(Alliance News) - SQN Asset Finance Income Fund Ltd said it has hired KPMG to review the valuation model used for six anaerobic digestion plants, and it has commenced its strategic review of the company including the provision of investment management services.
An anaerobic digestion plant converts food and crop waste into biogas, which in turn can be used to generate heat and electricity.
In January, SQN said it is invested in a total of 11 anaerobic digestion plants. Six of them are in the ramp-up phase, with three having not yet reached targeted operational capacity. As a result, the company said it intended to appoint a third-party valuer to provide an independent assessment of the valuation of these assets. The six assets, in aggregate, had a valuation of GBP127.7 million as at the end of November 2019, SQN said.
KPMG Ireland has been appointed to act for the company in reviewing the valuation model for these six plants. The review is expected to complete in March.
The company reiterated its announcement that the assessment will results in delays in publication of its net asset value per share for December 31 and January 31. The NAV per C share for January 31 is expected to be announced as planned towards the end of February as the C share portfolio has no exposure to anaerobic digestion assets.
The Surrey-based investment company also said it has commenced a strategic review of the company, including the provision of investment management services.
The review was announced after the fund saw its shares plunge in January when it said it would be undertaking a review of the models and projections supporting the carrying values of its anaerobic digestion plant investments.
Shares in SQN on Thursday in London closed 0.2% lower at 49.10 pence each. A month ago, its shares were trading at 83.80p per share.
Initial meetings with managers regarding the strategic review are expected to take place in early March with the process expected to complete in April.
"Until the process has been completed, no new investments will be made without prior approval of the board and only payments covering 'business as usual' and agreed existing commitments will be made," SQN said.
By Ife Taiwo; ifetaiwo@alliancenews.com
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