0001501729
false
0001501729
2023-07-19
2023-07-19
iso4217:USD
xbrli:shares
iso4217:USD
xbrli:shares
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date
of earliest event reported): July 19, 2023
FS
Energy and Power Fund
(Exact name of Registrant as specified in its
charter)
Delaware (State
or other jurisdiction of
incorporation) | |
814-00841 (Commission File
Number) | |
27-6822130 (I.R.S.
Employer Identification
No.) |
201
Rouse Boulevard Philadelphia,
Pennsylvania (Address
of principal executive offices) | |
19112 (Zip
Code) |
Registrant’s
telephone number, including area code: (215)
495-1150
None
(Former name or former address, if changed
since last report)
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check
mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this
chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Item 3.03 |
Material Modification to Rights of Security Holders. |
On July 19, 2023,
the board of trustees (the “Board”) of FS Energy and Power Fund (the “Fund”), including the independent
trustees, approved the termination of the Fund’s second amended and restated distribution reinvestment plan with respect to
distributions declared by the Board on the Fund’s common shares, effective as of September 15, 2023. After this date, all shareholders will receive any subsequent distributions in cash.
Item 7.01. |
Regulation FD Disclosures. |
As
previously announced in May 2023, the Board of the Fund has approved changing the Fund’s name to FS Specialty Lending Fund
and changing its non-fundamental investment policy to be to invest primarily in a portfolio of secured and unsecured floating and fixed
rate loans, bonds and other types of credit instruments, which, under normal circumstances, will represent at least 80% of the Fund’s
total assets, rather than to invest at least 80% of its total assets in securities of energy and power related, or Energy, companies.
The Board of the Fund also approved changing the Fund’s investment objective from generating current income and long-term capital
appreciation to generating current income and, to a lesser extent, long-term capital appreciation.
The
Fund will send a regulatory notice to its shareholders to inform them that the above changes will take effect on September 29, 2023,
a copy of which is attached hereto as Exhibit 99.1.
Cautionary Statement Regarding Forward-Looking Statements
Statements included herein
may constitute “forward-looking” statements as that term is defined in Section 27A of the Securities Act, and Section 21E
of the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995, including statements with
regard to future events or the future performance or operations of the Fund, the transition in investment policy, anticipated distribution
rates, portfolio rotation, borrowings and liquidity events. Words such as “intends,” “will,” “expects,”
and “may” or similar expressions are intended to identify forward-looking statements. These forward-looking statements are
subject to the inherent uncertainties in predicting future results and conditions. Certain factors could cause actual results to differ
materially from those projected in these forward-looking statements. Factors that could cause actual results to differ materially include
changes in the economy, geo-political risks, risks associated with possible disruption to the Fund’s operations or the economy
generally due to hostilities, terrorism, natural disasters or pandemics such as COVID-19, future changes in laws or regulations and conditions
in the Fund’s operating area, unexpected costs, the ability of the Fund to (i) transition to a diversified credit strategy
within anticipated timeframes or at all, (ii) pay the targeted distributions, (iii) obtain the applied-for exemptive relief,
(iv) obtain leverage on terms satisfactory to the Fund and (v) achieve a liquidity event, and such other factors that are disclosed
in the Fund’s filings with the Securities and Exchange Commission (the “SEC”). The inclusion of forward-looking statements
should not be regarded as a representation that any plans, estimates or expectations will be achieved. Any forward-looking statements
speak only as of the date of this communication. Except as required by federal securities laws, the Fund undertakes no obligation to
update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Readers are cautioned
not to place undue reliance on any of these forward-looking statements.
Item 9.01 |
Financial Statements and Exhibits. |
(d) Exhibits
SIGNATURE
Pursuant to the requirements of the Securities
Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly
authorized.
|
FS Energy and Power Fund |
|
|
|
Date: July 21, 2023 |
By: |
/s/ Stephen Sypherd |
|
|
Stephen Sypherd |
|
|
General Counsel |
Exhibit 99.1
July 21, 2023
IMPORTANT
NOTICE REGARDING CHANGE IN INVESTMENT POLICY
Dear FS Energy & Power Fund Shareholder,
The
board of trustees (the “Board”) of FS Energy & Power Fund (the “Fund”) recently approved changing the
Fund’s name, investment objectives and investment policy as part of a plan to transition the Fund’s investment strategy
from investing primarily in private U.S. energy and power companies to a diversified credit strategy investing in private and public credit
in a broader set of industries, sectors and subsectors.
The
Board (including all of the independent trustees) determined that these changes are in the best interest of the Fund and its shareholders
following a thorough review of strategic alternatives, conducted over the course of many months with the assistance of an outside financial
advisor. The transition to a diversified credit strategy is designed to help:
| · | Enhance the return to shareholders |
| · | Maximize the Fund’s long-term liquidity options |
| · | Accelerate the timeline to a liquidity event |
| · | Reduce the volatility associated with a single sector-focused strategy |
Please see below for more detail on each of these points and risk considerations
related to the transition.
Name
change: In conjunction with the investment policy change, the Fund will be renamed FS Specialty Lending Fund.
