US Solar Fund (USF), the £98m renewables fund run by Amber Infrastructure, will “pause regular dividends” after a 0.255 cents per share fourth quarter dividend. This is to conserve cash after an 11.7% fall in generation caused by unplanned outages last year left its pay-outs uncovered.
Annual results showed net asset value (NAV) fell 4.1% to $186.2m or $0.60 per share from $194.2m or $0.63 per share as rising energy price forecasts and electricity demand were offset by the performance of the portfolio and the level of capital investment required.
In November, the company considered putting its seven operational assets up for sale but decided market conditions were not conducive to achieving value for shareholders, said chair Gill Nott.
The company faces a continuation vote at its annual general meeting (AGM) on 28 May due to its shares trading at an average discount of more than 10% to NAV.
Our view
James Carthew, head of investment company research at QuotedData, said: “US Solar was already trading on a 50% discount before its decision to pause its dividend. Whether the news tips investors towards voting for discontinuation at May’s AGM remains to be seen. However, conserving cash to pay down debt isn’t a bad idea given the circumstances.”
