TIDMAEIT TIDMAEIP
RNS Number : 5323U
Asian Energy Impact Trust PLC
24 November 2023
LEI: 254900VC23329JCBR9G82
24 November 2023
Asian Energy Impact Trust plc
(the " Company " )
Notice of General Meeting
Introduction
The Company has a portfolio of 11 operating assets across India,
the Philippines and Vietnam as well as two "pre-operational"
assets, meaning in development or in construction, both in India.
These two projects are the in-construction 200 MW DC solar PV
project in Rewa Ultra Mega Solar Park (the "RUMS Project") and a
150 MW DC solar PV development project, both owned via the
Company's wholly owned Indian subsidiary, SolarArise India Projects
Private Limited.
At both the general meeting and adjourned annual general meeting
of the Company held on 24 August 2023 (the "August General
Meetings") convened in response to a requisition notice received
from entities affiliated with the Company's former investment
manager, ThomasLloyd Global Asset Management (Americas) LLC (the
"Previous Investment Manager"), shareholders, in line with the
Board's voting recommendation, voted against a resolution to
continue the Company in its present form (the "Continuation
Resolution"). The Company's annual general meeting held on 30 June
2023 was adjourned prior to the Continuation Resolution being put
to shareholders on the basis that the Board considered that
shareholders should have been given the opportunity to make a fully
informed decision on the Company's future once the annual report
for the financial period ended 31 December 2022 had been published.
However, the requisition forced the Company to convene a general
meeting at which a Continuation Resolution was to be proposed prior
to publication of that financial information.
The Board recommended voting against the Continuation Resolution
at the August General Meetings for the detailed reasons stated in
the circular to shareholders dated 31 July 2023. In summary, the
key reasons were: (i) the continuing uncertainty around the
Company's valuations and financial position and, in particular,
material uncertainty around the RUMS Project (which uncertainty had
led to the suspension of the listing of the Company's shares on 25
April 2023, the "Suspension"); (ii) the lack of a plan from the
Previous Investment Manager to assist in a potential relaunch of
the Company; and (iii) a failed Continuation Resolution entitled
the Company to terminate its appointment of the Previous Investment
Manager summarily and without further payment in respect of the
Previous Investment Manager's otherwise initial five-year term.
The appointment of the Previous Investment Manager was
terminated with effect from 31 October 2023 and on 1 November 2023
the Company announced that Octopus Energy Generation ("OEGen") had
been appointed as the new transitional investment manager for a
minimum term until 30 April 2024. OEGen's immediate priorities are
assisting the Company with finalising the 31 December 2022 and 30
June 2023 valuations, 2022 audit and accounts and 2023 interim
report and lifting the Suspension as soon as possible. This process
includes undertaking detailed due diligence on the Company's
assets, including the RUMS Project, to ensure the completeness and
accuracy of all information required to finalise the outstanding
valuations, audit and financial reports. An update on the progress
made on these critical workstreams since OEGen's appointment as the
transitional investment manager is provided below under the heading
'Progress towards lifting the Suspension'. Following the lifting of
the Suspension, trading in the Company's shares will
recommence.
As a consequence of the Continuation Resolution not being
passed, as announced on 24 August 2023, the Board commenced a
strategic review of the options for the Company's future (the
"Strategic Review"). As explained in more detail below, whilst it
is well underway, the Strategic Review is not expected to be
completed until the end of the first quarter of 2024.
Under the Company's articles of association (the "Articles"), in
the event that a Continuation Resolution is not passed, the
Directors must, within four months of the date of the general
meeting at which the resolution was not passed, put forward
proposals for the reconstruction, reorganisation or winding-up of
the Company to shareholders for their approval. The Board has
considered possible options for a reconstruction or reorganisation
of the Company but, as explained below, has concluded that a
reorganisation or reconstruction is not viable or in the best
interests of shareholders as a whole. Accordingly, in order to
comply with its obligation under the Articles, the Board's only
option is to put a proposal to shareholders for the winding-up of
the Company and appointment of liquidators (the "Resolution"),
although, as explained in more detail below, the Board is
recommending that shareholders vote against the Resolution for the
following reasons:
-- if the Resolution is passed:
- it is expected that the listing of the Company's shares will be permanently suspended; and
- liquidators will be appointed to realise the Company's assets
and return cash to shareholders - the liquidators would have an
explicit sale mandate and would not be acting in line with the
Company's investment and impact policies; rather their mandate
would be a simpler realisation focussed process; or
-- if the Resolution is not passed (in-line with the Board's voting recommendation):
- the Board will have the additional time needed to complete the
Strategic Review - the Board expects to conclude the Strategic
Review by the end of the first quarter of 2024 and, at this stage,
based on the information currently available, the most likely
outcome of the Strategic Review is a proposal for either the
relaunch of the Company or a managed wind-down of the Company
before a formal winding-up;
- irrespective of whether the Company is relaunched or placed in
managed wind-down following completion of the Strategic Review, the
Company's portfolio will continue to be managed by a professional
investment manager whose priorities will include seeking to
optimise shareholder value;
- shareholders will have the opportunity to vote on the outcome of the Strategic Review; and
- as set out below under 'Progress towards lifting the
Suspension', the Board expects to be in a position to apply for the
restoration of the listing of the Company's shares by 29 December
2023.
