REG - Aquila Energy Effcn. - Proposed Tender Offer

Aquila Energy Efficiency TrustAnnouncement

19/04/2024 10:00

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RNS Number : 3376L  Aquila Energy Efficiency Trust PLC  19 April 2024

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR
INTO THE UNITED STATES OF AMERICA, CANADA, AUSTRALIA, NEW ZEALAND OR JAPAN OR
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RELEVANT LAWS OF SUCH JURISDICTION.

19 April 2024

 

Aquila Energy Efficiency Trust PLC

 

(the "Company")

Proposed Tender Offer to purchase Ordinary Shares for up to £17.5 million

at a fixed price of 94.28 pence per Ordinary Share

Introduction

On 6 March 2024, the Company announced that it intended to return value to
Shareholders by way of a Tender Offer pursuant to which Qualifying
Shareholders are invited to tender some of their Ordinary Shares. The Company
is today publishing a circular (the "Circular") in respect of proposals that
up to 18,561,732 Ordinary Shares may be purchased under the Tender Offer for a
maximum aggregate cash consideration of £17.5 million and Qualifying
Shareholders who participate in the Tender Offer will have a Basic Entitlement
to tender approximately 18.6 per cent. of the Ordinary Shares held by them at
the Record Date, rounded down to the nearest whole number, at a price of 94.28
pence per Ordinary Share.  Terms used in this announcement shall have the
same meaning as set out in the Circular.

Qualifying Shareholders may tender Ordinary Shares in excess of their Basic
Entitlement up to the total number of Ordinary Shares held by each Qualifying
Shareholder on the Record Date ("Excess Entitlement") and, to the extent that
other Qualifying Shareholders do not tender any of their Ordinary Shares, or
tender less than their Basic Entitlement, those Qualifying Shareholders may be
able to tender such Excess Entitlement through the Tender Offer. However, if
the Tender Offer is oversubscribed, the tender of any such Excess Entitlement
will only be successful to the extent that other Shareholders have tendered
less than their Basic Entitlement or tendered no Ordinary Shares and may be
subject to scaling-down.

To the extent that Qualifying Shareholders tender for less than the total
overall amount that may be returned to Shareholders pursuant to the Tender
Offer, or where the Board decides not to proceed with the Tender Offer in
accordance with terms of the Circular, the Board will consider alternative
options regarding how best to return value to Shareholders, including by way
of a share buy-back programme or by way of a distribution of dividends, taking
into consideration the then prevailing market and economic conditions and
other relevant factors at the relevant time.

The Company is seeking Shareholders' approval of the Tender Offer Resolution
at a General Meeting to be held at 11.30 a.m. on 13 May 2024.

Tender Offer

Background and reasons for the Tender Offer

Subject to the passing of the Tender Offer Resolution by Shareholders at the
General Meeting as a special resolution, the Directors will give Qualifying
Shareholders the opportunity to tender Ordinary Shares through the Tender
Offer for cash. The Tender Offer Resolution will give the Directors authority
to return up to 18,561,732 Ordinary Shares, at a price of 94.28 pence per
Ordinary Share, for a maximum aggregate cash consideration of £17.5 million.

Following the IPO of the Company in 2021, the Company deployed the funds
raised into various investments and entered into contractual commitments to
make further investments.  Since the date of the continuation vote in
February 2023, which did not pass, no new investment commitments have been
made and Aquila Capital Investmentgesellschaft mbH (the "Investment Adviser")
has, where possible, renegotiated some of the existing commitments, so as to
reduce the amount of further investment required by the Company.  As a
consequence, at 31 December 2023, the Company and its immediate investment
holding entities had contractual legal obligations in relation to existing
investments (the "Unfunded Commitments") equivalent to approximately £5.58
million (translating Euro obligations at €1.1535:£1 and including an
allowance for external transaction costs). Between 31 December 2023 and 31
March 2024, £0.51 million of those Unfunded Commitments have been added to
existing investments.

Following the Company's annual general meeting ("AGM") held in June 2023, the
Company's portfolio is being managed in accordance with the "Managed Run-Off
Resolution" as approved by shareholders at that AGM.

