Aquila Energy Efficiency lost a continuation vote at the end of February 2023. The board had six months to come up with a plan for what to do next. As at 31 March 2023, the fund had:
- 38 private investments across Germany, Italy, Spain and the UK, valued at about £62.6m, and with investment maturity periods of up to 15 years;
- Cash or cash equivalents of about £33.2m, which includes £5m held by a bank as collateral for the company’s currency hedging strategy;
- Contractual obligations of about £37.0m to fund existing investments; and
- no available credit facilities
An immediate liquidation has been ruled out – the portfolio is just too complex and the contract durations too long to make this work efficiently. Instead, the board is aiming for a managed run-off whereby assets will be realised at the best value which the directors consider can be achieved within a reasonable timeframe. Given the current cash levels, size of the commitments set out above, and the expected natural run-off of investments, the board expects to be in a position to start to return capital to shareholders in the fourth quarter of 2023.
However, it will keep trying to find other strategic solutions with the potential to offer greater shareholder value sooner – such as a sale of some or all of the portfolio. The statement also says that the board will also consider any proposals which address the company’s size and liquidity – we think this is suggesting that it would consider a merger with a cash exit opportunity, for example.
AEET : Aquila Energy Efficiency AGM notice sets out realisation options