Hydrogen Capital Growth (HGEN), the suspended renewables fund hit by the collapse of fuel cell producer Bramble last week, has just £1.1m cash left with which to pursue its wind-down and salvage something for shareholders.
After a delay, half-year results published today will enable the £33m investment trust to apply for a resumption in trading in its shares that were suspended at 25.5p in September.
However, the report paints a bleak picture for a fund which dismissed its previous manager HydrogenOne Capital in July, saying its partners John Joseph Traynor and Richard Hulf refused to cut their management fee despite overseeing a 70% plunge in the company’s shares since launch in 2021.
Their contract was ended after the fund’s fourth anniversary when doing so avoided paying a termination fee, chair Simon Hogan said.
HGEN’s share price discount, which had ballooned to 70%, has now reduced to 38% as a result of NAV per share being slashed by 54% to 41.5p. The reduction includes the £11m write-off of Bramble and reflects the precarious position of its other unquoted companies amid a funding freeze by institutional investors.
However, the gulf to NAV is likely to widen again if the share price falls when trading in the stock resumes.
Hogan said visits by the board to Bramble and other HGEN companies Cranfield and HiiROC over the summer had revealed the assumptions of its former manager were too optimistic.
As a result, the new managers at RWC had hiked discount valuation rates from 12.2% in March to 22.9%, which dramatically lowered valuations.
Hogan said the board and RWC were working to ensure the best outcome for shareholders who he urged to vote in favour of winding down the company at a general meeting on 1 December.
“I must emphasise that the group’s cash position remains challenged at the time of writing, with cash of £1.1m as at 30 September, which gives working capital until early in 2026. However, we are pursuing options that could unlock funding for the company, and the board will update on this as and when appropriate,” he said.
Our view
Matthew Read, senior analyst at QuotedData, said: “Whilst shareholders will be pleased that HGEN has finally published its interim results, along with its September NAV, which should hopefully see its share suspension lifted, the figures do not make for comfortable reading: over the first half of 2025, NAV per share fell 54.1% to 41.48p – HGEN’s NAV fell from £116.4m to £53.4m, driven by a £61.5m write-down of the private hydrogen portfolio as discount rates were sharply increased and more conservative assumptions applied across core holdings – followed by an additional 17.5% drop in NAV to 34.23p at 30 September.
“With Sunfire, Elcogen, HiiROC and Strohm now accounting for the bulk of remaining value, and several portfolio companies still dependent on fresh – and often dilutive – funding, HGEN has effectively moved from being a growth vehicle into a concentrated special situations portfolio with a very tight cash position.
“In that context, the proposed shift to a managed realisation strategy, the appointment of Redwheel and the use of an independent valuer look like pragmatic steps to maximise what can be recovered. There is clear upside if the key assets can execute and attract capital on reasonable terms, but investors should recognise that outcomes from here are highly sensitive to company-specific developments and the board’s ability to avoid forced, value-destructive exits in a still-fragile part of the clean energy ecosystem.”
