Foresight Sustainable Forestry Company PLC has raised £45mln in a placing and offer for subscription, after already spending the £130mln proceeds of its initial public offer eight months ago.
The investment company said it will use the proceeds of the fundraising, which was completed at a price of 107p per share, to buy more assets from its pipeline of forestry and afforestation assets.
The funds raised at its November IPO have been spent on building a portfolio of 40 properties covering an area of 8,658 hectares across Scotland, England and Wales.
Hailing the “milestone” fundraising and busy eight months, Richard Davidson, chair of the company, said: “The net proceeds of the Issue, along with the proceeds of a revolving credit facility that is nearing completion, will be used to acquire our imminent pipeline of forestry and afforestation assets and to further enhance the growing reach and impact of FSF.”
Co-fund managers Robert Guest and Richard Kelly at Foresight, said the pipeline is mostly “afforestation opportunities, that offer attractive capital appreciation potential whilst further extending the direct contribution FSF makes to the twin fights against climate change and biodiversity loss”.
So far, 38% of its properties by value are afforestation sites, where the company plants trees, which it says “provides significant value creation opportunities, alongside providing exposure to the real returns and capital appreciation benefits of UK timber and land markets”.
As examples the portfolio includes the 150-hectre Banc Farm in Carmarthenshire, Wales, where the planting of roughly 250,000 trees was completed in March, which are expected to produce over 48,000 tonnes of sustainable timber; and the 2,150-hectare Fordie property in Perthshire, Scotland, that includes an established woodland forest and hill ground where afforestation is planned.
However, the acquisition of land for tree-planting in Wales and Scotland has become a sensitive issue.
While the aim of creating woodlands on denuded landscapes increases biodiversity, aims to combat climate change by soaking up harmful CO2 emissions, there has been a surge of sales to corporations and investors, such as Foresight, Aviva and Standard Life and even BrewDog, which has driven up land prices and increased the elitism and exclusivity of land ownership, according to research.
Other criticism is that some large-scale tree planting as carried out by these investment companies includes non-native species that are said to damage ancient woodland.