REG - Asian Energy Impact Asian Energy - AEIT Asian Energy - AEIP - Notice of General Meeting

Asian Energy Impact TrustAnnouncement

24/11/2023 07:00

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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/
(https://www.asianenergyimpact.com/) , and at the National Storage Mechanism
(the "NSM"), which is located at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(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: +44 (0)20 3757 1892

 Sue Inglis, Chair

 Octopus Energy Generation                                          Tel: +44 (0)20 4530 8369

 Press 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
                                                                    (mailto:asianenergyimpacttrust@camarco.co.uk)

 

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