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QuotedData’s morning briefing 11 April 2022

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In QuotedData’s morning briefing 11 April 2022:

  • Foresight Solar (FSFL) has reached final approval for the portfolio refinance of the Oakey 1 Solar Farm (O1) and Longreach Solar Farm (LR) portfolios with ANZ and Deutsche Bank for a term facility of approximately A$59m plus a debt service reserve facility of approximately A$1m. The portfolio will predominantly be hedged up to 10 years. FSFL’s total outstanding debt is approximately £534m, representing 45.6% of gross asset value of the company and its subsidiaries based on its GAV on 31 December 2021 of £1.1bn.
  • SDCL Energy Efficiency Income (SEIT) has completed the acquisition of an 80% equity interest in a high-efficiency and operational biomass cogeneration plant, Sociedade de Iniciativa e Aproveitamentos Florestais – Energia, (SIAF) in Portugal for approximately €22m, from Capwatt. Furthermore, SEIT has delivered an additional €15m to SIAF to part pay down its existing project finance green bond facility. SIAF generates heat and power from sustainably sourced biomass and supplies critical onsite heat to an industrial facility manufacturing medium-density fibreboard owned by Sonae Arauco PT, on a take-or-pay basis. The acquisition has been funded from existing cash reserves. Meanwhile, SEEIT and Capwatt have signed a Heads of Terms to focus on the joint development and acquisition of energy efficiency projects across Iberia.
  • Scottish Oriental Smaller Companies (SST) has posted its half-year report for the six months to 28 February 2022, during which time its NAV per share decreased by 2.8% while share price increased by 1.2%. By comparison, the MSCI AC Asia ex Japan Small Cap Index declined by 4.5%. A dividend of 11.5p per share was paid for the year ending 31 August 2021. The chair said: ‘After a prolonged period of disruption, most Asian economies are finally emerging from the impact of Covid-19,  with the notable exception of China which is persevering with its zero-covid policy. The recovery is particularly evident in Indonesia and the Philippines, where consumer demand is gradually improving after a severe disruption over the last two years. Scottish Oriental has a large exposure to these countries, and its holdings here should benefit from a gradual recovery in consumer demand. Businesses across markets are now facing an increasing challenge from rising inflation. Historically, we have observed that such periods lead to industry consolidation among market leaders. We are confident about the performance of the Company’s holdings during this period, due to their market leading positions, pricing power and strong balance sheets. Our holdings have witnessed several such periods in the past and have emerged successfully in each instance. We are excited by the prospects of the portfolio, with the expectation of a recovery in earnings, median debt to equity of 0% and attractive valuations. As the excesses observed in financial markets in recent years led by endless liquidity are showing signs of finally abating, we believe that our investment process with a focus on capital preservation will hold the Company in good stead in more challenging market conditions.’
  • Castelnau Group (CGL) has posted its first set of final results for the year to 31 December 2021. During this time, the trust achieved an NAV total return of -6.5% against a 2.5% return from its benchmark. The main contributors to the underperformance were holdings, Dignity and Hornby. Dignity represents 35% of the portfolio and had a -14% price movement while Hornby represents 22% of the portfolio and had a -1.2% price movement.
  • Grit Real Estate Income Group (GR1T) has progressed with the acquisition of shares in a development company (Gateway Real Estate Africa – GREA) and asset manager (Africa Property Development Managers APDM) as detailed in its equity raise in December last year. It now owns a 77.95% stake in APDM and 26.29% of GREA. Additionally, Grit has committed to acquiring a further 8.72% of GREA by 31 July 2022 for a further payment of $19.44m and has the option to increase it by another 13.61% by 15 December 2022 (both payable in either cash and/or by the issue of new shares), which would increase Grit’s direct shareholding in GREA to 48.62%. Furthermore, Grit’s total (direct and indirect) shareholding in GREA would increase to 51.66% following the issue of APDM’s 10.0% free carry in GREA, which is to be issued to APDM upon the achievement of minimum performance requirements issued in December 2022.

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