The notice of the General Meeting at which the Resolution will
be proposed will be posted to shareholders today, and copies will
shortly be available for inspection on the Company's website
https://www.asianenergyimpact.com/ , and at the National Storage
Mechanism (the "NSM"), which is located at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism .
PROGRESS TOWARDS LIFTING THE SUSPENSION
In the brief period since OEGen's appointment, considerable
progress has been made on the key priorities referred to above. In
particular:
-- OEGen has met with the existing local asset managers
responsible for the Company's underlying investments and is
reviewing all contractual and governance provisions.
-- OEGen is working closely with Sgurr, the technical adviser
appointed by the Board prior to the appointment of OEGen, to review
the findings from the updated technical due diligence currently
being conducted across all operational sites and will feed those
findings back through to the valuations.
-- OEGen has started the review of asset performance and is
preparing a review of financial and operational performance through
to 30 September 2023 to be presented to the Board on 30 November
2023.
-- OEGen has provided draft valuations for the Company's
investments as at 31 December 2022, 30 June 2023 and 30 September
2023 to the Company. PricewaterhouseCoopers LLP ("PwC") has been
engaged by the Company and its AIFM, Adepa Asset Management S.A.,
to provide a private independent review and opinion on the
reasonableness of the final valuations. It should be noted that
certain inputs into OEGen's draft valuations remain subject to
completion of OEGen's due diligence on the Company's investments.
However, as anticipated in the Company's announcement of 12 July
2023 and circular to shareholders dated 31 July 2023, the draft
valuations that have been prepared show significant downwards
movements from the published valuations for 30 September 2022.
-- Drafting of the 2022 annual report is well-advanced and
drafting of the 2023 interim report is underway.
-- The Company's auditor has recommenced work on the 2022 audit.
In view of the progress made on these critical workstreams,
having consulted OEGen, PwC and the Company's auditor and based on
the information currently available, the Board expects to announce
the unaudited NAV as at 30 September 2023 by 13 December 2023, and
to then publish the audited December 2022 NAV, unaudited June 2023
NAV, 2022 annual report and 2023 interim report by 29 December
2023. Should there be any material change to this expected
timetable, the Board will update investors by an announcement
through a Regulatory Information Service.
The Company's sponsor has had discussions with the Financial
Conduct Authority (the "FCA") with regard to lifting the
Suspension. The FCA has confirmed that, once the 2022 annual report
and 2023 interim report have been published and uploaded to the NSM
, the Company can apply for the Suspension to be lifted. The Board
intends to apply, immediately following publication and uploading
to the NSM of the 2022 annual report and 2023 interim report, for
the Suspension to be lifted. Following the lifting of the
Suspension, trading in the Company's shares will recommence.
UPDATE ON THE RUMS PROJECT
OEGen has finalised the appointment of Fichtner as the technical
adviser for the RUMS Project. Resources from Fichtner are arriving
on-site in late November 2023 to monitor construction progress.
OEGen will visit the construction site (and other operational
assets in India) in late November into early December 2023. A
further update on progress and the expected project completion date
will be provided in four to six weeks.
status of the strategic review
Following the Continuation Resolution having failed, the Board
began the Strategic Review. The scope of the Strategic Review has
taken into account the Directors' obligation to put forward
proposals for the reconstruction, reorganisation or winding-up of
the Company to shareholders for their approval at a general meeting
held on or before 24 December 2023 (being four months after the
date of the general meetings at which the Continuation Resolution
was not passed). The scope is also cognisant of shareholder
feedback since the Suspension, which has repeatedly confirmed the
importance to many shareholders of the impact strategy which the
Company was established to deliver and their interest in supporting
a relaunch of the Company.
The Board, having been so advised, considers that the purpose of
the provision in the Articles to put forward proposals for the
reconstruction, reorganisation or winding-up of the Company is to
offer shareholders an exit opportunity, following a failed
Continuation Resolution, within the prescribed timeframe. The Board
has considered possible options for a reconstruction or
reorganisation of the Company but, given, in particular, the
concentrated and illiquid nature of the Company's portfolio and the
current size of the Company, the Board has concluded that a
reorganisation or reconstruction is not viable or in the best
interests of shareholders as a whole. Accordingly, in order to
comply with its obligation under the Articles, the Board is putting
a proposal to shareholders for the voluntary winding-up of the
Company. For the reasons stated below, the Board is recommending
shareholders vote against this proposal.
