Holders of “mini-bonds” issued by Future Renewables Eco, a wind farm investment company, are braced to lose more than half their investments after it collapsed into administration on Sept 17.
It owned 10 wind turbines across Britain and was funded by 750 bondholders who ploughed £24m into the company between 2015 and 2017.
They were due to vote on Sept 18 on whether the company should be wound up or placed in administration, but the company’s bosses said early voting suggested an administration was inevitable. The company stopped paying interest in May of this year.
One investor invested more than £150,000 of his inheritance in the bonds, which paid up to 9.5pc per year.
He said: “I was a fool. I searched for an ethical investment. I have grandchildren and I wanted it to build up the capital and support the wind industry.”
He thinks Future Renewables was too optimistic about how much money could be made from selling the electricity to the grid, a key part of its business plan.
He said he would like administrators to investigate how the money from bonds purchased more recently was spent.
“Do not invest without taking financial advice,” he said. “It’s becoming more and more common for people to rush through because they’re being pressured and they’ve got somebody on the phone. They say there’s some measure that’s about to be introduced that would limit the availability of investment. Don’t fall for it.”
Mini bonds are not regulated investments and are not covered by Financial Services Compensation Scheme. Unlike retail bonds, they are not easily tradeable. (see box for more details).
‘I’ll have to work for another decade before I can afford to retire’
Issues around mini-bond issuers have repeatedly flared up in the past three years, following scandals at London Capital & Finance, German Property Group and Blackmore that cost investors more than £600m in lost savings.
This led to the City watchdog’s decision to only allow marketing of mini-bonds to “sophisticated investors”
Another investor, 64-year-old consultant David Ryder, estimated that bondholders may receive 30p in the pound based on writedowns that the company has announced in the value of its assets.
Mr Ryder would like to know more about a loan the company made to another firm for almost £2m. His losses will mean he has to work another five to 10 years before he can retire.
Blair Nimmo, one of the administrators, said: “At this stage it is too early to indicate the likely level of return to the bond holders. This will largely depend on the realisations from the assets and the security arrangements for the different tranches of bond holders.”
“We are aware of the loan to a related party and this will be investigated and pursued as appropriate.”
Future Renewables Eco chief executive Gerry Woods did not respond to a request for comment. https://www.telegraph.co.uk/money/consumer-affairs/invested-150000-inheritance-wind-farms-fear-gone-good/?fbclid=IwAR3hVlZI2pAUo-35842FCM414asFmdV91pxY_tFKjqyRnNdKuinlnwI2eIQ
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