Environmentally friendly power generator Viridis Clean Energy Group listed on the Australian Stock Exchange on Wednesday at a premium to its offer price.
Shares in the group first traded at $1.04, 4¢ above the offer price of $1.
The group said its initial public offering of 126 million shares at $1 each was fully subscribed and that there had been "significant excess demand".
Andrew Barry, chairman of Viridis Investment Management, which is the responsible entity for the Viridis Clean Energy Group, said it had been pleasing to see strong interest in the offer from institutional investors.
Viridis is an energy infrastructure fund with a portfolio of clean energy assets, including an interest in the Ardrossan wind farm in Scotland, six landfill gas-fuelled energy generation projects in Texas and two wind farms in Lower Saxony, Germany.
Each share in Viridis Clean Energy Group consists of a unit in each of two trusts, both managed by Viridis Energy Capital.
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The recent strong performance of energy stocks on the Australian Stock Exchange carried through to market debutantes yesterday when three energy listings all closed their first day of trading in the black. Renewable-energy player Viridis Clean Energy Group and gas companies Purus Energy and Livingstone Petroleum hit the boards against a backdrop of buoyant trading in the broader market that pushed the benchmark S&P/ASX 200 index to a record high of 4518.3 points at the close.
Viridis, backed by South African-based investment bank Investec, was the largest of yesterday's listings, after it issued 129 million securities at $1 each, giving investors exposure in two underlying trusts managed by Viridis Investment Management.
Securities in Viridis started trading at $1.04 and closed at $1.06 after more than 17 million securities changed hands.
Management has forecast a distribution of 7.13 ? per security for fiscal 2006, increasing to 9.15 ? in fiscal 2007, which translates into a distribution yield of 9.5 per cent in each of those years.
The group has wind farms in Scotland and Germany and a landfill gas project in Texas, and has indicated that about $24 million of the proceeds from the IPO will be used to take a participation in a high-yielding mezzanine debt facility, which will give the fund exposure to a portfolio of assets in Italy worth about EUR30 million ($48 million).
"We're primarily an equity investor, but we do look at high-yielding debt investments, and while they will never dominate our portfolio they do add extra diversity and you get a nice stable earnings stream from them," Viridis chief executive Edward Northam said.
The fund is focused on building a diversified asset portfolio in the clean-energy sector and is targeting assets that are fully developed and use commercially proven technology, according to Mr Northam.
Wilson HTM infrastructure analyst Gregg Taylor said this was a key attraction for the group because it removed a lot of the uncertainty and timing risk related to construction. Wilson HTM is set to begin coverage of Viridis in the next few months.
Viridis's exposure to the green-credit market in Europe was another major attraction, Mr Taylor said.
"A number of member countries have set quite aggressive renewable-energy targets. What that means is that forecast demand is very much outstripping supply, which points to continued growth in the green-credit market," he said.
The only concern could be the ability of Viridis to get access to quality assets in the future. The renewable-energy sector was set to become much more competitive as some of the larger infrastructure players became involved.
VIR Price at posting:
0.0¢ Sentiment: None Disclosure: Not Held
