Gore Street Energy Storage (GSF) has said it will put forward two continuation votes requisitioned by Saba Capital last week for its AGM on 16 September.
In a short update, the battery fund said, although it was not “obliged” to proceed with the resolutions as drafted by the activist hedge fund holding 17% of its shares, “in the interest of complete transparency” it would include them in the agenda of the meeting.
They comprise of an ordinary resolution stating “that the company shall not continue in existence as an investment company”; and a special resolution saying that if the first resolution is passed, within three months the company shall put forward proposals to be “wound up, liquidated, reorganised or unitised”.
The GFS board stated its strong belief that pursuing the recovery strategy announced on 17 March was the best way to deliver maximum value to shareholders.
It had already committed to holding a continuation vote should the company fail to meet any of the key performance indicators, it said.
“A comprehensive explanation of the board’s unanimous position recommending that shareholders vote against the requisitioned resolutions at this time will be communicated to all shareholders in due course,” GSF said.
GSF, a £232m investment trust launched eight years ago, last month shocked investors with a 14.8% fall in net asset value (NAV) in the first three months of the year. That took the portfolio’s decline to just over 27% in the year to 31 March. At 45.8p, GSF stands on a 38% discount to its 74.9p NAV per share.
Our view
James Carthew, head of investment company research at QuotedData, said: “I don’t really have a problem with Gore Street Energy Storage adding a continuation vote to its list of AGM resolutions, maybe this should be an annual thing for a while. However, I won’t be voting for it at this stage. While the recent results were disappointing, I struggle to see how us shareholders would achieve a decent upside from a liquidation. Anyone who fancies the idea can bid for all or part of the business at any stage, creating a forced sale situation does investors no favours. The board and the management team have set out a plan to add value to the exiting portfolio, I would like to see that play out for a little while longer.”
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