ThomasLloyd Energy Impact has received a notice from certain entities and funds which hold shares in the company and are affiliated with ThomasLloyd Global Asset Management (Americas) LLC (the investment manager) requisitioning a general meeting of shareholders. The meeting is required to be convened within 21 days of the requisition and to be held on a date not more than 28 days after the date of the notice convening such general meeting.
The requisition proposes an ordinary resolution that the company should continue in its present form (a continuation resolution) and special resolutions regarding the authority to make market purchases of its own shares and the notice period for general meetings.
These are the resolutions which were not put to the Annual General Meeting on 30 June 2023 prior to its adjournment. The CEO of the investment manager (acting as a corporate representative of certain ThomasLloyd Group entities with which he is associated and which hold shares in the company) and one other shareholder challenged the adjournment of that meeting with a view to voting on these resolutions.
Board not happy
The board says that it is extremely disappointed that the requisitioning shareholders are seeking that shareholders vote on a continuation resolution before the information necessary to make an informed decision on the company’s financial position and prospects is available.
The board says it still has no explanation from the investment manager as to what it knew and at what time about the RUMS project, including its financial viability and the circumstances that led up to the suspension of trading in the shares. It thinks that the requisition will only expected to delay matters further, including the lifting of the suspension [but it isn’t clear to us why that should be].
Continuation resolution
The board reminds shareholders that whether the continuation resolution passes or fails will not expedite the finalisation of the audit nor cause the suspension to be lifted.
It says: “It is in the interests of the investment manager for the continuation resolution to be passed. Shareholders should note that there are provisions in the company’s investment management agreement with the investment manager under which the company may terminate the investment manager’s appointment summarily and the company’s rights in that regard are fully reserved. However, in the event that the continuation resolution is not passed, the company will be entitled to terminate the [investment management agreement] with the investment manager summarily at any time and without further payment in respect of the investment manager’s initial five-year term of appointment.”
“The requisitioning shareholders are forcing the board to make a recommendation, and shareholders to vote, on the continuation resolution based on the information currently available and without any meaningful explanation from the investment manager as to the circumstances around the RUMS Project. Against this backdrop, the board expects to recommend that shareholders vote against the continuation resolution. The board’s detailed response to the Requisition will be announced shortly in accordance with the requirements of the Companies Act 2006.”
What happens if shareholders vote against continuation?
In the event that the continuation resolution is not passed, the board will then work to consider how best to take the company and its assets forward. The board would be able to consider a wide range of options including the reconstruction, reorganisation or potentially the winding up of the company. Under the company’s articles of association, the board’s proposals arising from that process would need to be put forward to shareholders for their approval within four months following the meeting at which the continuation resolution was proposed.
Chair’s statement
Sue Inglis, chair of ThomasLloyd Energy Impact Trust, said: “The board has continued to work very hard to progress the workstreams necessary to lift the suspension but still does not have from the Investment Manager any explanation of who within the investment manager knew what and when regarding the financial viability of the RUMS project. In addition, the board has been independently advised that there remains significant uncertainty regarding the portfolio valuation. The requisition is extremely disappointing in this context and the board expects this distraction will only serve to cause further delay to the audit which is required to lift the suspension.”
[What a mess! There are so many red flags here that I would have thought that shareholders would seize the first opportunity to ask for their money back. If, as the board seems to be suggesting, the manager is seeking to rush through the vote to get continuation approved before the full story comes out, this could backfire.]
TLEI : ThomasLloyd shareholders call for continuation vote