Complex PV Projects Share Offers
Overview 3 Parts: • Share Offer Document • Publicity • Managing Share Issue Bulk of work is in preparation, but expect to have to keep up the publicity drive throughout the share offer period (unless all the funds come in in early stages)
Document • ‘Prospectus’ implies FSA regulation, which is only legal requirement for 2.5m Euro equity projects. Extra cost is £100k+ for FSA lawyers and accountants and yours to review • ‘Share offer document’ more suitable term • FSA still regulate, but not an ‘FSA approved prospectus’ • Set out what investment will be in, what benefits (£, CO2, community benefits) and what the risks are • Distinguish this from other marketing material – this is what you are promising to your members and will be held accountable to. • Evidence that figures are thorough – summary sufficient
Document • Supporting information (non commercially sensitive) Prepare in advance and have on website, or to send out to people, as you prefer. Provides evidence for people to check that you do have the correct consents etc in place. Could include: • Planning permissions • Co-op Rules • Warranties & performance guarantees • Insurance policy • Rates exemption • FAQs – embodied energy etc
Document • Commercially sensitive information • Contract with installers • Lease or other legal agreements Up to you whether you make this information available, but will need permission of those you are in contract with. Most people would not expect to see this. Sufficient to describe what you have in place and key clauses in your risk section – whether as risks or how you have mitigated the risks.
Document • Style and format • Review others before starting eg Wey Valley Solar, Warwickshire, Leominster, Ovesco • Formal vs informal style: Important that people perhaps not used to investing find it an accessible document • However, do differentiate from publicity material that will be very positive. Don’t be tempted to skate over any risks, as this could lead to accusations later you were misleading.
Document • Process • Decide length of share issue (2-3 months should be fine, possible to do it in 6 weeks in emergency, but weigh up the risks • Encourage as much to be done online/by email as possible to keep your costs low but allow for non-computer literate – as very often have the cash to invest • Give yourself some flexibility to extend if necessary, but don’t be unclear or leave it too open ended. Rolling share issues not generally applicable as you usually need to pay the installers bulk shortly after installation • £20,000 is legal limit for Co-operatives, but £250 minimum is flexible – but take into account costs of admin over 25 years for each member. • Clear form to fill out with all the information you need for records
Publicity • Proportionate to fund target • Launch event & keeping in the media eye • Personal contacts (pledges) – value of long lead in and warm up • Costs low potentially – but needs to be well targeted and may be time intensive • What do you know of audience? What media contacts do you have? How can you make it more media attractive, with no panels on the roof at the stage you need the publicity? • How to reach beyond small circle?
Publicity • Press releases • Radio, TV, printed press, internet • Photos – including people • Media interest during process • Launch event – location, timing, format, invites • Website • Email networks – your organisation, others locally with compatible aims? Host building’s network (if applicable)
Practicalities • Costs of printing & sending out hard copy • Someone on hand to do this throughout share offer period. Registered address? Suitable email address and phone number. • Who will man phones? • Who is able to answer questions on tax, death, risks, child nominees, Co-op Rules (FAQs) • This is start of admin for 25 years, so set it up in manageable way – electronic is cheaper, but may not be possible yet to be fully electronic?
Conclusion • Preparation, preparation, preparation! • Best way to swot up – look at what others have done (but also think about how successful they’ve been and any circumstances that are unique to them) • Better to do too much (particularly re publicity) and to be very thorough with share offer document than to under-prepare – gives you list of people for your next share offer, if nothing else and builds evidence base of demand