Greenbacker Suspends Distributions, Aims to Double Operating Revenue in Four Years
Greenbacker Renewable Energy Company, a climate-focused investment manager with a registered investment adviser subsidiary, reported in a shareholder letter that it was suspending its monthly distribution for the remainder of 2024 with a plan to reevaluate the position at the end of this year. Greenbacker says the suspension will let it allocate more capital to complete construction of certain projects, including what the company reported as the largest solar project in the state of New York and Greenbacker’s largest clean energy asset to date.
In the letter, Greenbacker says the purpose of the suspension is to reallocate its capital to build out its pre-operating fleet, saying “by supporting the conversion of a significant amount of gigawatts under our control to operational, revenue-generating assets, we expect to double the revenue-generating GW of our operating fleet by 2027.”
The company will likely need to invest over $800 million to complete its project pipeline. Greenbacker also reported that it was seeking to sell off certain non-core assets and recycle the capital for reinvestment or return it to shareholders in the form of future distributions or share repurchases. Greenbacker suspended its share repurchase program, with exceptions for certain hardships including death and disability, in September 2023.
Greenbacker guided that it anticipates these measures will allow for enhanced revenue generation in the future. Greenbacker forecasted 2027 total operating revenue exceeding $350 million. The company’s 2023 reported operating revenue totaled $181 million. Greenbacker reported total assets of $3.5 billion and outstanding liabilities of $1.6 billion as of its most recent quarterly report.
In addition to increasing liquidity through the distribution suspension and potential asset sales, Greenbacker also plans to provide existing shareholders with the opportunity to invest more capital in the company. This may be structured as a rights offering with participation eligibility to be determined in line with regulatory considerations. Shareholders would be able to purchase additional shares in Greenbacker at a discount through a prospective future private offering.
Greenbacker reported a net asset value per share of $7.725 for Class A shares as of May 1, 2024, a decrease of 0.8% from the previously reported NAV per share as of April 1. Class A Shares were originally offered at $10.00 per share.
In April 2024 DI Wire reporting, we highlighted that Greenbacker had secured $437 million in financing to repower two utility-scale wind energy assets in Iowa and complete a like-for-like equipment replacement repower at its largest wind farm in Minnesota.
Greenbacker Renewable Energy Company LLC is a publicly reporting, non-traded limited liability sustainable infrastructure company that both acquires and manages income-producing renewable energy and other energy-related businesses, including solar and wind farms, and provides asset management services to other renewable energy investment vehicles. Greenbacker conducts its asset management business through its wholly owned subsidiary, Greenbacker Capital Management LLC.
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