GCP Infrastructure (GCP) has converted a solar equity investment into £40m of senior debt in line with its 31 March valuation. The proceeds will combine with £13m of disposals of an anaerobic digestion project and two onshore wind projects that the £634m investment company is working on, which will be used for share buybacks and debt reduction. In addition the previously announced repayment of £47m of social housing loans is expected to complete this summer. Under GCP’s capital allocation policy, capital from asset sales is returned to shareholders by buying back its shares when they stand more than 15% below net asset value.
James Carthew, head of investment company research at QuotedData, said: “This £40m solar refinancing represents more good news from GCP Infrastructure, which is making decent progress with its capital allocation policy. The share price has been slowly edging up, but the shares are still available on a 22% discount and almost 9% yield – more to go yet.”
Bluefield Solar Income (BSIF) has published the scheme document and voting forms for its proposed acquisition by biomass generator Drax (DRX). On 1 June BSIF agreed to a £548m cash bid that will generate 92.574p per share for shareholders or 94.824p per share with a 2.25p interim dividend included. That was 31% more than the 72.2p share price when BSIF went into an offer period on 4 November and is 9% less than its net asset value (NAV) of 104.52p per share at 31 March. It urged shareholders to fill in and return their proxy forms for the general meeting in Guernsey on 24 July.
QuotedData’s James Carthew said: “It is not looking as though a higher bid is going to emerge for Bluefield, so shareholders should probably vote for the scheme and collect the cash proceeds in early-mid August. It feels a bit sad that what was in my opinion one of the better-quality renewable companies is being taken out for less than its share price a year ago and more than a third below its peak. For many investors, the hardest question is going to be how to replace the lost income. On the consistency of its track record, Foresight Environmental Infrastructure might be one option.”
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