Investment trust insider on Next Energy Solar – James Carthew: NextEnergy’s recycling is a boost to renewables
News from NextEnergy Solar (NESF) that the company plans to sell some of its assets and use the proceeds to reduce debt, fund its pipeline and pay for share buybacks could be a much-needed shot in the arm for a sickly renewable energy infrastructure sector.
Share prices across the renewables sector are trading in a range from a 51.1% discount at HydrogenOne Capital Growth (HGEN) to a 5.8% premium at Gresham House Energy Storage (GRID). Only one other fund in the sector looks to be on a premium. However, this is ThomasLloyd Energy Impact (TLEI), which – very disappointingly given the potential damage it does to wider confidence – has belatedly discovered a problem with one of its investments and cannot now file its first set of annual accounts. As the accounts will be overdue next week, it has had to suspend trading in its shares, putting it in the same boat as Home Reit.
A 200MW construction-ready solar asset in India within TLEI’s Solar Arise investment may not be economically viable thanks to unbudgeted price rises for components and construction costs.
My belief is that TLEI would have had to tell the market as soon as it discovered the problem. So, the implication is that it was already planning to drag out the publication of its results to the last minute before this problem popped up. Some funds do this, but they tend to be the smaller, less well-managed types – TLEI was a £147m fund by market value. It is not a good look to starve investors of timely information.
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