Smart Metering announces placing, refinancing to fund meter roll-out

AIM-listed Smart Metering said on Friday that it plans to raise £150m through a placing, as it announced the refinancing of a £280m revolving credit facility to help it achieve its smart meter roll-out plans.

The company said that it agreed a refinancing of its existing £280m revolving credit facility on Thursday with its syndicate of existing banks. The extended debt facility extends the maturity date of the existing facility from March 2019 to November 2020 on similar terms to the existing facility and continues to allow the company to operate within a net debt to EBITDA covenant of 5.25 times.

The extended facility, along with proceeds from the placing, will give the company the "financial and operational flexibility" to fully fund the installation of around 2.5m meters.

Chairman Willie MacDiarmid said: "The roll-out of smart meters to the domestic energy market represents a significant growth opportunity for SMS, enabling the UK's transition to a low carbon energy economy. We are well placed to accelerate our growth in this roll-out phase and to establish an installed asset base that can deliver attractive returns to our shareholders.

"SMS needs a more flexible capital structure to enable us to capitalise on this opportunity. The placing and the debt refinancing will enable SMS to enhance its financial strength to take advantage of this attractive investment opportunity for shareholders."

At 1110 GMT, the shares were down 3.6% to 701p.