Investment
policy: The Fund will adopt a new investment policy to invest primarily in a portfolio of secured and unsecured floating and
fixed rate loans, bonds and other types of credit instruments, which, under normal circumstances, will represent at least 80% of the Fund’s
total assets. This new investment policy will replace the Fund’s current investment policy,
which is to invest at least 80% of its total assets in securities of energy and power companies. Like the current investment policy,
the new investment policy is a non-fundamental investment policy and may not be changed without at least 60 days’ prior notice to
holders of the Fund’s common shares of any such change.
Investment
objectives: The Fund will change its investment objectives from generating current income and long-term capital appreciation
to generating current income and, to a lesser extent, long-term capital appreciation.
These changes will be effective on September 29, 2023. In the
meantime, management has begun transitioning the Fund’s portfolio holdings away from investments in the energy sector, while remaining
in compliance with the Fund’s current policy.
Additional
resources: In anticipation of these changes, there are a variety of resources available to you with further information, including
an expanded FAQ, on our website at https://fsinvestments.com/resources/fs-energy-power-fund-update/.
Enhanced
distributions: To demonstrate a meaningful and tangible step towards providing shareholders with liquidity in the near-to
medium-term, we expect the Fund to provide enhanced distributions to shareholders. The enhanced distributions are expected to be paid
quarterly commencing in the third quarter of 2023 and increase until the achievement of a long-term liquidity event, subject to an annualized
cap of 15% of the Fund’s then-current net asset value beyond 2026 until a long-term liquidity event. We expect a portion of the
distributions will represent a return of investor capital, helping to accelerate liquidity for shareholders in the near-term. The cumulative
projected distributions to be paid during the transition period are expected to represent a material portion of the current value of an
investor’s shares. There can be no assurance that the Fund will be able to make these distributions or achieve these results. Distributions
are subject to Board approval, market conditions and legal restrictions.
Termination
of Distribution Reinvestment Plan: The Fund’s distribution reinvestment
plan will be terminated effective September 15, 2023 to ensure that all shareholders receive any enhanced distributions in cash during
the transition period.
| · | For shareholders whose account is currently held with a custodian, future distribution payments will be sent to the custodian of record. |
| · | For shareholders whose shares are currently held by the Fund’s transfer agent, you will receive a physical check delivered to
the address on file. Shareholders are encouraged to add banking instructions to their account in order to receive future distributions
electronically rather than by check by completing and submitting the FS Account Maintenance Form located on the FS Investments website. |
Long-term
liquidity: We currently expect to target a liquidity event within three years of the effective date of the investment strategy
change, subject to the pace of the portfolio rotation, Fund performance, market conditions and the best interest of shareholders. A liquidity
event could include a merger, sale of the portfolio, a listing of the Fund’s common shares on a national securities exchange or
other transaction as approved by the Board.
We will provide further updates as we work towards a long-term liquidity
event for shareholders to help maximize shareholder value.
Sincerely,
FS Investments
Fund information |
Current fund name |
FS Energy & Power Fund |
New fund name |
FS Specialty Lending Fund |
CUSIP |
30264D109 |
Risk Considerations
We expect that the transition
to the Fund’s new investment policy will require more frequent trading and a higher portfolio turnover (i.e., the purchase and sale
of instruments and securities). The more frequently the Fund trades, the higher the commission and transaction costs and certain other
expenses involved in its operations. The Fund will bear these costs regardless of the profitability of its investment and trading activities.
In addition, a high portfolio turnover may increase the recognition of short-term, rather than long-term, capital gains. The effect of
any changes to the Fund’s investment policy, current operating policies, investment criteria and strategy could negatively impact
the Fund’s ability to pay distributions to shareholders and cause shareholders to lose all or part of their investment. Finally,
because the Fund’s common shares are not expected to be listed on a national securities exchange for the foreseeable future and
the Fund’s share repurchase program remains suspended, shareholders will be limited in their ability to sell their common shares
in response to any changes in the Fund’s investment policy, operating policies, investment criteria or strategy.
Cautionary Statement Concerning Forward-Looking Statements
Statements included herein may constitute “forward-looking”
statements as that term is defined in Section 27A of the Securities Act, and Section 21E of the Securities Exchange Act of 1934,
as amended by the Private Securities Litigation Reform Act of 1995, including statements with regard to future events or the future performance
or operations of the Fund, the transition in investment policy, anticipated distribution rates, portfolio rotation, borrowings and liquidity
events. Words such as “intends,” “will,” “expects,” and “may” or similar expressions are
intended to identify forward-looking statements. These forward-looking statements are subject to the inherent uncertainties in predicting
future results and conditions. Certain factors could cause actual results to differ materially from those projected in these forward-looking
statements. Factors that could cause actual results to differ materially include changes in the economy, geo-political risks, risks associated
with possible disruption to the Fund’s operations or the economy generally due to hostilities, terrorism, natural disasters or pandemics
such as COVID-19, future changes in laws or regulations and conditions in the Fund’s operating area, unexpected costs, the ability
of the Fund to (i) transition to a diversified credit strategy within anticipated timeframes or at all, (ii) pay the targeted
distributions, (iii) obtain the applied-for exemptive relief, (iv) obtain leverage on terms satisfactory to the Fund and (v) achieve
a liquidity event, and such other factors that are disclosed in the Fund’s filings with the Securities and Exchange Commission (the
“SEC”). The inclusion of forward-looking statements should not be regarded as a representation that any plans, estimates or
expectations will be achieved. Any forward-looking statements speak only as of the date of this communication. Except as required by federal
securities laws, the Fund undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information,
future events or otherwise. Readers are cautioned not to place undue reliance on any of these forward-looking statements.
v3.23.2
X |
- DefinitionBoolean flag that is true when the XBRL content amends previously-filed or accepted submission.
