contents 1. Executive summary 5 2. Directors and advisers 9 3. Coigach Community CIC 10 4. Governance and Directors 14 5. Financial information 16 6. Risks 18 APPENDIX 1: Definitions and terms 21 APPENDIX 2: General information 22 APPENDIX 3: Taxation 24 APPENDIX 4: Bond Instrument 26 Community members celebrating the erection of the 50m wind monitoring mast at the turbine site in 2011 to collect wind data for the project. 4 1. Executive summary Wind is a clean, free and readily available source of energy. The UK is the windiest country in Europe and wind energy is therefore a vital source of sustainable energy in the UK. Onshore wind is now the UK’s largest source of renewable energy generation. There is currently around 12,500 MW of installed capacity in the UK which equates to around a third of total installed renewable energy capacity.1 An increasing number of renewable energy projects in the UK are being financed and run as community enterprises. This enables the profits generated from them to benefit the local community and gives people the opportunity to take ownership of these projects in their community. This trend has been particularly prevalent in Scotland – there are around 530 community owned projects in Scotland with a combined capacity of 81 MW.2 Coigach Community CIC COIGACH Coigach Community CIC is a community interest company which owns and operates a community wind turbine in Coigach, a remote peninsula in the Northwest Highlands of Scotland. Coigach Community CIC is wholly owned Inverness by local charity, Coigach Community Development Company. Aberdeen Fort William REIFF Glasgow ACHNAHAIRD Edinburgh ALTANDHU LOCH OSCAIG INVERPOLLY NATURE RESERVE POLBAIN DORNIE LOCH STAC POLLAIDH BADAGYLE ACHILTIBUIE CUL BEAG POLGLASS BADENSCALLIE SUMMER ISLES CONA MHEALL BEIN BEN MÒR COIGACH AN EOIN NATURE RESERVE BEN MÒR COIGACH A835 Coigach has a declining population currently of around 260. The community faces a number of challenges common to remote communities including a lack of affordable housing, decreasing levels of health provision, lack of access to basic amenities, poor transport links and a fragile economy which is over-reliant on the traditional industries of crofting and fisheries. The Coigach wind turbine was developed to create a regular income to support the community through a variety of projects which tackle these challenges. The 500 kW turbine was constructed in early 2017 and started generating electricity in March 2017. It is performing in line with expectations 1 Department for Business, Energy and is expected to generate around 2,020 MWh each year. and Industrial Strategy (BEIS), Renewable electricity capacity and generation, December 2017. The Directors wish to raise £1.75 million through this Bond Offer to refinance existing high cost loans which were taken out to finance the construction of 2 Energy Saving Trust. Community and locally owned renewable the turbine. This will enable Coigach Community CIC to contribute around energy in Scotland at June 2017. £4.4 million to community projects over 20 years. 5 the wind of change for Coigach The 2018 Coigach Community CIC Bond Offer Issuer: Coigach Community CIC Amount: £1,750,000 Term: 12 years, final repayment on 31 March 2030 Minimum investment: £250 Interest: 5% gross per year, increasing in line with the annual retail price index each year from April 2019. Payable on 31 March each year (net of UK basic rate tax unless held in a Triodos Innovative Finance ISA when interest will be paid gross). Investors should note that payment of interest and repayment of capital are not guaranteed and are dependent on the continued success of Coigach Community CIC’s business model. Repayment: The Bonds are expected to be repaid in ten annual instalments from 2021 to 2030. In the event of death of a Bondholder or in other exceptional circumstances, Bonds may be repaid early at the Company’s discretion subject to sufficient cash being available. Social Impact: An estimated £4.4 million will be donated to Coigach Community Development Company – a local charity – over 20 years to support a range of community projects in Coigach. ISA and SIPP: The Bonds are eligible to be held in a Triodos Bank Innovative Finance ISA and can be held in a self-invested personal pension (SIPP). Security: Secured by way of a standard security over the tenant’s interest in the lease of the turbine site and a debenture (including a floating charge) over all of the assets of the Company. An independent Security Trustee will be appointed to represent the Bondholders’ security interest. Covenants: A negative pledge regarding other borrowings until the Bonds are repaid in full. This prevents the Company from taking on additional debt. Reporting: Bondholders will receive Coigach Community CIC’s annual report which will contain progress updates on the turbine and the community projects being supported, and will be invited to the Company’s annual AGM. Transferable: Bonds are transferable but are not listed on any investment exchange which means that Bondholders will have to find a willing buyer and agree a purchase price with them. Investors should be prepared to hold the Bonds for their full 12-year term. Aggregate minimum The aggregate minimum raise for the Offer is £1,450,000. If less than £1,450,000 is raised, raise: then investors’ monies will be returned with no accrued interest. Timetable: The Offer opens on 1 March 2018 and closes at noon on 30 April 2018, unless the £1,750,000 target has been reached earlier or the Offer is extended by the Directors at their sole discretion. Full details of all terms and conditions of the Bonds are included in the Bond Instrument which is in Appendix 4. 6 Example of Bondholder returns The table below demonstrates the projected interest and capital repayments based on a £5,000 investment in the Bond Offer. 1000 900 800 Interest Payments* 700 Capital repayments 600 £ 500 *These interest payments 400 are estimated based on the 300 assumption that RPI is 2.5% 200 each year for the 12 year term 100 0 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 The total projected interest payable over the 12 year term based on this example is £2,384. Please note that the payment of interest and capital are not guaranteed and are dependent on the continued successful operation of the wind turbine. Triodos Bank Innovative Finance ISA (‘IFISA’) Coigach Community CIC’s Bonds are eligible to be held in a Triodos Bank IFISA, which means Bond interest payments will be received tax-free. The IFISA was introduced on 6 April 2016 and crowdfunded debt securities – such as these Bonds – are eligible for inclusion.