Why Lodestone Energy chose Forsyth Barr, Barrenjoey over Jarden

Solar energy company Lodestone chose local firm Forsyth Barr and Australia’s Barrenjoey to advise on its next capital raise because of their global reach, Lodestone managing director Gary Holden says.

The company’s previous capital raise was led by Jarden Principal Investments.

The “Series D” raise is expected to launch in the third quarter of this year and will be used to fund Lodestone’s Phase 2 solar programme, the company said.

This would include the development of eight more solar farms across New Zealand, bringing 470 gigawatt hours (GWh) of new solar to the local market.

Holden said it was an important step in Lodestone’s journey to continue delivering large-scale solar to New Zealand.

The choice of advisers for the capital raise came down to strategy.

“It’s a strategic thing,” Holden told the Herald.

“Sometimes you want to get a bit of another look at it from another angle,” he said.

“Getting Forsyth Barr and Barrenjoey as a partnership allowed us to get more of an international look on it.”

The next block of equity could end up being a cornerstone of the company.

“In order to get a cornerstone piece of the company, we needed somebody who could cast the net across the whole globe, so we ran a bit of a beauty contest to get proposals from a number of different advisers, and through that process we ended up picking this group, and we are very pleased that we did because it’s going really well,” he said.

NZX listing

Holden said a listing on the NZX is not being considered as part of the company’s capital plan.

“It’s not on the cards yet,” he said.

“We feel that we are moving quickly, and we are on the pace of building a solar farm every quarter,” he said.

Holden said the company had debt arranged for its second phase and had raised part of the equity from existing shareholders.

“Now it’s getting to the cornerstone piece to build the second phase, and we really feel that we can continue to work at by just doing that [raising capital] privately.

“We are becoming a fairly meaningful piece of the market share of the electricity business, and we will see where it goes from there.”

“We think that with this partnership with Forsyth Barr and Barrenjoey, we will be able to tell the story of Lodestone internationally,” he said.

Lodestone’s Phase 2 is set to be larger in scale, with three confirmed South Island farms and additional sites expected to be announced this year.

The company would continue to adopt an “agri-voltaic” design across all its sites, which it says maximises the production of electricity and maintains productive farming.

Lodestone has two solar farms in Kaitāia and Edgecumbe already complete, a third farm in Waiotahe set to be generating by the end of the year, and construction is planned to begin in Whitianga soon.

The company successfully completed an equity raise of $55 million earlier this year led by Jarden Principal Investments, funding the pre-construction of its Phase 2 projects. Lodestone has raised $600m in total capital across its Phase 1 and 2 portfolios.

Lodestone Energy - founded in 2019 - is the country’s first utility-scale solar generation company.

The company is majority New Zealand-owned through private equity partnerships including Jarden Principal Investments, Purpose Capital, Tauhara North No.2 Trust, ACC, K1W1 and Pathfinder.

Jamie Gray is an Auckland-based journalist, covering the financial markets and the primary sector. He joined the Herald in 2011.