Triple Point Energy Transition proposes orderly wind-up

In a stock exchange notice today (13 December), the trust said the decision had drawn on independent financial advice and shareholder feedback to determine its future strategic direction. 

The board said that despite making “significant progress” in achieving the goals set in its October 2020 launch, external macroeconomic challenges, coupled with sub-optimal liquidity, have led its shares to consistently trade below net asset value since January 2022. 

This persistent discount has hampered the trust’s ability to raise capital and capitalise on the advantages of increased scale, it said. 

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“A key requirement identified by the company’s shareholders is the need for increased liquidity in the company’s shares which can only realistically be achieved through greater scale,” it said. 

“This is difficult to achieve at the current discount to NAV, which, the board believes, does not reflect the intrinsic value of the portfolio, yet remains persistent and entrenched.”

According to the Association of Investment Companies, TENT holds £98.2m in assets but is trading at a 41.4% discount to NAV. 

The board said that although the portfolio had performed well and met its objectives, it engaged a third party to explore strategic options to respond to the discount and current market conditions.

After assessing the report, the board, while open to other options, decided that an orderly realisation of assets and the return of associated realised capital will best optimise shareholder value.

The board is planning a general meeting to seek shareholder approval for the adoption of a revised investment policy to allow the liquidation of assets and the return of capital.

Details of these proposals will be outlined in a circular, along with a notice for the general meeting, anticipated to be sent to shareholders in the first quarter of 2024.

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Chair John Roberts said: “We have built a diverse portfolio of assets which are both generating robust, contractually underpinned cash flows in line with expectations supporting a fully covered dividend and contributing to the energy transition. 

“However, we have listened to and recognise shareholder frustration at the company’s undeserved, yet persistent discount to NAV.”

Roberts said the board would recommend shareholders to vote in favour of the orderly wind-up, given the likelihood of continued market volatility and the negative impact that will have on the trust’s future ability to scale up.