(This blog has also been distributed via email).
Dear 12J Investors,
In this issue of the newsletter, we detail the following:
- We have declared the 2023 dividends and will start paying dividends from Monday 14 August 2023.
- Also included in your dividends pack is a suggested Shareholders Resolution to simplify the future sale of shares.
- Great News. We have signed a PPA for 5MW. This will double our current asset base in a single transaction and is a major win for the fund. We won't do it alone and have secured strategic partners, but Futureneers Energy will be the lead partner on this exciting project.
DIVIDENDS
The fund as a whole achieved an effective pre-tax and management fees return for the year of 9.19%. We capped our management fees at 1.25%, and after corporate taxes, we declared the following dividends to shareholders for the period 1 July 2022 to 30 June 2023:
- 7% to our class 88 shareholders; and
- 6% to our class 89 and 90 shareholders.
The above 9.19% yield exceeds original targets set for the class 89 and 90 shareholders (the loan shareholders had a more conservative original roll-out schedule), but falls slightly short of our original year 2 target of 10% for the class 88 cash shareholders.
Although we can always do better, we are proud to have achieved these results in a very tough year, which included significant load-shedding (which in certain months meant a drop of 30% in turnover of grid-tied systems) and regular non-load-shedding power outages in Ekurhuleni where we operate.
LEARNINGS
Finding the right projects for capital deployment was challenging this year. The more sizeable C&I projects took time and were very competitive. However, our strategy of securing key partnerships is bearing fruit, promising a consistent project pipeline.
BIG NEWS
Futureneers Energy has locked in a 5 MegaWatt Power Purchase Agreement with a notable gold processing plant. Financial close is nearing, and construction is set to start within 8 weeks. This R80 million plus project is our largest to date and will be funded through strategic partnerships and contributions from the off-taker. A portion will also be financed via a 12B fund. More details on the 12B opportunities are presented lower down in the newsletter.
The processing plant does not get load-shedded, but use of electricity is curtailed at peak times. The solar system has however been sized and designed not to be impacted by the electricity curtailments. We are also looking at opportunities to use the site to connect to the Eskom grid and offer wheeling solutions.
SIMPLIFYING FUTURE SALE OF SHARES
As part of your dividends packs we request shareholders to review and sign a Shareholders Resolution where we propose a tweak in our MOI and Share Subscription Agreements to make selling shares simpler. Currently, shares must first be offered to our management company, then to other shareholders, and finally externally.
The proposed change would make it easier, allowing any shareholder to sell their shares to the best offer, be it from the management company, existing shareholders, or external parties. Do review this in your dividends pack and let me know if you have any questions.
SECTION 12B OPPORTUNITY
We've been considering launching our own 12B Fund, and it's happening soon. It's designed to complement our existing 12J company. As mentioned, our gold processing project is the maiden venture, and although phase 1 funding is secured, a limited R8 million will be made available for interested investors as a 12B opportunity. Priority will be given to existing 12J shareholders. Drop us a line if you're interested
SHAREHOLDERS MEETING AND BETTER COMMUNICATION
We really want to improve in this area, and from October onwards, we will schedule regular shareholder zoom sessions, to provide project feedback and answer any questions. The first session is scheduled for 25 October at 18:00. Please diarise. This zoom session will also serve as a shareholders meeting similar to an AGM and we aim to also present and approve financial statements for the year ended 30 August 2023 at the meeting.
FINAL REMARKS
As always, we appreciate your ongoing support and trust in our solar and energy fund. If you have any questions or concerns, please don't hesitate to reach out to us.
Just another reminder - those shareholders wishing to take advantage of the first R8m available in the 12B Fund, please drop me an email or WhatsApp message.
Kin regards,
Jaco Gerber and the 12J (soon 12B as well) Solar Team