REG - SDCL Energy Effcncy. - Disposal of UU Solar

SDCL Energy Efficiency Income TrustAnnouncement

07/05/2024 07:15

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RNS Number : 2647N  SDCL Energy Efficiency Income Tst  07 May 2024

7 May 2024

 

SDCL Energy Efficiency Income Trust plc

("SEEIT" or the "Company")

Sale of UU Solar

 

SDCL Energy Efficiency Income Trust plc is pleased to announce that it has
sold its UK onsite solar portfolio, UU Solar, to UK Power Networks Services
Holdings Limited, the private networks business of UK Power Networks Group,
for a consideration of £90.8 million. The agreed price represents a 4.5%
premium to the Company's 30 September 2023 valuation.

The UU Solar investment was made in mid-2022. UU Solar supplies substantially
all the existing on-site renewable electricity, through solar, wind,
mini-hydro and other technologies, for the leading UK water company, United
Utilities.  The investment represented a long-term, contracted portfolio with
an investment grade counterparty that contributed to SEEIT's portfolio
construction and its objectives to secure income and preservation of capital.

Since the time of investment, financial markets have been characterised by
higher interest rates and levels of inflation which have increased the total
return that SEEIT is seeking from its portfolio. At the same time SEEIT is
seeking to maintain the strength of its balance sheet by keeping debt at
moderate levels during a period in which it is not issuing new equity. The
sale of UU Solar creates liquidity for SEEIT that can be applied to strengthen
its balance sheet, to help to meet its investment objectives, and to optimise
portfolio construction at this time.

The sale proceeds will be used to reduce short term borrowings under SEEIT's
revolving credit facility (RCF). The Investment Manager continues to take
steps to improve the total return from SEEIT's portfolio and the disposal
provides capacity to recycle capital into existing platform investments, which
represent SEEIT's proprietary and 'organic' pipeline and that offer
opportunities for higher returns. Strength of balance sheet remains a focus
and good progress is being made with further asset disposals and co-investment
partnership opportunities as referenced in its Interim Update Statement on 19
March.

UK Power Networks Services has a long history of successfully managing large
asset portfolios for clients with critical national infrastructure.  It is
active in the water and renewables sector and views UU Solar as a natural fit
with its existing portfolio. UK Power Network Services is part of the wider UK
Power Networks group, which delivers electricity to homes and businesses
across London, the South-East, and the East of England.

Jonathan Maxwell, CEO of the Investment Manager, SDCL, said: "The sale is
positive news for SEEIT as it makes a meaningful contribution to its
objectives to reduce short term borrowings, to improve liquidity and to focus
on investment in higher yielding assets that support SEEIT's total return
objectives.

The agreed price represents a premium to the Company's last published
valuation, which supports the approach that SEEIT seeks to take to its
portfolio valuations. Proving the valuation through realisations should
hopefully help to enhance market confidence in the net asset value of the
Company's portfolio. The Board and Investment Manager of SEEIT remain
committed to helping improve the liquidity and marketability of SEEIT shares.

UK Power Networks Services represents an excellent strategic buyer for a
high-quality portfolio serving an important client. We hope to build on our
relationship with both United Utilities and UK Power Networks Services in the
future to deliver new opportunities for SEEIT."

 

 

 For Further Information

 Sustainable Development Capital LLP  T: +44 (0) 20 7287 7700

 Jonathan Maxwell

 Purvi Sapre

 Eugene Kinghorn

 Ben Griffiths

 Tom Hovanessian

 Jefferies International Limited      T: +44 (0) 20 7029 8000

 Tom Yeadon

 Gaudi le Roux

 TB Cardew                            T: +44 (0) 20 7930 0777

 Ed Orlebar                           M: +44 (0) 7738 724 630

 Henry Crane                          E: SEEIT@tbcardew.com (about%3Ablank)

 

About SEEIT

 

SDCL Energy Efficiency Income Trust plc is a constituent of the FTSE 250
index. It was the first UK listed company of its kind to invest exclusively in
the energy efficiency sector. Its projects are primarily located in North
America, the UK and Europe and include, inter alia, a portfolio of
cogeneration assets in Spain, a portfolio of commercial and industrial solar
and storage projects in the United States, a regulated gas distribution
network in Sweden and a district energy system providing essential and
efficient utility services on one of the largest business parks in the United
States.

The Company aims to deliver shareholders value through its investment in a
diversified portfolio of energy efficiency projects which are driven by the
opportunity to deliver lower cost, cleaner and more reliable energy solutions
to end users of energy.

The Company is targeting an attractive total return for shareholders of 7-8
per cent. per annum (net of fees and expenses and by reference to the initial
issue price of £1.00 per Ordinary Share), with a stable dividend income,
capital preservation and the opportunity for capital growth. The Company is
targeting a dividend of 6.24p per share in respect of the financial year to 31
March 2024. SEEIT's last published NAV was 90.6p per share as at 30 September
2023.

Past performance cannot be relied on as a guide to future performance.

Further information can be found on the Company's website
at www.seeitplc.com (http://www.seeitplc.com) .

Investment Manager

 

SEEIT's investment manager is Sustainable Development Capital LLP ("SDCL"), an
investment firm established in 2007, with a proven track record of investment
in energy efficiency and decentralised generation projects in the UK,
Continental Europe, North America and Asia.

SDCL is headquartered in London and also operates worldwide from offices in
New York, Dublin, Madrid, Hong Kong and Singapore. SDCL is authorised and
regulated in the UK by the Financial Conduct Authority.

Further information can be found on at www.sdclgroup.com
(http://www.sdclgroup.com) .

About UK Power Networks Services

UK Power Networks Services is an expert in distributed energy solutions and
power distribution, delivering energy technology consulting, asset financing,
major project delivery, design and build, operations and maintenance, and
asset management.

UK Power Networks Services integrate innovative technologies, such as electric
vehicle infrastructure, battery storage and microgrids. They provide
end-to-end energy solutions and their experts help clients increase the
productivity of their assets, decarbonise their infrastructure and realise
their infrastructure as a strategic asset.

UK Power Networks Services' world-class engineers serve industries such as
airports, rail, defence, water, logistics and fleet, manufacturing, ports,
local and central government, and commercial buildings. Their high-profile
public and private sector clients with critical infrastructure in complex
environments, trust them to deliver safe, reliable and innovative energy
solutions - allowing them to concentrate on their core business.

UK Power Networks Services have a proud 50-year history and its current
portfolio includes a number of the UK's main airports, High Speed 1, Network
Rail, London Underground, Docklands Light Railway, EDF (Hinkley Point C),
Ministry of Defence, Felixstowe Port, UPS and Canary Wharf.

Further information can be found at www.ukpowernetworksservices.co.uk
(http://www.ukpowernetworksservices.co.uk)

 

 

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