+ References
+ Details
Name: |
dei_AmendmentFlag |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:booleanItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionFor the EDGAR submission types of Form 8-K: the date of the report, the date of the earliest event reported; for the EDGAR submission types of Form N-1A: the filing date; for all other submission types: the end of the reporting or transition period. The format of the date is YYYY-MM-DD.
+ References
+ Details
Name: |
dei_DocumentPeriodEndDate |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:dateItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionThe type of document being provided (such as 10-K, 10-Q, 485BPOS, etc). The document type is limited to the same value as the supporting SEC submission type, or the word 'Other'.
+ References
+ Details
Name: |
dei_DocumentType |
Namespace Prefix: |
dei_ |
Data Type: |
dei:submissionTypeItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionAddress Line 1 such as Attn, Building Name, Street Name
+ References
+ Details
Name: |
dei_EntityAddressAddressLine1 |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:normalizedStringItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- Definition
+ References
+ Details
Name: |
dei_EntityAddressCityOrTown |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:normalizedStringItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionCode for the postal or zip code
+ References
+ Details
Name: |
dei_EntityAddressPostalZipCode |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:normalizedStringItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionName of the state or province.
+ References
+ Details
Name: |
dei_EntityAddressStateOrProvince |
Namespace Prefix: |
dei_ |
Data Type: |
dei:stateOrProvinceItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionA unique 10-digit SEC-issued value to identify entities that have filed disclosures with the SEC. It is commonly abbreviated as CIK.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Exchange Act -Number 240 -Section 12 -Subsection b-2
+ Details
Name: |
dei_EntityCentralIndexKey |
Namespace Prefix: |
dei_ |
Data Type: |
dei:centralIndexKeyItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionIndicate if registrant meets the emerging growth company criteria.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Exchange Act -Number 240 -Section 12 -Subsection b-2
+ Details
Name: |
dei_EntityEmergingGrowthCompany |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:booleanItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionCommission file number. The field allows up to 17 characters. The prefix may contain 1-3 digits, the sequence number may contain 1-8 digits, the optional suffix may contain 1-4 characters, and the fields are separated with a hyphen.
+ References
+ Details
Name: |
dei_EntityFileNumber |
Namespace Prefix: |
dei_ |
Data Type: |
dei:fileNumberItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionTwo-character EDGAR code representing the state or country of incorporation.
+ References
+ Details
Name: |
dei_EntityIncorporationStateCountryCode |
Namespace Prefix: |
dei_ |
Data Type: |
dei:edgarStateCountryItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionThe exact name of the entity filing the report as specified in its charter, which is required by forms filed with the SEC.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Exchange Act -Number 240 -Section 12 -Subsection b-2
+ Details
Name: |
dei_EntityRegistrantName |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:normalizedStringItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionThe Tax Identification Number (TIN), also known as an Employer Identification Number (EIN), is a unique 9-digit value assigned by the IRS.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Exchange Act -Number 240 -Section 12 -Subsection b-2
+ Details
Name: |
dei_EntityTaxIdentificationNumber |
Namespace Prefix: |
dei_ |
Data Type: |
dei:employerIdItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionLocal phone number for entity.
+ References
+ Details
Name: |
dei_LocalPhoneNumber |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:normalizedStringItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Exchange Act -Number 240 -Section 13e -Subsection 4c
+ Details
Name: |
dei_PreCommencementIssuerTenderOffer |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:booleanItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Exchange Act -Number 240 -Section 14d -Subsection 2b
+ Details
Name: |
dei_PreCommencementTenderOffer |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:booleanItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as soliciting material pursuant to Rule 14a-12 under the Exchange Act.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Exchange Act -Section 14a -Number 240 -Subsection 12
+ Details
Name: |
dei_SolicitingMaterial |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:booleanItemType |
Balance Type: |
na |
Period Type: |
duration |
|
X |
- DefinitionBoolean flag that is true when the Form 8-K filing is intended to satisfy the filing obligation of the registrant as written communications pursuant to Rule 425 under the Securities Act.
+ ReferencesReference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Securities Act -Number 230 -Section 425
+ Details
Name: |
dei_WrittenCommunications |
Namespace Prefix: |
dei_ |
Data Type: |
xbrli:booleanItemType |
Balance Type: |
na |
Period Type: |
duration |
|
FS Energy and Power (PK) (USOTC:FSEN)
Historical Stock Chart
From Apr 2024 to May 2024
FS Energy and Power (PK) (USOTC:FSEN)
Historical Stock Chart
From May 2023 to May 2024