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Bristol Energy Cooperative

BEC 2 year Solar Bond - 2016 - OFFER CLOSED

£500 minimum

Risk factors

All investment and commercial activities carry risk, and investors should consider whether BEC is a suitable investment for them in light of their own personal circumstances.

 

 


General investment risks

  • Capital Risk: Investment in smaller, new and unquoted businesses is likely to involve a higher degree of risk than investment in larger, established companies and those traded on a stock exchange. Investing in bonds is not the same as investing money in a bank account as your capital is at risk and you could lose up to, but no more than, your entire investment.
  • Unsecured: The bond is an unsecured investment and will rank behind secured or preferential creditors. In the event of BCE’s financial failure, a bondholder would have the status of an unsecured creditor and may not be capable of being repaid in full or at all should the proceeds from a sale of BCE’s assets fail to cover all unsecured liabilities.
  • Liquidity: The bonds will not be traded on a recognised exchange and are therefore non-readily realisible. Although bondholders may be able to buy and sell bonds on a matched bargain basis via Ethex, applicants should be aware that there is no guarantee that a willing buyer will be found.
  • Long-term commitment: Applicants should consider investment in the bonds as a long term commitment until the maturity date as the original amount invested will not be available to them except through a sale via Ethex.
  • The bonds are not covered by the Financial Services Compensation Scheme (FSCS): This means if BCE does not fulfil the terms of the Bond Instrument there is no right to get compensation from FSCS.
    Past performance is not necessarily a guide to future performance: Events in the past, or experience derived from these, or indeed present facts, beliefs or circumstances, or assumptions derived from any of these, do not predetermine the future. Hopes, aims, targets, projections (including the financial projections in this offer document), plans or intentions contained in this document are no more than that and should not be construed as forecasts.

Risks to Puriton solar array

  • Mechanical failure: Installations will be insured for damage, breakdown and loss of income in line with standard industry practice and as required by the Close Brothers loan facility. However, there may be interruptions to the generation of electricity from the installations once built, caused by damage to or mechanic/electrical failure of equipment.
  • Solar PV performance: BCE’s assumptions around energy generation levels each year are based on site capacity and yield calculations provided by our construction partners based on methodologies commonly used by the industry. These calculations, and the solar radiation data behind them, have been reviewed and verified by external technical experts appointed by Close Brothers as part of their due diligence process. However, long-term changes to weather patterns and/or equipment underperformance may result in lower levels of electricity generation and therefore income.
  • Government legislation: Puriton solar farm has been pre-accredited with Ofgem which means that the FiT tariff is fixed for 20 years. However, changes in government legislation may affect the profitability of future renewable energy projects undertaken by BCE.
  • Electricity prices: If the electricity prices for which BCE can sell electricity from the solar farm fall, BCE could opt to use export tariff as a floor price. The financial projections assume that electricity prices over the long-term will exceed the export tariff. However, those assumptions of future electricity prices may be inaccurate.
  • Bond redemption: Bondholders will have the contractual right to full redemption of their bonds at the end of the 2 year initial term and, if they wish to extend beyond the 2 year initial term, at annual intervals thereafter. BCE’s ability to repay the bonds at these points is dependent on it being able to secure finance from third parties. 

Comprehensive risks

 This list is not necessarily comprehensive and you should read the entire Bond Offer and the Rules of BEC to consider other risks which may impact upon your investment.

Offer Closed

 As of 30th June this offer is closed.

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