Renewable company, based in Sydney and New York,New Energy Solar is aiming for ASX debut with $200-300 million in capital for exploring opportunities into US solar farms and fast-growing home market. With an anticipated demand in the relevant area, New Energy Solar’s prospectus for its initial public offering seeks to raise at least $200 million from new investors. Particularly, about 66.7 million to 200 million new stapled securities at an indicative price range of $1.45 to $1.55, are being offered to raise $100-300 million.Following completion of the offer, about 258.3 million to 391.6 million stapled securities are said to be on issue. The proceeds of the Offer are said to be used for funding current acquisitions and future opportunities to grow New Energy Solar.

The offer includes a retail offer having a broker firm offer, a priority offer, and a general public offer and an Institutional Offer. The Retail Offer is scheduled to open on 10 November 2017 and is expected to close on 27 November 2017.

Good Dividend Yield: The group is expected to have a market capitalisation in the range of $387.4 million to $587.4 million with net asset backing of $1.46 per security, and distributions of 4 cents per unit this year and 7.75 cents next year. Further, the stock is expected to have a yield of about 5% to 5.3%.

Portfolio Statistics (Source: Company Reports)
 
Enhancement of portfolio: The group has a portfolio of utility scale solar plants in North Carolina and Oregon for generating a combined total of 130 megawatts under long-term power purchase agreements with Duke Energy and Pacificorp.New Energy Solar already has four operating solar plants and is aiming to acquire fourteen more plants in line with its energy transformation goals. The group’s total portfolio is expected to be lifted to 345MW with power off take agreements with a longer weighted average term of 16.4 yearsagainst Australia under the federal Renewable Energy Target.New Energy Solar intends to acquire assets that are expected to support gross portfolio returns of 7% to 10% per annum.

The group seems to proffer an opportunity to investors for foraying into a low costand zero-emissions solar zone (alternative to fossil fuel). Prospects from electric vehicles are also expected to drive demand.While the IPO is worth keeping an eye on, risks on investments in areas other than solar energy, investment tax credit risk and risks owing to changes in wholesale electricity prices do prevail.

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