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Energy Garden

Community Bond Offer

£50 minimum

Energy Garden’s mission is to enable people to invest in renewable energy generation, greening London’s transportation infrastructure, improving air quality and biodiversity, and empowering communities and young people. Energy Garden will generate income upon acquiring renewable energy assets, which benefit from a Feed-in Tariff (FiT) or Renewable Obligation Certificates (ROCs) and the sale of electricity into the grid or to private offtakers.


Target Raise

Energy Garden is looking to raise up to £16,500,000 from this offer and the accompanying offer to sophisticated investors,

Bonds will be issued in integral multiples of £50. The Bonds will be the same across each offer and so the same Bond Instrument applies to each offer.


Minimum raise for offer to proceed

The issuance of Bonds from this offer and the offer to sophisticated investors is conditional on total subscriptions reaching a minimum of £2,000,000 on or before 27 July 2018 (or on such other Closing Date, as determined by the Board of Directors) and, in any event, no later than 31 December 2018.


Financial return

Energy Garden intends to pay Bondholders up to a 4% gross interest rate per annum calculated on the outstanding capital amount of their Bonds, in accordance with the Rules. The Bonds will accrue interest from the Issue Date (latest 31st Jan 2019). Interest will be paid annually within 90 days of the end of each calendar year, subject to available funds. The first payment will be made in 2020 on interest accrued in 2019 and payments thereafter will be payable on interest accrued through the relevant calendar year.


Social return

Energy Garden is a Community Benefit Society and, therefore, offers a social return on investment as well as a financial return. The overall value of Energy Garden is far more than just financial. These social outcomes include:

  • Providing a paid, accredited training programme for young people;
  • Building stronger communities;
  • Contributing to healthier lifestyles for all stakeholders;
  • Transforming hundreds of square metres of disused rail lands into community spaces for food production;
  • Establishing the first air quality monitoring programme on TfL’s Overground network;
  • Educating school children;
  • Creating urban biodiversity refuges;
  • Enabling decentralised renewable energy; and
  • Reducing air pollution.

Minimum investment amount

The minimum investment per applicant under this Offer is £50.

For those investors who wish to invest via the Ethex IFISA the minimum investment size is £1,000.


Maximum investment amount

The maximum investment per applicant under this Offer is £100,000.

For those investors who wish to invest via the Ethex IFISA the maximum you can invest for the current tax year is £20,000.

Previous years ISA subscriptions can be transferred into the Ethex IF ISA to pay for any investment. If you wish to transfer an ISA balance to Ethex please give us a call on 01865 403304 and we will send you an ISA transfer form.


Accompanying shareholding

Each Bondholder must apply and pay for and will be issued a single A Class share with a nominal value of £1, which will confer membership in Energy Garden. Each application for Bonds must include an application for a single share, at the nominal price of £1. After Bond capital has been repaid or the Bonds mature on the Maturity Date, Bondholders may choose to either keep their single share or to ask that it be withdrawn by Energy Garden, in which case their £1 will be returned.

Further information on the rights of Shareholders can be found in the Energy Garden Rules.

The reasons for issuing a single share to each Bondholder are as follows:

  • To provide a formal role for each Bondholder in the governance of Energy Garden - each Member will have one share carrying one vote, regardless of the number or value of Bonds held.
  • Voting rights apply to resolutions at general meetings of Energy Garden, which include the election of the Board of Directors and decisions on how to allocate any surplus generated by Energy Garden.
  • Being a Member means you are eligible to be elected to the Board of Directors.

The share is not intended to carry any economic benefit for the shareholder and, on this basis, the Board of Directors does not intend to award interest or dividends to these shares. If a Bondholder wishes to transfer its Bonds, the Bondholder must apply to the Board of Directors to withdraw the share. For the avoidance of doubt, an Applicant with multiple nominated persons need only purchase one Share in total.


Fees payable to purchase this product

Basic account Member account
None None

Statutory charges

None

Other fees and charges

Please be aware that fees apply for withdrawals from the Ethex IFISA that are processed by our Receiving Agent, Woodside Corporate Services Ltd.  Their current fees for processing payouts from an ISA account are as follows:

0.5% + VAT of any return payment subject to a minimum of £5 + VAT and a maximum of £30 +VAT


Getting your money back

THE PERFORMANCE OF AN INVESTMENT CAN FALL AS WELL AS RISE. PROSPECTIVE INVESTORS MAY RECEIVE BACK LESS THAN ORIGINALLY INVESTED.

Capital repayment will be made at the discretion of the Board of Directors from time to time based on the funds available to Energy Garden in any one year. Capital is intended to be repaid annually over approximately 20 years. As with interest payments, capital repayments will be made within 90 days of the end of each calendar year, subject to available funds, and Energy Garden intends to make the first capital repayment in 2020.

