Lithuania's green utility Ignitis ponders IPO

Lithuanian renewables-focused utility Ignitis Group, or AB Ignitis grupe, plans to float a stake of 25% to 33.33%, it announced today.

The group is considering an initial public offering (IPO) on the main trading list of Nasdaq Vilnius and admission of its global depositary receipts (GDRs) to the official list of the FCA and to trading on the main market of the London Stock Exchange (LSE). Any such offer would be solely comprised of new shares. Lithuania’s Ministry of Finance will continue to be the company’s majority shareholder with an interest of at least 66.67%, the announcement says.

JP Morgan Securities plc, Morgan Stanley & Co International plc, Swedbank AB and UBS Europe SE will serve as joint global coordinators and joint bookrunners if the group proceeds with the IPO. BofA Securities Europe SA will also act as a joint bookrunner.

Ignitis is a utility that operates in the Baltic region, more specifically in Lithuania, Latvia, Estonia, Poland and Finland. About 70% of its EBITDA comes from the Networks business and 17% from Green Generation activities.

The group launched its green transformation in 2015 with two combined heat and power (CHP) biomass and waste projects in Lithuania and subsequently started investing in wind farms. It also has solar and hydro power plants. Last year, it generated 98% of its power from renewable sources and currently has no coal or nuclear plants in its portfolio. It has pledged to become net CO2 neutral by 2050.

At present, Ignitis' Green Generation capacity stands at 1.1 GW. As part of its 2020-2023 strategy, it plans to increase that to 1.6 GW-1.8 GW, and then to 4 GW by 2030.

The group anticipates investing between EUR 1.7 billion (USD 2bn) and EUR 2 billion through 2023, including to expand its green energy portfolio and on improving Networks.

Ignitis aims at high single-digit to low double-digit levered equity returns for investments and has set a fixed starting dividend level of EUR 85 million for 2020, with a targeted minimum annual dividend growth rate of 3%.

(EUR 1.0 = USD 1.184)

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