Unprecedented demand as half Bright Light’s R50m fund raising snapped up on Day One

Government’s 12J tax incentive to stimulate employment and support targeted sectors is being applauded in the best possible way – via the wallets of sussed SA taxpayers. Bright Light Solar‘s fund raising issue opened to strong demand from BizNews community members yesterday, in a single day attracting deposits for half of the R50m being raised. In this podcast CEO Kevin Shames explains why this year’s issue has been capped and how the fund is able to confidently project a 19% after-tax return. Although theoretically open for another three weeks, the offer must close as soon as investments of R50m have been received via ETF – so, as Shames puts it, this remains very much a case of “fastest fingers first.” – Alec Hogg

For the full details on this investment opportunity exclusive to the BizNews community, contact Bright Light Solar here.

Kevin Shames on the R50m fund raising issue:

It opened yesterday. There were lots of fast fingers and we raised just shy of R25m on the first day. So we are 50% subscribed as of the close of last night. [The issue] runs to the sooner of reaching R50m in capital raise or the 21st, whichever is sooner.

I must admit that is the best day of capital raise that we’ve had. Obviously, given the track record that we’ve got, and the fact that it is a limited capital raise, there was quite a lot of demand – it certainly exceeded our expectations for the flows on one day.

On why the investment opportunity is restricted to previous investors and the BizNews community:

We didn’t want to go too wide on this. In previous years, for example, we had gone to a whole bunch of independent financial advisers and I did roadshows. But because it was a limited capital raise and because of the success that we’ve had together partnering with BizNews, we wanted to keep it exclusive.

What we said is that any previous investor or a BizNews listener has access to this. I think that decision is certainly borne out in the success that we had in the capital raised so far to date. The numbers that came through yesterday [show that] there were a lot of repeat investors. Our previous investors in the 2018, 2019 and 2020 capital raises – a lot of that came through from repeat investors. Then certainly the success that we’ve had in marketing to BizNews listeners. There were a lot of new investors that came through as well.

On the after tax return:

19% is the after tax IRR that we are looking to achieve on this tranche of capital. Remember, that is locked up for five years. You can sell your shares within five years, but then there is a full recoupment of your upfront tax allowance. So in order to make your tax allowance permanent, you have to hold it for 61 months – being just over five years – and then you can exit. For someone that is looking to hold it for 61 months, our forecast return is a 19% after tax IRR.

On the 12J investment sunset clause:

There is a sunset clause both into the existing Section 12J legislation. That sunset clause says that the current version of Section 12J ends on the 30th of June 2021. We are waiting for the Minister of Finance to announce the National Treasury’s decision, as to whether they going to look to extend this investment opportunity or not. We’ll hear that in the budget at the end of February.

For the full details on this investment opportunity exclusive to the BizNews community, contact Bright Light Solar here.

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