Sunly to raise EUR 150m in equity funding ahead of mid-term listing

By Mergermarket • JANUARY 18, 2022

Sunly, an Estonian renewable energy company, is looking to raise EUR 150m in equity funding by June 2022, CEO and founder Priit Lepasepp told this news service.

The company will offer an unspecified minority stake in exchange for an investment, he said, declining to comment on the business’s valuation. 

Management has not yet decided if it will use an M&A advisor for the fundraising, Lepasepp said, adding it is in the process of selecting a vendor due diligence service provider.

Sunly will look to attract investment from professional and institutional investors who believe in renewables and understand the need for their development, he said. The company will invest the majority of the equity capital into construction of new solar, storage and wind assets in the Baltics and Poland, Lepasepp said. He declined to comment on the capacity of assets it will seek to develop using the funding.

The fundraise will likely be its last round open to external investors prior to its listing, Lepasepp said, adding unspecified internal equity raising from existing investors is possible. 

Sunly’s IPO is possible in three to five years, he said, adding this is only an indicative timeframe. It will seek to select the stock exchange with best liquidity for its investors, Lepasepp added.

The company raised EUR 28m from a group of investors in July 2021, bringing total investment into the business to EUR 44m, as reported. The investment round came from Sunly’s existing as well as new investors such as domestic entities Warmeston, Trailborg, Baltic Energy Asset Management, VanMeter, Metsagrupp, Päikese ja Tuule, Scandium Energia and Direct Consulting. A Norwegian municipal company, Vardar, as well as the company’s management have also joined the round, as reported.

Sunly is a growth company and there are no investor exits planned in the upcoming round, with its existing investors chipping in once again, Lepasepp added. Aside from equity funding, Sunly also uses cash flow from its existing assets, bank and bond financing to build new renewable projects, he said, declining to elaborate on the amount of debt funding that could top up the equity round.

The company invested a total of EUR 50m into renewable asset development to date in combination of equity, bank and bond funding, Lepasepp said. 

Sunly operates a portfolio of solar plants with 34 MW capacity and plans to finalise the construction of additional 97 MW-capacity solar plans by the end of this year. Its solar plants generated revenue of c. EUR 2m last year, with forecasts pointing to EUR 5.6m turnover in 2022, Lepasepp said. 

Earlier this month, Sunly announced it will acquire the Polish solar power developer Alseva Group, while Alseva’s owners will acquire a stake in Sunly, as reported. The transaction, whose financials were not disclosed, would bring Sunly at least 400 MW ready to build solar power developments in the short term and 2,000 MW in five years. After the deal, Sunly will have 7.8 GW of renewable energy projects under development, Lepasepp added.

Sunly handled the M&A work internally and was advised by EY on financial and tax matters and by SK&S on legal affairs, Lepasepp added.

Sunly, which has a team of 100 employees, is an independent power producer established in 2019 by the former team of the Estonian renewable energy developer Nelja Energia, after Nelja’s sale to domestic energy company Enefit Green, according to the company’s website. Nelja was sold for a total consideration of GBP 430m (EUR 515m) in May 2018, according to this news service deals database.

The company develops, constructs and operates solar, wind and storage projects in Poland and the Baltics; it also invests in sector startups, according to its website.