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."
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For
Further Information
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Sustainable Development Capital LLP
Jonathan Maxwell
Purvi Sapre
Eugene Kinghorn
Ben Griffiths
Tom Hovanessian
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T: +44 (0) 20 7287 7700
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Jefferies International Limited
Tom Yeadon
Gaudi le Roux
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T: +44 (0) 20 7029 8000
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TB
Cardew
Ed Orlebar
Henry Crane
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T: +44 (0) 20 7930 0777
M: +44 (0) 7738 724 630
E: SEEIT@tbcardew.com
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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.
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.
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