The Company's cash and cash equivalents as at 31 March 2024 were £28.72
million (with cash in Euro accounts converted at €1.1697:£1 and exclusive
of the £2.5 million of cash held as collateral for the Company's existing
currency hedges held in line with its strategy). Given the uncertain nature of
the timing of returns of certain of the Company's investments, combined with
upcoming cash requirements for Unfunded Commitments (referred to above), it is
important to maintain a cash buffer to ensure the Company can continue to meet
its liabilities and commitments. The Board of Directors of the Company
considers the Tender Offer to be beneficial to the Shareholders as a whole,
including, among other reasons, in that:

·          the Tender Offer is available to all Qualifying
Shareholders regardless of the size of their holding;

·          the Tender Price represents a premium of 65.4 per cent.
to the Company's Ordinary Shares closing price of 57.00 pence on 18 April 2024
(being the Latest Practicable Date);

·          the Tender Offer provides Qualifying Shareholders who
wish to reduce their holdings of Ordinary Shares with an opportunity to do so
at a price which reflects the Company's last published net asset value per
share;

·          the Tender Offer enables Ordinary Shares to be sold free
of commissions or charges that would otherwise be payable if Qualifying
Shareholders were to sell their Ordinary Shares through their broker; and

·          the Tender Offer permits Shareholders who wish to retain
their current investment in the Company and their Ordinary Shares to do so, as
no Shareholder is required to participate in the Tender Offer, and thus
providing Shareholders with flexibility.

As announced on 6 March 2024, as and when sufficient cash has been
accumulated, the Board's current intention is there will be further tender
offers to shareholders.

Principal Terms of the Tender Offer

Subject to the terms and conditions contained in the Circular, Stifel will
implement the Tender Offer by acquiring, as principal, the successfully
tendered Ordinary Shares at the Tender Price. Ordinary Shares purchased by
Stifel pursuant to the Tender Offer will be purchased by Stifel in on-market
purchases in accordance with the provisions of the Act and the rules of the
London Stock Exchange and the FCA. Immediately following completion of the
Tender Offer, Stifel shall sell such Ordinary Shares to the Company, at a
price per Ordinary Share equal to the Tender Price, pursuant to the Repurchase
Agreement. Purchases of Ordinary Shares by the Company pursuant to the
Repurchase Agreement will also be on-market purchases in accordance with the
provisions of the Act and the rules of the London Stock Exchange and the FCA.
All of the Ordinary Shares purchased by the Company pursuant to the Repurchase
Agreement in connection with the Tender Offer will be cancelled. Qualifying
Shareholders must consider carefully all of the information contained in the
Circular as well as their personal circumstances when deciding whether to
participate in the Tender Offer.

The maximum number of Ordinary Shares that may be purchased under the Tender
Offer, being up to 18,561,732 Ordinary Shares, will equate to approximately
18.6 per cent. of the Issued Ordinary Share Capital at the Tender Offer Record
Date, for a maximum aggregate cash consideration of £17.5 million ("Maximum
Tendered Ordinary Shares"). As at 18 April 2024, being the Latest Practicable
Date, there are 100,000,000 Ordinary Shares in issue with no Ordinary Shares
being held in treasury.

If the Maximum Tendered Ordinary Shares are repurchased by the Company for
cancellation pursuant to the Tender Offer, the total number of Ordinary Shares
of the Company in issue following such cancellation will be 81,438,268
Ordinary Shares. Successfully tendered Ordinary Shares will be cancelled and
will not rank for any future dividends.

How to Participate in the Tender Offer

Qualifying Shareholders are not obliged to tender any Ordinary Shares if they
do not wish to do so. If no action is taken by Qualifying Shareholders, there
will be no change to the number of Ordinary Shares that they hold and they
will receive no cash as a result of the Tender Offer.

Each Qualifying Shareholder who wishes to participate in the Tender Offer is
entitled to submit a tender to sell some or all of their Ordinary Shares.

The total number of Ordinary Shares tendered by any Qualifying Shareholder
should not exceed the total number of Ordinary Shares registered in the name
of that Qualifying Shareholder at the Record Date. For example, a Qualifying
Shareholder may decide to tender fifty per cent. (50%) of their Ordinary
Shares, but if a Qualifying Shareholder returned a tender purporting to offer
for sale more than one hundred per cent. (100%) of their Ordinary Shares, they
would be deemed to have tendered only the number of Ordinary Shares actually
owned by that Shareholder on the Record Date, with the tender in respect of
any additional Ordinary Shares being deemed invalid.

