The price is calculated according to the same principle as the valuation of the individual solar park, so that the price at all times best reflects the fair value of the total portfolio of solar parks.
The ratio of debt financing currently amounts to approx. 50% in Nordic Solar A/S. The loan financing is primarily taken out as fixed-rate, non-cancellable loans. In order to optimize returns for our investors, the goal is to have a slightly higher degree of loan financing.
What are the biggest risks when investing in solar energy?
Developments in electricity prices, inadequate due diligence or unrealistic budgets are among the most significant risk.
Historically, many solar parks have been subsidized in the form of high settlement prices for electricity production. Any retroactive changes to these subsidies have been the biggest single risk. However, the market is moving very fast towards subsidy-free solar parks, where electricity now, in most countries, is sold on market terms, either from day to day or on longer more predictable contracts. In the future, the development in electricity prices will therefore pose an increasing risk.
An investment in a solar park is largely based on assumptions and budget prerequisites, and deviations from these can affect future returns. The quality of these budgetary assumptions is thus significant for risk and return. The risk can be minimized through quality in both budgeting and calculation methods, combined with thorough technical, legal and financial pre-analyzes (due diligence).
To the extent that the company in question has the liquidity to do so, a shareholder may, without notice* sell their shares back to the company, at the current monthly price less an administration fee of 1%.
Formally, both companies have a general meeting resolution that authorizes the board of directors to buy back shares. In short, the authorization is the option to buy back 10% of the equity to the extent that the company can find the necessary liquidity for it.
It has been agreed with the Board of Directors that Nordic Solar Energy has earmarked EUR 670,000 of a credit in the bank for a possible repurchase, a similar credit is expected to be established in Nordic Solar Global
*For tax purposes, shareholders who wish to sell their shares back to the company must obtain prior approval from SKAT.
Our customers praise us for a straightforward and transparent business model with a fair, market cost structure, where all significant decisions are made in accordance with investors’ wishes and the guidelines set by the Board of Directors. If you compare Nordic Solar with similar companies in the industry, it is especially on the cost side and the realistic estimates and assumptions that form the basis for each individual investment decision that investors highlight as decisive for their choice of partner.
What are the options to get out of this investment – is there a commitment?
Both companies, Nordic Solar Energy and Global, both have the option to buy back shares. In addition, we have investors on the waiting list who can take over the shares, for which we charge a modest administration fee of 1%.
How does Nordic Solar calculate the value of the individual solar parks?
The value of the individual solar park is calculated by discounting the future cash flows in the budget to present value. The internal rate of return used for this may vary from country to country, and reflects a realistic assessment of the market return in that country at that time.
Can you use pension or VSO funds for the investment at Nordic Solar?
The shares can be acquired privately and are freely convertible, which is why they can subsequently be transferred to a pension deposit if you manage it yourself. As the shares are covered by the Capital Gains Tax Act, purchases of VSO funds will for tax purposes be considered a tax increase.
Please contact the company for the specific status of capital increases and investment opportunities. For the most part, there are no shares for sale, but Nordic Solar is continuously open for subscribing to new commitments in the loan programs.
What price is used when converting commitments to share purchase?
The share price is determined on the basis of the same principle as for the valuation of the individual solar parks, where cash flows from the budget are discounted back to present value. The share price thus reflects a realistic calculation of the value of the total portfolio of solar parks at the given time.
Do I have to convert my loan commitment into shares?
It is 100% voluntary if, at the time the commitment is drawn, you choose to take advantage of the conversion offer that is submitted to acquire shares in the company. The vast majority of investors choose to take advantage of the conversion offer to become a shareholder in Nordic Solar.
I have given a binding investment commitment – when will Nordic Solar draw the money?
An investment commitment runs for 12 months, but on average the commitment is utilized after 5-7 months, or before. As far as possible, investors will be kept informed via a monthly letter, but as there is often fierce competition for attractive projects, the secrecy of these negotiations must also be taken into account in relation to other stakeholders. If you as an investor choose to subscribe for shares when the commitment is drawn, you will receive a discount on the subscription commission, as compensation for the waiting period.
To avoid periods of too much money in the account and thus lower returns for shareholders, the purchase of solar parks for the portfolio is financed with loan commitments made by the company’s shareholders and other investors. Purchasing solar parks and projects for the portfolio can take a long time and varies greatly in size, which is why planning the capital requirement is sometimes difficult. Access to investment commitments from investors strengthens Nordic Solar’s competitiveness and shareholders’ returns.
How often is the share price calculated and who determines the price?
The share price is calculated monthly according to pre-determined principles approved by the Board of Directors. For example, a solar park with an expected return of 6%, all other things being equal, (if the budget holds) will increase by about 0.5% per month. (1/12 of 6%). If an event should occur that affects the return, the share price is adjusted accordingly.
The Company, The Board of Directors and Management
Yes the preparations for a stock exchange listing are well under way and have been for a few years. It has always been Nordic Solar’s ambition to become a public share, so that the spread of solar energy as a sustainable energy source can benefit as many people as possible. More specifically, the companies’ annual accounts in recent years have been prepared in accordance with the same IFRS accounting principles as those used by listed companies. Nordic Solar is also well under way with standardizing, optimizing and streamlining processes, e.g. the roll-out of a common ERP system in 10 countries is expected to be completed during 2021.
Do the Board and management have something at stake?
Yes, both the Board of Directors and management have invested significant amounts in the company and all employees are also shareholders. The company has an attractive warrant program for the Board, management, and employees, that ensures an incentive to create the greatest possible value for the company’s shareholders.
Which new solar energy projects are in the pipeline?
At Nordic Solar, we work continuously with the purchase of new projects, and our pipeline of projects is constantly changing. Behind every investment there is a great deal of work to document all the essential assumptions for the budget which ultimately lays the foundation for the investment decision. Every year, the investment team considers many new investments corresponding to purchase prices of more than EUR 3 bill.
Yes, all investors receive a monthly report that includes stock price, production data, portfolio composition, any deviations from the budget and status of ongoing projects, new investments and investment programs.
Is there ongoing reporting to shareholders and investors?