HLB McKeogh Gallagher Ryan raise over €2.7m in two EIIS private placings

HLB McKeogh Gallagher Ryan were delighted to record our most successful EIIS fundraising to date in 2015. After noting an increased appetite for solid wind farm EIIS projects in 2014 we fundraised for two separate wind farm projects in 2015 raising over €2.7m.

Our Tax Partner Mary McKeogh noted: “We really raised the bar for ourselves this year fund raising for two projects but we were very aware of the strong appetite among tax payers and investors for good EIIS projects. Both of these projects had sound fundamentals including power purchase agreements in place, full planning permission, bank Heads of Terms in place, and Gate 3 grid connection offers which offered investors a level of comfort around each project.

Tullabrack EIIS 2015 Flyer Kilberehert EIIS 2015 Flyer

“Both promoters opted for five year investment terms to facilitate the building up of cash to buy out the EIIS investors, and duly compensated investors with a projected buy out price of €1.20 per €1 invested. When you combine this return with the tax relief it made them very attractive options, which investors appreciated.”

Year-on-year HLB McKeogh Gallagher Ryan are observing increased interest in EIIS – indicative of a resurgence in the economy as people’s incomes begin to rise creating a corresponding increased requirement for tax shelters. The phasing out of various capital allowance incentive schemes also had a major impact with EIIS being the only tax relief of this kind available going forward.

More than €74.1m was invested in EIIS by over 1500 investors in 2015, nearly double the amount of the previous two years. Preliminary figures released by Revenue show that it was used by 280 small and medium sized companies to raise finance, which should have the desired effect as a stimulus for the economy.

Mary McKeogh & Anne Hogan

(L-R) Tax Partner Mary McKeogh & Director Anne Hogan

Investors are also assessing projects carefully asking sophisticated technical queries and researching promoters carefully before committing to an investment. Our Tax Director Anne Hogan observed: “Investors really delve into the detail of a project before investing – assessing the project itself, the promoter, looking at the company’s other financing arrangements, share agreements and put and call options. This is our fourth year fundraising for wind farms and we know how important it is to have the appropriate legal and financial structure in place to protect the EIIS investors as much as possible before going to market with the project.

“We are already sourcing new EIIS projects for 2016; any interested promoters should contact us as early as possible in 2016 as we carefully vet projects before fundraising. Key to a successful fundraising is ensuring the project is well structured in advance so you can take it to the market in October or earlier to facilitate investors Income Tax planning requirements.”

Any companies interested in engaging in EIIS fundraising or simply structuring an EIIS investment, where investors have already been sourced, should contact HLB McKeogh Gallagher Ryan’s Tax Director Anne Hogan ahogan@hlbmgr.ie who would be happy to discuss their requirements further.