The Tender Offer will open on 19 April 2024. The Tender Offer will close at
1.00 p.m. on 10 May 2024 and tenders received after that time will not be
accepted (unless the Closing Date is extended by the Company in accordance
with the Tender Offer).

Tender Forms which have been, or are deemed to be, validly and properly
completed (for Ordinary Shares held in certificated form) and submitted to
Computershare Investor Services PLC acting as Receiving Agent and TTE
Instructions which have settled (for Ordinary Shares held in uncertificated
form) will become irrevocable and cannot be withdrawn at or after 1.00 p.m. on
10 May 2024.

Purchase of Ordinary Shares

Successfully tendered Ordinary Shares will be purchased from Qualifying
Shareholders by Stifel (acting as principal), free of commission and dealing
charges.

Following the purchase of any Ordinary Shares from Qualifying Shareholders by
Stifel such Ordinary Shares will be repurchased by the Company from Stifel
pursuant to the terms of the Repurchase Agreement and subsequently will be
cancelled by the Company. Any rights of Qualifying Shareholders who do not
participate in the Tender Offer will be unaffected by the Tender Offer.

All Shareholders who tender Ordinary Shares will receive the Tender Price,
subject, where applicable, to the scaling-down arrangements described in the
Circular.

If more than the overall limit of Ordinary Shares that may be repurchased
pursuant to the Tender Offer are validly tendered by Qualifying Shareholders
and the Tender Offer is therefore oversubscribed, acceptances of validly
tendered Ordinary Shares will be scaled-down to determine the extent to which
individual tenders are accepted. Accordingly, where scaling-down applies,
beyond a Qualifying Shareholder's Basic Entitlement, there is no guarantee
that all of the Ordinary Shares which are tendered by Qualifying Shareholders
will be accepted for purchase.

Basic Entitlement

Tenders in respect of approximately 18.6 per cent. of the Issued Ordinary
Share Capital at the Tender Offer Record Date will be accepted in full at the
Tender Price and will not be scaled down even if the Tender Offer is
oversubscribed. This percentage is known as the "Basic Entitlement". This
percentage assumes that valid tenders up to, or in excess of, the Maximum
Tendered Ordinary Shares have been submitted by Qualifying Shareholders and
accepted by the Company. If the Company revises the aggregate value of the
Tender Offer to less than the maximum amount of £17.5 million (and,
therefore, less than the Maximum Tendered Ordinary Shares), then the Basic
Entitlement percentage shall be proportionately scaled-down in accordance with
the Circular.

Qualifying Shareholders may tender such number of Ordinary Shares in excess of
their Basic Entitlement up to the total number of Ordinary Shares held by each
Qualifying Shareholder on the Record Date and, to the extent that other
Qualifying Shareholders do not tender any of their Ordinary Shares, or tender
less than their Basic Entitlement, those Qualifying Shareholders may be able
to tender such Excess Entitlement through the Tender Offer.

However, if the Tender Offer is oversubscribed, the tender of any such Excess
Entitlement will only be successful to the extent that other Shareholders have
tendered less than their Basic Entitlement or tendered no Ordinary Shares and
may be subject to scaling-down. For this purpose, Qualifying Shareholders
should note that the term "oversubscribed" means that the number of Ordinary
Shares validly tendered pursuant to the Tender Offer either: (i) exceeds the
Maximum Tendered Ordinary Shares that may be repurchased by Stifel (acting as
principal) pursuant to the Tender Offer; or (ii) where the Company has
(pursuant to the terms of the Circular) exercised its discretion to accept
valid tenders in an amount that is less than the aforesaid overall limit,
exceeds such number of Ordinary Shares that the Company has determined that it
will accept pursuant to the Tender Offer which is less than such overall
limit.

Circumstances in which the Tender Offer may not proceed

There is no guarantee that the Tender Offer will take place. The Tender Offer
is conditional on the passing of the Tender Offer Resolution as set out in the
Notice of General Meeting and on the satisfaction of the other Tender
Conditions specified in the Circular.

The Company has reserved the right at any time prior to the announcement of
the results of the Tender Offer, with the prior consent of Stifel, to extend
the period during which the Tender Offer is open and/or vary the aggregate
value of the Tender Offer, based on economic or market conditions and/or other
factors, subject to compliance with applicable legal and regulatory
requirements. The Company has also reserved the right, in certain
circumstances, to require Stifel not to proceed with the Tender Offer. Any
such decision will be announced by the Company through a Regulatory
Information Service.