If the renewable energy assets perform above expectations, Energy Garden intends for any surplus to be retained for the development and support of Energy Garden’s activities. The allocation of such surplus would be determined at an AGM. Please note that excess returns cannot be distributed as profits, as Energy Garden is a Community Benefit Society. Any excess income in any given year will be used either to repay capital and reduce the outstanding capital amount of the Bonds, or will be reinvested into further development of the energy garden programme.

If assets perform below expectations, interest payments may be reduced. In this case, a full explanation will be given by the Board of Directors at the AGM and communicated to Bondholders. If projected interest is not fully paid in any year, the relevant “shortfall” will not roll over. For example, if an interest payment of 3% is available to Bondholders in a particular year then the “shortfall” of 1% interest will be cancelled. This mechanism is designed to support the solvency and sustainability of Energy Garden and to comply with the requirements of Community Benefit Society status.

When assessing whether or not Energy Garden can pay interest and repay capital in any given year, the Board of Directors will assess the “Available Funds” of Energy Garden. Available Funds means the funds available after having first satisfied:

(a) all other relevant operational expenditure and the costs of meeting any liabilities of Energy Garden, including any liabilities incurred as part of the energy garden program; and

(b) setting aside such operational or other reserves which the Board of Directors reasonably believe are necessary for the prudent management of Energy Garden’s business.


Transferability

The Bonds are transferable to other investors. Although the Bonds are transferable, they will not be listed on a stock exchange. Applicants should be aware that there can be no guarantee that a market for their bonds will develop. It is not expected that Bondholders will be able to sell their Bonds for more than they paid for them and they may need to be sold for less than was paid for them.

The bonds will be available to trade on the Ethex secondary market. Investors can buy transferable bonds when there is someone who wants to sell, and vice versa, and where buyer and seller can agree on the price.

Shares in Energy Garden are not transferable. In the event that a Bondholder seeks to transfer its Bonds to an eligible investor, they must request to withdraw their Share and the new investor must apply for an accompanying Share as a condition of transfer.

In the event that a Bondholder seeks to transfer its Bonds to a nominated person, they must withdraw their Share and the nominated person must apply for an accompanying Share.

Where a Bondholder has multiple nominated persons, that Bondholder need only hold one Share. However, when each of the nominated persons reach age 18, they must each apply for an accompanying Share.


How secure is your money?

Payment of interest and capital is not guaranteed and is dependent on the continued success of the Energy Garden's business model.

This investment is not covered by any government compensation scheme.

The Bonds will be an unsecured obligation of Energy Garden and all Bondholders rank equally amongst each other.

Interest and capital repayments will be made on an equal pro rata basis dependent on the amount of funds invested, without giving priority to one Bondholder over another.

The Board of Directors reserves the right to take on additional debt obligations (secured or unsecured) in accordance with Energy Garden’s Rules if they believe this would be in the best interests of Energy Garden’s community purpose.


Keeping track of your investment

The details of your investment are recorded on your bond and share certificate and by the Society.

If you subscribe to the Ethex Portfolio Service you can track your investment and follow the performance of the business in your personal portfolio.

Bond and Share certificates are issued directly by the Society, not by Ethex.


Tax considerations

Bondholders will be responsible for declaring any income from the Bonds on their tax returns. Interest paid on the Bonds is not subject to withholding tax under section 887 Income Tax 2007 and all interest will be paid to Bondholders without deduction of tax. You should consult a financial expert regarding the effects of the tax on your investment.

This bond offer is Innovative Finance ISA (IFISA) eligible, which means that eligible investors can use their £20,000 per year ISA allowance to invest into an IFISA wrapper provided by Ethex and receive their interest payments free of tax.


Qualification

This Offer is for available to all UK residents over the age of 18. For more information on eligibility, please contact info@energygarden.org.uk.


Provisions on death of a Member

You may (if you wish) elect to nominate a recipient for the value of the Bonds subject to certain restrictions. Bondholders should consider the tax implications of electing to nominate a recipient for the value of the Bonds and take advice from an appropriately qualified person if they are unsure of their position.


Maturity

Capital is intended to be repaid over approximately 20 years. When capital is repaid in full, the Bonds will be deemed to be cancelled. If capital is not fully repaid after 30 years, the Bonds will automatically mature. Any shortfall in capital repayments or interest payments will be cancelled at that point.


Optional early repayment

Bondholders may be repaid some or all of their capital early if the Board of Directors believes such repayment would advance the community purpose of Energy Garden. If surplus profits are available, the Board of Directors may elect to repay the capital on the Bonds to reduce the debt obligation of Energy Garden.

Alternatively, if an attractive refinancing opportunity becomes available, Energy Garden may repay all or some of the outstanding capital to more effectively fund the energy garden programme. Where a Bondholder’s capital is partially repaid, interest will continue to be payable on the remaining outstanding capital.

£383,15019%
Applied for to date, of
£2,000,000 target
or
Invest with IFISA
Minimum IFISA investment is £1,000

What is an Innovative Finance ISA?

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