Investment

Osney Lock Hydro is an Industrial and Provident Society (IPS) for the Benefit of the Community. Its shareholders are its members and control the Society, with each member having one vote regardless of the size of their shareholding.

We have been set up using the Wessex model rules, which are available for inspection here. Osney Hydro EIS

How to apply for shares

The share offer document and application forms can be downloaded from the Invest menu.

Interest payments

Shares in an IPS can earn you interest. We aim to pay interest from the end of the second year of operation, with an internal rate of return of 4% (excluding any tax reliefs). An internal rate of return is a measure of profitability of investments, and the share offer document explains how this has been calculated.

Tax relief

We are working to ensure that the shares are eligible for Seed Enterprise Investment Scheme (SEIS) and Enterprise Investment Scheme (EIS), government-backed scheme designed to help smaller high-risk trading companies raise finance by offering a range of tax relief incentives to investors who purchase new shares in those companies. If SEIS is granted, this will enable the first £150,000 of investment to qualify for 50% tax relief – enabling eligible investors to double the value of their investment at no additional cost to themselves. Under EIS, the remaining amount invested would attract 30% tax relief.

You can deduct income tax to the equivalent percentage of your total investment. For example, an investment of £1,000 under SEIS will have 50% deducted, making the net cost £500 and increasing the % returns significantly.

If you are able to claim tax relief on your investment (see below) the effective rate of return would therefore increase as follows:

  • SEIS: 9.4%
  • EIS: 6.9%

Please note that these returns are purely illustrative. They are not estimates or forecasts, and should be regarded in the context of the risk factors detailed in the share offer document.

Please also note that the availability of any tax relief, including EIS and SEIS, depends on the individual circumstances of each investor. We cannot guarantee your individual entitlement to EIS tax relief and recommend you seek professional advice.

Allocation of the first £150,000 of SEIS-eligible shares will be done on a strictly first-come-first-served basis, on receipt of a completed application form and payment.

You can read more about the full range of tax advantages available at the HMRC website.

What happens when I apply?

Shares are payable in full on application. We will acknowledge receipt of your cheque and application and may cash your cheque as soon as it is received.

The Directors intend to consider all applications received at a meeting on 7 May 2013.

If we have received more money for this offer than we need, we may decide to issue you with fewer shares than you applied for. In this event, we will return the balance to you within 28 days of the Board of Directors meeting. Priority will be given to people living within ten miles of Osney Lock.

The share offer document outlines the process in full, including what will happen if we do not raise sufficient funds to proceed with the hydro scheme.

Will the value of my shares increase?

The value of shares in Osney Lock Hydro will not increase, but may reduce if liabilities exceed assets.

The value of your shareholding will gradually reduce as we return capital to you over the lifetime of the project. At the end of 20 years, all share capital will have been returned to shareholders.

Withdrawing capital

The share offer document outlines how we intend to return capital to investors over the 20-year lifetime of the investment opportunity.

You cannot cash in your shares during the first three years. After this date you can apply to withdraw capital, but must give 180 days’ notice, and the decision is entirely at the Board’s discretion although we will consider all requests sympathetically. Further details are available in the share offer document.

However, we urge potential investors to view a stake in Osney Lock Hydro as a 20-year investment, and only to invest funds if they are able to make a long-term commitment to supporting the project.