REG - Foresight Solar Fund - Corporate and Strategic Update

Foresight Solar FundAnnouncement

18/02/2025 07:15

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RNS Number : 4243X  Foresight Solar Fund Limited  18 February 2025

18 February 2025

 

Foresight Solar Fund Limited

("Foresight Solar", "FSFL" or the "Company")

 

Corporate and Strategic Update

 

·    Revised investment management fee generating substantial cost savings

·    Board succession - including future Chairman and Senior Independent
Director appointments

·    Ongoing Shareholder dialogue to deliver Shareholder value through
strategic change

 

Foresight Solar, the fund investing in solar and battery storage assets to
build income and growth, is pleased to announce alongside its quarterly Net
Asset Value (NAV), published this morning, various corporate and strategic
updates.

 

(1) Changes to investment manager fee basis and tiering

The Board and the Investment Manager are acutely aware of the growing
preference from investors for management fee structures to more closely
reflect the share price performance experienced by shareholders. To that end,
the Board and the Investment Manager have re-negotiated the investment
management fee arrangements to reflect this and deliver substantial cost
savings to the Company.

 

Under the existing fee arrangements, the Investment Manager receives an annual
management fee calculated at the rate of 1% p.a. of NAV up to £500m and 0.9%
p.a. of NAV greater than £500m. This is payable quarterly in arrears and is
calculated based on the published quarterly NAV for the period.

 

The new arrangements reflect two significant improvements:

 

(1)  rather than being applied to NAV on a standalone basis, the new
management fee will be applied to an equal weighting of (i) the average of the
closing daily market capitalisation during each quarter and (ii) the published
NAV for the quarter; and

 

(2)  in addition to the change in basis, the Board has agreed that the
percentage rates applied to each tier of weighted value will be reduced to
0.95% up to £500m and 0.8% over £500m.

 

The revised arrangements will apply from 1 March 2025. The fee calculation
will be capped such that it is the lower of the new arrangement and a
calculation based solely on Net Asset Value, as per the old arrangement.

 

The tables below reflect the old and new arrangements:

 

Old arrangement

 Up to £500m          Net Asset Value  1%
 In excess of £500m   Net Asset Value  0.9%

 

New arrangement

 Up to £500m        Equally weighted NAV and market capitalisation    0.95%
 In excess of 500m  Equally weighted NAV and market capitalisation    0.8%

 

Impact on the Company and further details

By way of illustration, assuming a share price of 77.7p and market
capitalisation of £436.3m, being the closing values on 17 February 2025, and
the current NAV as at 31 December of £634.4m, the changes represent a
potential annualised saving of c.£1.2m (19%) against the old arrangement.

 

(2) Succession planning

Following the recruitment of two new Directors in 2024, the Board announces
its intention to appoint Tony Roper as Chair in September of this year, when
Alex Ohlsson will step down from his current role. 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 Mr
Ambler's retirement.

 

(3) Market backdrop and strategic options

The Board is acutely aware of the unprecedented market challenges which the
listed renewable infrastructure sector and Foresight Solar are currently
experiencing. While the Board remains confident in Foresight Solar's portfolio
and took early actions to respond to the market environment, such as
undertaking a sizeable share buyback programme, the Board is aware that in the
near term this by itself is unlikely to lead to a re-rating of shares.

 

The Board has actively engaged with Shareholders over recent months and is
keen to engage further. Shareholders have expressed a range of views to the
Board. While some have expressed a desire for liquidity, others are seeking
ongoing exposure to the listed renewables sector through a vehicle with
greater secondary market liquidity and scale to drive efficiencies. The
Board's role is to balance these objectives and deliver value to Shareholders
in an efficient and effective manner by exploring all options available.

 

Alex Ohlsson, Chairman of Foresight Solar, said: "We are pleased that we have
been able to negotiate a new fee arrangement, which better reflects the
current market conditions and investor sentiment.

 

"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".

 

For more information, follow Foresight Solar on LinkedIn
(https://www.linkedin.com/showcase/foresight-solar/) or contact:

 

 Foresight Group                  +44 (0)20 3911 2318

 Matheus Fierro

 (fsflir@foresightgroup.eu)

 Jefferies International Limited  +44 (0)20 7029 8000

 Gaudi Le Roux

 Harry Randall

 Singer Capital Markets           +44 (0)20 7496 3000

 Alaina Wong

 Sodali & Co                      +44 (0)20 7100 6451

 Gilly Lock

 Madeleine Gordon-Foxwell

 JTC (Jersey) Limited             +44 (0) 1534 700 000

 Hilary Jones

 

LEI: 213800VO4O83JVSSOX33

 

 

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