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Our Power - OFFER CLOSED

Bond Offer

£500 minimum

Risk factors

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

This offer is not covered by the Financial Services Compensation Scheme.


Financial risks

The Directors consider the key financial risk factors to be as follows:

Redemption of bonds:

Investment in Our Power will be in the form of Bonds, which are contractually due for repayment at the end of the term (anticipated to be 31st January 2021). As with other investments of this type it is not certain that Our Power will have sufficient funds or access to financial resources available to repay the Bonds on their due date.

The Directors are confident in their ability to plan and manage the business and financial resources such that they will have a range of options available to them, including but not limited to; a further bond issue; further investment from social impact investors, particularly Trusts and Foundations.

Raising future capital:

Our Power has a requirement to raise £15m over the next five years in debt finance. Our Power has raised £10m to date via Social Impact Investors and is confident of continuing to raise money to grow and fund the business. Continuing to deliver on the business plan gives confidence to future funders and a longer trading history opens up avenues to funders not currently available to a business at this stage of its development. Our Power is reviewing the option to raise equity within the business if it does not prove possible to raise the full debt finance target of £15m.

Failure to reach minimum investment level:

Our Power has a minimum investment raise through this bond of £2m. If the minimum is not reached the funds will be returned to the investors without interest and the bond will be closed. The investors will not bear any costs related to the issue of the bond. Whilst the bond is open Ethex hold the funds and no funds are transferred until the bond is closed. 

Liquidity:

Although the Bonds are transferable, they will not be listed on a recognised investment exchange. An investment in an unquoted security of this nature, being an illiquid investment, is speculative, and involves a degree of risk. It may not be possible to sell or realise the Bonds or to obtain reliable information about the risks to which they are exposed before the end of their term.

Bonds can be sold on a matched bargain basis facilitated by Ethex, an ethical investment intermediary, if there are willing buyers. There is no guarantee that there will be a buyer or what price the buyer will be willing to pay for the Bonds.

Our Power retains the ability, albeit not the obligation, to repay the Bonds early upon death of a Bondholder.

Unsecured debt:

The Bonds will be an unsecured debt in Our Power and are not guaranteed. In the event of Our Power entering into a formal insolvency process Bondholders will rank equally with other unsecured creditors of Our Power and behind secured creditors and may not recover their full investment.

The Directors consider Our Power to be a financially sound business with a proven sustainable business model. As a result, they consider an event leading to an insolvency of Our Power to be remote.

Financial services compensation scheme:

Investing in the Bonds is not the same as depositing your money in a bank account as your capital is at risk and you may not get back the full amount that you invested.

The Bonds are not covered by the Financial Services Compensation Scheme and in the event that Our Power is unable to pay either the capital or interest payments you will not be entitled to make a claim against the scheme.

Taxation:

Information regarding taxation is based upon current UK taxation legislation and HM Revenue & Customs practice. Tax law and practice is subject to change. Any changes in the level and basis of taxation, in tax reliefs or in HM Revenue & Customs practice may affect the value of an investment in the Bonds and returns to Bondholders.

SITR tax relief:

The availability of SITR is dependent on the personal circumstances of the individual, on current tax legislation and HMRC practice as well as ongoing compliance by Our Power with SITR requirements.

Although HMRC advanced assurance has been given prior to investment, there is no guarantee that either formal approval will be achieved in due course or that approval will not be subsequently withdrawn. HMRC assurance does not guarantee the availability of any form of relief under the SITR scheme to any particular subscriber. Investors are advised to take their own taxation advice.

Our Power will use all reasonable endeavours to ensure that all qualifying conditions for SITR are met. However the rules in this area are complex and neither Our Power nor Ethex will have any liability or responsibility to investors in the event that SITR is withdrawn from any or all investors.

If you are considering applying for Bonds, it is important that you understand the taxation consequences of investing in the Bonds. You should read this section and discuss the taxation consequences with your tax adviser, financial adviser or other professional adviser before deciding whether to invest.

Information regarding taxation is based upon current UK taxation legislation and HM Revenue & Customs practice. Tax law and practice is subject to change. Any changes in the level and basis of taxation, in tax reliefs or in HM Revenue & Customs practice may affect the value of an investment in the Bonds and returns to Bondholders.

 


Operational risks

The Directors consider the key operational risk factors to be as follows:

 Energy markets and regulation: 

The energy market has changed over the last 10 years with a number of smaller and medium sized entrants in the market with varying models. Our Power is unique in that it is a not-for-profit and asset locked energy supply company with the mission to tackle fuel poverty. Whilst this makes Our Power different, the regulations Our Power is subject to are no different from all other energy supply companies, including the Big 6. Our Power must work within its licence conditions and is subject to wholesale price volatility and change within the market. Our Power mitigates wholesale price volatility through its hedging and trading strategy and employing an experienced energy trader to oversee this activity. Compliance and regulation is managed by the Operations Director with assistance from a Compliance Manager.

Loss of key management:

Our Power is dependent, to a certain extent, upon the contribution of the Directors and the senior management team. If any of the key staff were no longer involved with Our Power this may have a material negative impact upon the Company’s financial performance.

In the event of a loss of any member of the current Board of Directors, or senior management team, the Directors would aim to attract the right calibre of experienced individual join as a replacement.

Maintaining/increasing switching behaviours/customer retention:

Our Power has developed a solid membership base from which it plans to expand further during the life of the bond. Energy supply is a competitive market and there is no guarantee of membership growth or increases in the number of supply meters.

Our Power’s business model is based on providing more affordable energy, excellent customer service and to engage in the energy sector through generation, heat interventions and metering to further reduce the cost or improve the experience of its customers.

There is a reliance within an energy supply business when growing the customer base that customers will switch to them. This relies on building the brand and having a competitively priced tariff to attach customers to the business. Customer retention is critical to the success of the business and excellent customer service is essential, providing the right products for customers and maintaining a competitively priced tariff. Our Power will continue to work across its communities to raise brand awareness and ensure customer service is first class as well as ensuring its customers are on the lowest tariff available to them from Our Power.

Competition:

As more entrants enter the market and competition becomes greater, Our Power will continue to deliver on our unique selling point (USP) of excellent customer service and a fair and equitable tariff to all customers regardless of payment method. Our Power will continue to innovate to provide products and services that meet the needs of our customer base and in particular people living in fuel poverty.

Ongoing funding requirement:

Our Power has an ongoing requirement for working capital and will need to continue to raise working capital until 2023 in order to deliver the business plan. Evidence to date has shown it has created a niche market and appeals to social investors willing to invest for both social and financial returns.

Offer closed

 As of the 21st December 2017 this offer is closed.

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