To the extent that Qualifying Shareholders tender for significantly less than
the total amount that may be returned to Shareholders pursuant to the Tender
Offer, or where the Company decides not to proceed with the Tender Offer, the
Company will consider alternative options regarding how best to return value
to Shareholders, including by way of a share buy-back programme or by way of
distribution of dividends, taking into consideration the then prevailing
market conditions and other relevant factors at the relevant time.

General Meeting to approve the Tender Offer Resolution

The Tender Offer requires the approval by Shareholders of the Tender Offer
Resolution at a General Meeting of the Company. For this purpose, the Company
is convening the General Meeting for 11.30 a.m. on 13 May 2024 to consider
and, if thought fit, pass the Tender Offer Resolution to authorise and to
approve the terms under which the Tender Offer will be effected.

The Tender Offer Resolution must be passed on a poll by at least seventy-five
per cent. (75%) of those Shareholders present in person or by proxy and
entitled to vote at the General Meeting. The Company will not purchase
Ordinary Shares pursuant to the Tender Offer unless the Tender Offer
Resolution is duly passed.

Taxation

A summary of the taxation consequences of the Tender Offer for UK resident
Shareholders is set out in ‎the Circular.

Shareholders are strongly advised to obtain independent tax advice regarding
their own tax position.

Procedure for tendering Ordinary Shares

Only those Qualifying Shareholders who hold their Ordinary Shares in
certificated form and who wish to participate in the Tender Offer should
complete and return a Tender Form. Those Qualifying Shareholders who hold
their Ordinary Shares in uncertificated form and who wish to tender Ordinary
Shares do not need to complete or return a Tender Form.

Qualifying Shareholders who wish to tender Ordinary Shares and hold their
Ordinary Shares in certificated form should complete the Tender Form in
accordance with the instructions set out therein, and return the completed
Tender Form to the Receiving Agent at Computershare Investor Services PLC,
Corporate Actions Projects, Bristol, BS99 6AH so as to be received as soon as
possible and, in any event, by no later than for 1.00 p.m. on 10 May 2024.
Qualifying Shareholders should at the same time return the share
certificate(s) and/or other document(s) of title in respect of any Ordinary
Shares tendered which are in certificated form.

Qualifying Shareholders who wish to tender Ordinary Shares and who hold their
Ordinary Shares in uncertificated form (that is, in CREST) should submit the
appropriate TTE Instruction in CREST as set out in the Circular so as to be
received as soon as possible and, in any event by no later than 1.00 p.m. on
10 May 2024.

Shareholders should note that, once tendered, Ordinary Shares may not be sold,
transferred, charged or otherwise disposed of other than in accordance with
the Tender Offer.

Validity of Tender Forms or TTE Instructions

Tender Forms or TTE Instructions which are received by the Receiving Agent
after 1.00 p.m. on 10 May 2024 or which at that time are incorrectly completed
or not accompanied by all relevant documents or instructions may be rejected
and returned to relevant Shareholders or their appointed agents, together with
any accompanying share certificate(s) and/or other document(s) of title.

Stifel reserves the right to treat as valid Tender Forms or TTE Instructions
which are not entirely in order and which are not accompanied (in the case of
Ordinary Shares held in certificated form) by the relevant share
certificate(s) and/or other document(s) of title or a satisfactory indemnity
in lieu thereof and shall be entitled (at their sole discretion) to accept
late Tender Forms or TTE Instructions.

Notification of interests

Under the Articles of association of the Company and applicable law,
Shareholders are required to notify the Company of their interests in Ordinary
Shares. Following the Company's purchase of Ordinary Shares from Stifel
pursuant to the terms of the Repurchase Agreement, and regardless of whether a
Shareholder tenders any or all of their Ordinary Shares pursuant to the terms
of the Tender Offer, the number of Ordinary Shares in which a Shareholder is
interested when taken as a percentage of the Company's aggregate Issued
Ordinary Share Capital as a whole may change, which may give rise to an
obligation under the Disclosure and Transparency Rules on the part of such
Shareholder to notify the Company of their interest in Ordinary Shares as soon
as possible and in any case within two trading days of becoming aware, or
being deemed to have become aware, of such change.

