ThomasLloyd Energy Impact has provided a valuation update relating to the status of its Rewa Ultra Mega Solar Park Project which led to the suspension of the fund’s shares back in in April. We have written about the situation that has unfolded over the last few months here, and here.
The update relates to the appointment of PricewaterhouseCoopers (PwC) who were brought on to assist the company’s AIFM, Adepa Asset Management and the board with the finalisation of the valuation of the company’s portfolio as at 31 December 2022. PwC’s draft report has now been received by Adepa and the board who will now work with the investment manager, Kroll, the company’s auditor, and Deloitte, to finalise the portfolio valuation. Given the nature and complexity of the issues, the board has said it is still not currently able to provide a timetable for the publication of the company’s annual report and accounts for the year ended 31 December 2022 . However, the board has noted that the portfolio valuation could reflect a downward movement relative to the 30 September 2022 valuation (and the draft valuations as at 31 December 2022 provided to the board) and that this downward movement could be material. This would be in addition to the US$8.2 million expected to be written off as a result of not proceeding with construction of the 200 MW plant which is held by a special purpose subsidiary of SolarArise, and an expected adjustment to the valuation of SolarArise for the fair value of potential non-completion liabilities in respect of the RUMS Project. As announced on 6 June 2023, these potential non-completion liabilities could be up to approximately INR 2,750 million (US$33.5 million), before considering any impact of mitigating actions.
In accordance with the FCA’s Listing Rules, the temporary suspension of listing and trading in the company’s shares which became effective at 7.30 a.m. on 25 April 2023 cannot be lifted before the company publishes its annual report. The publication of the annual report is dependent on a number of workstreams, in particular (i) the finalisation of the portfolio valuation, (ii) the completion to the satisfaction of the board and Deloitte of an investigation into the circumstances around the RUMS Project in particular, which led to the temporary share suspension and (iii) the subsequent completion of the audit by Deloitte. Deloitte has informed the board that it will need to perform enhanced audit procedures to reflect the change in circumstances of the company.
[QD Comment :This update will provide little comfort for investors who remain mostly in the dark around the future of the fund and the likely financial impact of what has been a clear failure of management. The situation is made even worse considering we are now almost three months on from the suspension of TLEI’s shares and we appear no closer to timetable for the publication of the company’s annual report and accounts which would allow trading to resume. As time goes by, not only are investors on the hook for what will likely be a considerable de-rating of TLEI’s shares but they also remain locked out of access to their capital, making the lack of clarity around this release even more disappointing.]
TLEI : Shareholders of ThomasLloyd Energy Impact still in the dark