Foresight Solar’s board said that it was considering a range of strategic options to deliver value to shareholders, having engaged with shareholders.
This follows investors voting against its discontinuation back in June where 24.4% voted for the discontinuation of the fund.
The board said that some have expressed a desire for liquidity, while others were seeking ongoing exposure to the listed renewables sector through a vehicle with greater secondary market liquidity and scale to drive efficiencies. The board said it would balance these objectives and deliver value to shareholders in an efficient and effective manner by exploring all options available to it.
[QD comment: It would appear to us that some form of merger could be on the cards – perhaps with the other Foresight fund (Foresight Environmental – FGEN) – with a cash exit option for investors that want out. Of course, a range of other options could be explored.]
Alex Ohlsson, chair, said: “We are cognisant of the challenges our shareholders face. We are urgently adapting to new, complex times and will continue to engage with shareholders as we consider a range of strategic options while continuing to deliver on our near-term objectives.
“I would like to thank shareholders for their ongoing engagement and support, and the Board looks forward to updating them further in due course”.
Foresight Solar also posted a flat NAV of 112.3p per share over the quarter to 31 December 2024 (from 112.6p at September 2024). Higher power price forecasts and inflation expectations, along with share buybacks, balanced below-expectation solar resource and forex movements.
Poor irradiation across markets continued with the UK experiencing its most overcast year since the company’s inception, contributing to global electricity production 7.0% below budget for the 12 months.
The sale of the company’s Australian portfolio is now expected to sign during the summer of 2025. Post-period, the investment manager agreed power price fixes at NAV-accretive levels for 2025 and 2026. Based on current forecasts, net dividend cover for 2025 is expected to be 1.3x.
In a busy day of announcements from the company, it also said that it had revised its investment management fee. From 1 March the manager’s fee will be based on an equal weighting of the average of the closing daily market capitalisation during each quarter and the published NAV for the quarter (as opposed to the current arrangements of NAV on a standalone basis).
The percentage rates applied to each tier of weighted value will also be reduced to 0.95% up to £500m (from 1.0% currently) and 0.8% over £500m (from 0.9%). The fee calculation will be capped to the lower of the new arrangement and a calculation based solely on NAV.
The move is expected to generate potential annualised savings of £1.2m (19%) against the old arrangement.
The board also announced that it intends to appoint Tony Roper as chair in September of this year, when Alex Ohlsson will step down. As previously announced, Chris Ambler will not stand for re-election at the annual general meeting in June, and Paul Masterton will be appointed senior independent director upon his retirement.
