SDCL Efficiency Income Trust opts for managed wind down after review

(Alliance News) - SDCL Efficiency Income Trust PLC on Thursday said a managed wind down is in the "best interests of its shareholders", after receiving an underwhelming reception to a strategic plan.

The investor in energy efficiency infrastructure assets has been looking at ways to "address the current discount to prevailing net asset value".

A key priority has been seeking to sell investments to reduce gearing and improve liquidity but this has "proved challenging", SDCL added.

As a result, the board and the investment manager, Sustainable Development Capital LLP have been considering alternative solutions.

This included transferring its listing to a vertically integrated operating company from an investment trust currently.

"Over the last 10 days, the board and the manager have been involved in extensive discussions with a number of SEIT's shareholders regarding the strategic proposal to ascertain their views," SDCL said.

"Following this engagement, it is clear to the board and the manager that there is insufficient support from shareholders to pass the special resolution required to successfully implement the strategic proposal."

The company pointed out a "significant number" of shareholders expressed a clear preference for liquidity rather than the strategic proposal.

As a result, SDCL will now pursue a managed wind down which it said is "currently in the best interests of its shareholders".

"The board now intends to agree appropriate arrangements to effect the managed wind-down and align economic interests towards monetising assets," it added.

Chair Tony Roper said since the "material" increase to interest rates in late 2022, "the macro environment and investment trust landscape has become increasingly challenging" and it has become clear that SDCL can "no longer deliver returns that are acceptable to shareholders in its current structure and the status quo is not viable."

Shares in SDCL Efficiency Income Trust were down 0.5% at 45.26 pence each in London on Thursday morning.

By Jeremy Cutler, Alliance News reporter

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