REG - SDCL Efficiency Inc. - Disposal and Gearing Reduction

SDCL Efficiency Income TrustAnnouncement

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RNS Number : 4198X  SDCL Efficiency Income Trust PLC   20 March 2026

20 March 2026

SDCL Efficiency Income Trust plc

("SEIT" or the "Company")

Disposal and gearing reduction

SEIT is pleased to announce the sale of a diversified portfolio of operational
and yielding energy efficiency infrastructure assets to Kyotherm SAS
("Kyotherm"), for a total enterprise value of up to c.£105 million (the
"Disposal"). The portfolio includes the Company's interests in Capshare Future
Energy Solutions (asset portfolios), Sparkfund, Moy Park Biomass, Tallaght
Hospital, Baseload, Lycra, SEEIPL, Northeastern US CHP, CPP Biomass,
Supermarket Solar UK and GET Solutions (the "Portfolio"). Kyotherm is a
leading investment company dedicated to financing decarbonised heat and energy
efficiency projects globally.

The Disposal is consistent with the Company's stated priority to reduce
gearing through asset sales and helps streamline the Company's overall
portfolio which now has greater focus on Commercial and Industrial customers
and District Energy solutions. The agreed price represents a discount of
c.9% 1  (#_ftn1) to the carrying value of the Portfolio as at 30 September
2025, and the Disposal is expected to result in a reduction to the Company's
NAV of c. 1.2p.

The Disposal consideration of up to c.£105 million includes an earnout of up
to c.£4 million, payable to the Company if agreed performance conditions are
met over the next 3-5 years. Day-one cash proceeds expected to be received on
completion are c.£84 million, after permitted distributions, transaction
costs, debt and debt-like items. Completion of the Disposal is subject to
customary closing conditions and is expected by mid-April 2026. Goldman Sachs
International acted as sole financial adviser to the SEIT entity involved in
the Disposal.

Financial Impact

The Company intends to apply proceeds of the Disposal primarily towards
reducing drawings under the existing revolving credit facility. This, along
with near term project-level debt reductions, is targeted to bring the pro
forma aggregate gearing as a percentage of NAV as at 30 September 2025 to
c.65%.

There is no change to the Company's target dividend of 6.36p for the current
financial year. The NAV for the financial year ended 31 March 2026 will be
reported in June 2026.

Outlook

As SEIT has previously stated, many institutional and financial investors
within the mid-market and energy transition sectors are under pressure to sell
assets in order to retire financing or deliver distributions, creating excess
supply and increasing demand for scarce capital. This dynamic is enabling
buyers to secure assets below carrying values and is illustrative of a strong
buyers' market.

The positive outcome achieved by the Disposal announced today is the result of
months of disciplined execution and reflects the attractive, yielding nature
of the Portfolio. As with the Company's other disposals to date, the Disposal
is being made to strategic investors, who can realise greater operational
benefits. Given the competition for capital in the private capital markets,
the Board considers it unlikely that other individual asset sale processes
would deliver equivalent shareholder value in the near to medium term, a
factor that will be considered as part of the year-end valuation process,
including the calculation of the Company's NAV.

Tony Roper, Chair of SEIT, commented:

"The Board is pleased to announce today's disposal, in line with our near-term
objectives set out in our interim results in December. The net proceeds of the
disposal will primarily be used to reduce gearing, targeted to bring aggregate
debt levels to c.65% of NAV.

The Board's intention remains to reduce gearing and generate portfolio
liquidity. However, the sale of a high yielding asset portfolio, at even a
modest discount to NAV and which has taken longer than anticipated,
illustrates the challenges of achieving disposal activity at reasonable
valuations. The Board continues to view the status quo, including the current
share price discount to NAV, as untenable and is working with the Manager to
progress strategic solutions with a clear focus on achieving value for our
shareholders."

Jonathan Maxwell, CEO of SDCL, commented:

"This disposal reflects the commitment and determination shown across our team
to deliver strong outcomes for shareholders in a highly challenging market.

The transaction results in a more streamlined portfolio, now increasingly
focused on Commercial and Industrial customers and District Energy solutions,
where we see the greatest opportunity to drive long‑term value through
energy efficiency."

 

-ENDS-

For Further Information

 Sustainable Development Capital LLP                 T: +44 (0) 20 7287 7700

 Jonathan Maxwell

 Eugene Kinghorn

 Tamsin Jordan

 Ben Griffiths

 Jefferies International Limited (Corporate Broker)  T: +44 (0) 20 7029 8000

 Paul Bundred

 Gaudi Le Roux

 Harry Randall-Knowles

 Cardew Group                                        T: +44 (0) 20 7930 0777

 Ed Orlebar                                          M: +44 (0) 7738 724 630

 Henry Crane                                         E: seit@cardewgroup.com (mailto:seeit@cardewgroup.com)

 

Goldman Sachs International acted as sole financial adviser to the SEIT entity
involved in the Disposal.

 

LEI: 213800ZPSC7XUVD3NL94

 

 

About SEIT

SDCL Efficiency Income Trust plc is a constituent of the FTSE 250 index. It
was the first UK listed company of its kind to invest exclusively in the
energy efficiency sector. Its projects are primarily located in North America,
the UK and Europe and include, inter alia, a portfolio of cogeneration assets
in Spain, a portfolio of commercial and industrial solar and storage projects
in the United States, a regulated gas distribution network in Sweden, a
portfolio of on-site energy recycling, cogeneration and process efficiency
projects, servicing the largest steel blast furnace in the United States and
a district energy system providing essential and efficient utility services on
one of the largest business parks in the United States.

The Company aims to deliver shareholder value through its investment in a
diversified portfolio of energy efficiency projects which are driven by the
opportunity to deliver lower cost, cleaner and more reliable energy solutions
to end users of energy.

The Company is targeting an attractive total return for shareholders with a
stable dividend income, capital preservation and the opportunity for capital
growth. The Company is targeting a dividend of 6.36p per share in respect of
the financial year to 31 March 2026. SEIT's last published NAV was 87.6p per
share as at 30 September 2025.

Past performance cannot be relied on as a guide to future performance.

Further information can be found on the Company's website at www.seitplc.com
(http://www.seitplc.com/) .

Investment Manager

SEIT's investment manager is Sustainable Development Capital LLP ("SDCL"), an
investment firm established in 2007, with a proven track record of investment
in energy efficiency and decentralised generation projects in the UK,
Continental Europe, North America and Asia.

SDCL is headquartered in London and also operates worldwide from offices in
New York, Dublin, Hong Kong and Singapore. SDCL is authorised and regulated in
the UK by the Financial Conduct Authority.

Further information can be found at www.sdclgroup.com
(http://www.sdclgroup.com/) .

Disclaimer(s)

Goldman Sachs International, which is authorised by the Prudential Regulation
Authority and regulated by the Financial Conduct Authority and the Prudential
Regulation Authority in the United Kingdom, is acting for the SEIT entity
involved in the Disposal and no one else in connection with the Disposal and
will not be responsible to anyone other than such SEIT entity for providing
the protections afforded to clients of Goldman Sachs International, or for
giving advice in connection with the Disposal or any matter referred to
herein.

 

 

 1  (#_ftnref1) Shown on an adjusted basis, including earnout. c.10% discount
to carrying value excluding earnout

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