In view of the shareholder feedback referred to above, the
Board, together with its advisers, is engaged in the process of
exploring the potential for a relaunch of the Company with a clean
energy-focused impact strategy. A broad range of investment
managers, based in the UK and overseas, have been invited to submit
proposals for such a relaunch. The Board, with its advisers, is
currently analysing the initial proposals received, with a
particular focus on the proposed investment strategy, relevant
investment experience and track record, resources available to the
Company, prospective returns, risks and risk management, marketing
capabilities and whether, overall, the proposal offers a compelling
investment proposition for both existing and prospective investors
to enable the Company to scale up its size significantly over time.
Once the analysis has been completed, the Board anticipates
inviting a shorter list of potential investment managers to submit
final proposals early in 2024.
The Board expects to conclude the Strategic Review by the end of
the first quarter of 2024. At this stage, based on the information
currently available, the most likely outcome of the Strategic
Review is a proposal for either the relaunch of the Company or a
managed wind-down. The latter, if proposed, would seek to achieve
an optimal balance between maximising shareholder value and timely
return of cash to shareholders, before a formal winding up once
substantially all of the Company's assets have been realised.
The Board will continue to consult and update shareholders at
key stages of the Strategic Review process.
REASONS WHY THE BOARD RECOMMENDS shareholders VOTE AGAINST THE
RESOLUTION
If the Resolution is passed, the listing of the Company's shares
is expected to be permanently suspended
Under the Listing Rules, the FCA may suspend the listing of an
investment trust's shares if it is winding-up. It is standard
practice for the listing of an investment trust's shares to be
suspended if it is winding-up. Accordingly, it is expected that, if
the Resolution is passed, the Suspension will not be lifted or, if
it has been lifted prior to the General Meeting, that the listing
of the Company's shares will again be suspended, this time
permanently and the liquidators may be required to seek a
cancellation of the listing.
To enable the Strategic Review to be completed
As noted above, the Board is progressing its Strategic Review
and, once completed, the optimal proposal for the future of the
Company should be clear. The Board expects, having delivered on the
immediate priorities referred to above, to complete the outcome of
the Strategic Review by the end of the first quarter of 2024.
Voting against winding-up the Company at the General Meeting will
allow the additional time needed to complete the Strategic
Review.
Shareholders will have a further opportunity to vote on the
Company's future following completion of the Strategic Review
If the outcome of the Strategic Review is a recommendation to
relaunch the Company, the Board will put forward a further
Continuation Resolution to shareholders for their approval before
implementing that outcome. Alternatively, in the event of the Board
recommending a managed-down, material changes will be required to
the Company's current investment policy and such changes would
require to be approved by an ordinary resolution of shareholders
(the same level of approval as is required for the Continuation
Resolution).
If the Company is relaunched following the Strategic Review,
there will be further opportunities to vote on its continuation
The Articles require a further Continuation Resolution to be
proposed at the Company's annual general meeting in 2027 (being the
first annual general meeting of the Company held following the
fifth anniversary of the completion of its IPO). If that
Continuation Resolution is passed, the Articles require that a
further Continuation Resolution be proposed at every fifth annual
general meeting thereafter. If any Continuation Resolution is not
passed, the Directors must put forward proposals for the
reconstruction, reorganisation or winding-up of the Company to
shareholders for their approval within four months of the date of
the general meeting at which the resolution was not passed.
The liquidators would have a narrower mandate than an investment
manager and would be focussed primarily on the realisation of
assets
The liquidators would have an explicit sale mandate and would
not be acting in line with the Company's investment and impact
policies; rather their mandate would be a simpler realisation
focussed process.
Conclusion
For the reasons set out above, the Directors unanimously
recommend shareholders vote against the Resolution being proposed
at the General Meeting.
Enquiries:
Asian Energy Impact Trust plc Tel: +4 4 (0)20 3757 1892
Sue Inglis, Chair
Octopus Energy Generation Tel: +44 (0)20 4530 8369
P ress Office
Shore Capital (Joint Corporate Broker) Tel: +44 (0)20 7408 4050
Robert Finlay / Rose Ramsden (Corporate)
Adam Gill / Matthew Kinkead / William Sanderson (Sales)
Fiona Conroy (Corporate Broking)
Peel Hunt LLP (Joint Corporate Broker) Tel: +44 (0)20 7418 8900
Luke Simpson / Huw Jeremy (Investment Banking Division)
Alex Howe / Richard Harris / Michael Bateman / Ed Welsby (Sales)
Smith Square Partners LLP Tel: +44 (0)20 3696 7260
(Financial Adviser to the Company)
John Craven / Douglas Gilmour
Camarco (PR Adviser) Tel: +44 (0)20 3757 4982
Louise Dolan / Eddie Livingstone-Learmonth / Phoebe Pugh asianenergyimpacttrust@camarco.co.uk
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