Green energy fans will soon be able to take part in the biggest UK flotation of a pure renewables company, as private equity tycoon Guy Hands brings his Infinis business to the stock market for £1.5 billion.
Hands, famed for his disastrous investment in EMI just before the financial crisis, is taking advantage of buoyant stock markets to join the queue of big flotations in the next few months.
Infinis began as a landfill energy business in Hands’ old Waste Recycling Group empire, making electricity by burning off methane from dumped waste. When he sold WRG he retained the landfill operations, and invested the cashflow from the energy it created into onshore windfarms.
Now the windfarms are taking over as the main driver of growth, which Hands, who owns the company through his Terra Firma investment firm, hopes will lure in new investors to the float.
Full details have yet to be announced, but the company will be setting aside a portion of the shares being sold for retail investors, having seen the popularity of Royal Mail among members of the public.
The company has pledged to pay a dividend of £55 million, which suggests a yield for investors of up to 6%, depending on the eventual flotation price. The valuation of £1.5 billion includes about £500 million of debt, and Terra Firma has said it will sell at least 30% of the business in the float.
Institutional investors will be watching the float closely as it will inevitably be seen as a sign of Hands’ ability at stewarding green businesses as he attempts to raise a 3 billion green infrastructure fund. He has not raised a traditional fund since the EMI deal.
The Infinis float is Terra Firma’s third sale in recent months, coming after the flotation of the German residential landlord Deutsche Annington after an initial delay and the £700 million sale of Phoenix Natural Gas. He considered a float of his Odeon cinemas chain over the summer, but decided against it after a review by advisers.