SDCL Efficiency Income Trust to begin managed wind-down

(Sharecast News) - SDCL Efficiency Income Trust (SEIT) said on Thursday that it would start a managed wind-down of its investment portfolio, having failed to get shareholder support for a proposed strategic plan.

The trust had been looking to sell investments to reduce gearing and improve liquidity but this has proved "challenging", it said. Although it was recently able to dispose of a diversified portfolio of operational and yielding energy efficiency infrastructure assets for up to £105m, the price represents a discount of around 9% to the carrying value of the portfolio as at the end of September 2025.

SEIT said the disposal process took longer than expected "and illustrates some of the challenges of making disposals at reasonable valuations in the current market".

As a result, the board and the investment manager, Sustainable Development Capital, have considered alternative solutions to address the current discount to prevailing net asset value at which the shares trade.

The strategic plan they came up with included a number of different options such as transferring the company's listing from an investment trust to a vertically integrated operating company, strengthening the leadership team and a potential future equity capital raise.

However, the trust said that during the recent shareholder engagement, a significant number of shareholders expressed a clear preference for liquidity rather than the strategic proposal.

"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," it said.

As a result, the company now plans to begin a managed wind-down and a return of capital to shareholders over time.

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 to the board that SEIT, like a lot of its investment trust peers, can no longer deliver returns that are acceptable to shareholders in its current structure and the status quo is not viable.

"The board is acutely aware of the reduction in share price in recent years and we recognise the frustration and uncertainty this has caused. We have listened carefully to the views expressed in our recent shareholder engagement and are grateful for the constructive dialogue and candour shown throughout.

"Having considered a wide range of options, and in light of the clear preference for liquidity in addition to value, the board believes that proposing a managed wind-down is the most appropriate course of action to seek to deliver value and provide shareholders with a clearer path to realisations, notwithstanding the execution challenges of achieving this objective in the current market environment."

At 1245 BST, the shares were down 6.9% at 42.35p.

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