Board intentions to tender Ordinary Shares

Each of the Directors who are also Shareholders have confirmed that they
intend to tender a portion of their current individual beneficial holding of
Ordinary Shares equal to their Basic Entitlement through the Tender Offer.

The Circular will today be posted to the shareholders and is also available on
the Company website, https://www.aquila-energy-efficiency-trust.com. A copy of
the Circular will also be filed and available for inspection at the National
Storage Mechanism https://data.fca.org.uk/#/nsm/nationalstoragemechanism
shortly.

 

Expected Timetable

 Announcement of the Tender Offer, publication of the Circular and the Notice    19 April 2024
 of General Meeting
 Tender Offer opens                                                              19 April 2024
 Latest time and date for receipt of Forms of Proxy                              11.30 a.m. on 9 May 2024
 Latest time and date for receipt of Tender Forms and share certificates in       1.00 p.m. on 10 May 2024
 relation to the Tender Offer (i.e. close of Tender Offer)
 Latest time and date for receipt of TTE Instructions in relation to the Tender  1.00 p.m.  on 10 May 2024
 Offer (i.e. close of Tender Offer)
 Tender Offer Record Date                                                         6.00 p.m. on 10 May 2024
 General Meeting                                                                 11.30 a.m. on 13 May 2024
 Announcement of results of the General Meeting                                  13 May 2024
 Announcement of results of the Tender Offer                                     13 May 2024
 Purchase of Ordinary Shares under the Tender Offer                              13 May 2024
 CREST accounts credited for revised, uncertificated holdings of Ordinary         by 15 May 2024
 Shares
 CREST accounts credited in respect of Tender Offer proceeds for                 by 15 May 2024
 uncertificated Ordinary Shares
 Cheques and BACs advice despatched in respect of Tender Offer proceeds for      week commencing 20 May 2024
 certificated Ordinary Shares
 Return of share certificates in respect of unsuccessful tenders of               by 20 May 2024
 certificated Ordinary Shares
 Despatch of balancing share certificates (in respect of certificated              week commencing 20 May 2024
 Ordinary Shares) for revised, certificated holdings in the case of partially
 successful tenders

 

 

For further information, please contact:

 Aquila Capital (Investment Adviser)  Via Buchanan

 Stifel Nicolaus Europe Limited (Corporate Broker)                 020 7710 7600

 Edward Gibson-Watt, Rajpal Padam, Madison Kominski

 Buchanan (Financial PR)                                           020 7466 5000

 Charles Ryland, George Beale

 Apex Listed Companies Services (UK) Limited (Company Secretary)   020 3327 9720

 Sinead van Duuren

 

 

The Company's LEI is 213800AJ3TY3OJCQQC53

 

This announcement is not for publication or distribution, directly or
indirectly, in or into, or from the United States or any other jurisdiction
where to do so would violate the laws in that jurisdiction. This announcement
does not constitute or form part of any offer to purchase, or invitation to
sell, Ordinary Shares in the United State or any jurisdiction in which such
offer or invitation is unlawful. Any failure to comply with these restrictions
or requirements may constitute a violation of the securities or other laws of
such jurisdiction.

This announcement may contain "forward-looking statements" with respect to
certain of the Company's plans and its current goals and expectations relating
to its future financial condition, performance, strategic initiatives,
objectives and results. Forward-looking statements sometimes use words such as
"aim", "anticipate", "target", "expect", "estimate", "intend", "plan", "goal",
"believe", "seek", "may", "could", "outlook" or other words of similar
meaning. By their nature, all forward-looking statements involve risk and
uncertainty because they relate to future events and circumstances which are
beyond the control of the Company. As a result, the actual future financial
condition, performance and results of the Company may differ materially from
the plans, goals and expectations set forth in any forward-looking statements.
Any forward-looking statements made in this announcement by or on behalf of
the Company speak only as of the date they are made. The information contained
in this announcement is subject to change without notice and except as
required by applicable law or regulation, the Company expressly disclaims any
obligation or undertaking to publish any updates or revisions to any
forward-looking statements contained in this announcement to reflect any
changes in the Company's expectations with regard thereto or any changes in
events, conditions or circumstances on which any such statements are based.

Neither the content of the Company's website (or any other website) nor the
content of any website accessible from hyperlinks on the Company's website (or
any other website) is incorporated into or forms part of this announcement.

 

 

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