In a surprise announcement, Atrato Onsite Energy says it has entered into a conditional agreement for the sale of all of its portfolio of solar assets to a joint venture vehicle owned by Brookfield and RAIM Apollo at a headline price of £218.7m. This compares to the portfolio valuation in the NAV of £224.1m.

Shareholders will be asked to approve this and then asked to approve the voluntary liquidation of the company, with a view to distributing the net assets to shareholders as soon as reasonably practicable. It is anticipated that the liquidators will be in a position to make an initial distribution of substantially all of the net assets of the company in February 2025, being approximately two months after the expected date of liquidation/delisting.

Key Highlights

• 100 per cent. cash consideration with no financing conditions (100 per cent. equity financed)
• The new estimated net assets per share would be 80.0p, which represents:
  • a premium of approximately 25.0% to the closing price of 64.0p on 2 October 2024 and
  • a premium of approximately 19.6% to the three-month volume weighted average price of 66.9p as at 2 October 2024
• The last portfolio valuation was calculated as at 31 March 2024, resulting in a 31 March 2024 NAV of 90.0p. Two quarterly dividend payments totalling 2.74p have come out of that, but the portfolio has been earning revenue. Adding that back, 82.7p represents a discount of approximately 8.1% to the 31 March 2024 NAV. [Update 4/10 – I re-read this today and realised how spurious this is – the dividends HAVE both been paid, and – all else being equal – the NAV should not have moved from the 31 March figure, so this is an 11% plus discount to the last NAV.]

Juliet Davenport, chair commented: “The board was very pleased with the interest shown in the company. After a detailed analysis, the board determined that a sale of the portfolio to the consortium was the best means of maximising shareholder value against a backdrop of persistently wide share price discounts in the investment trust sector, the subscale nature of the company and consistent shareholder feedback to sell the portfolio. Therefore, the board unanimously considers the proposals to be in the best interests of the company and its shareholders as a whole and unanimously recommends that shareholders vote in favour of the change of investment objective and policy resolution at the general meeting.”

[You moaned, we listened, good bye – it is a shame to lose another renewable energy company, but it must be acknowledged how disappointing this has been since launch in NAV terms as well as share price terms. I wrote about it for Citywire a year ago – “It took a while to get ROOF’s IPO proceeds invested and so its first few dividends have been paid out of capital. That is not an ideal situation and I think it is one reason why the discount opened up last year and why it may persist for a while yet.” “A sizable proportion of (the portfolio) represents commitments to assets that are not yet operational and cash generative, so we are still some distance away from full coverage of ROOF’s dividend. If I were investing for income, this is not a fund that I would pick, but it should at least be on a firmer footing at some point next year”. Unfortunately, for the trust, this has come too late to save it.]

ROOF : Atrato Onsite Energy to sell entire portfolio