REG - SDCL Efficiency Inc. - Strategic Update and Portfolio Proposals

SDCL Efficiency Income TrustAnnouncement

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RNS Number : 7162Z  SDCL Efficiency Income Trust PLC   09 April 2026

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.

 

FOR IMMEDIATE RELEASE

 

9 April 2026

SDCL Efficiency Income Trust plc

("SEIT" or the "Company")

Strategic Update and Announcement of Proposed Sale of Portfolio Assets and
Proposed Managed Wind-Down

The Board is today providing an update to all its shareholders following a
recent consultation with a number of its shareholders with respect to the
appropriate strategic direction for the Company.

 

As stated in the Company's interim results announcement on 8 December 2025,
the Board has prioritised finding a solution that delivers value to
shareholders and has considered a variety of potential solutions. One of the
key priorities for the Board has been seeking to sell investments to reduce
gearing and improve liquidity. This has proved challenging, notwithstanding
that the Company was recently able to announce the disposal of a diversified
portfolio of operational and yielding energy efficiency infrastructure assets
for a total enterprise value of up to £105 million on 20 March 2026. The
agreed price represents a discount of c.9%( 1 ) to the carrying value of the
portfolio as at 30 September 2025. The disposal process took longer than
anticipated and illustrates some of the challenges of making disposals at
reasonable valuations in the current market.

 

Given these challenging headwinds, the Board and the investment manager,
Sustainable Development Capital LLP (the "Manager"), have been considering
alternative solutions that could address the current discount to prevailing
net asset value at which the Company's shares trade, including through a
strategic realignment of the Company, which could create a credible path to
value creation for shareholders over the medium to long term without the need
to dispose of assets in a difficult market. It was against that backdrop that
the Manager, supported by the Board, developed a strategic proposal (the
"Strategic Proposal"), which comprised:

 

·   transferring the Company's listing from an investment trust to a
vertically integrated operating company,   enabling better access to capital
to preserve and deliver value as an energy services platform;

·      a strengthened leadership team to scale the business and drive
operational performance;

·      an acquisition of the relevant assets of the Manager, including
the transfer of the relevant employees, with the   majority of consideration
payable in new SEIT shares;

·      a stronger platform for future growth, including material
synergies;

·      a waiver of the Manager's termination fee;

·   a transfer of the Manager's growth-oriented data centre energy
platform, which is not available to SEIT   shareholders today, under an
earn-out structure with no up-front cost paid by the Company;

·      a re-calibration of the year 1 dividend to position the Company
for growth; and

·     a potential future equity capital raise through a pre-emptive placing
of new SEIT shares to de-lever and fund accretive growth opportunities,
supported by General Atlantic as a cornerstone investor.

 

Over the last 10 days, the Board and the Manager have been involved in
extensive discussions with a number of SEIT's shareholders regarding the
Strategic Proposal to ascertain their views.

 

Whilst the Board believes that the Company could potentially deliver value
significantly in excess of the current share price in the medium to long term
through the implementation of the Strategic Proposal, it also acknowledges
that there is execution risk associated with this transformation and
re-positioning of the Company. During the recent shareholder engagement, a
significant number of shareholders expressed a clear preference for liquidity
rather than the Strategic Proposal, notwithstanding the material risks to
achieving value in a reasonable timeframe associated with a liquidation of the
Company's portfolio in the current challenging market backdrop.

 

Following this engagement, it is clear to the Board and the Manager that there
is insufficient support from shareholders to pass the special resolution
required to successfully implement the Strategic Proposal.

 

The Board remains focused on delivering shareholder value and has carefully
assessed all actionable options currently available to the Company to achieve
that objective. Accordingly, the Board has unanimously concluded that it is
currently in the best interests of its shareholders, as a whole, to pursue a
managed wind-down of the Company's investment portfolio (the "Managed
Wind-Down"). The Board will give consideration as to how best to ensure the
Company is able to continue operating its ordinary activities, whilst ensuring
that it can deliver shareholder value through disposals and ultimately a full
liquidation of the Company's portfolio. The Board remains open to proposals
for any, or all, of the assets of the Company's portfolio.

 

The Board now intends to agree appropriate arrangements to effect the Managed
Wind-Down and align economic interests towards monetising assets. The Board
and the Manager have agreed in good faith to minimise any termination fees
that could potentially be payable to the Manager, on the basis that if
termination does occur, the Manager's contractual notice period would be
deemed to have commenced on today's date.

 

The Board wishes to express its sincere appreciation to its shareholders for
their recent engagement and constructive discussions. Moreover, the Board
would also like to express its gratitude for the perseverance and support that
shareholders have demonstrated through what the Board recognises has been, and
continues to be, a very challenging time for the Company.

 

Further information

 

The Board will commence a process to evaluate the appropriate management
arrangements of the Managed Wind-Down process shortly. In due course, the
Board will announce the requisite changes required to the Company's policies
to facilitate a successful Managed Wind-Down and return of capital to
shareholders over time. Further details will be announced as and when
appropriate.

 

Tony Roper, Chair of SEIT, commented:

 

"Since the material increase to interest rates in late 2022, the macro
environment and investment trust landscape has become increasingly challenging
and it has become clear to the Board that SEIT, like a lot of its investment
trust peers, can no longer deliver returns that are acceptable to shareholders
in its current structure and the status quo is not viable.

 

The Board is acutely aware of the reduction in share price in recent years and
we recognise the frustration and uncertainty this has caused. We have listened
carefully to the views expressed in our recent shareholder engagement and are
grateful for the constructive dialogue and candour shown throughout.

 

Having considered a wide range of options, and in light of the clear
preference for liquidity in addition to value, the Board believes that
proposing a managed wind-down is the most appropriate course of action to seek
to deliver value and provide shareholders with a clearer path to realisations,
notwithstanding the execution challenges of achieving this objective in the
current market environment.

 

We will continue to engage closely with shareholders as these plans evolve in
the coming months."

 

( 1 ) Shown on an adjusted basis, including earn-out. c.10% discount to
carrying value excluding earn-out

-ENDS-

For Further Information

 SDCL Efficiency Income Trust                                              Via Cardew Group

 Tony Roper (Chair)

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

 Jonathan Maxwell

 Eugene Kinghorn

 Tamsin Jordan

 Ben Griffiths

 Jefferies International Limited (Financial Adviser and 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)

 

LEI: 213800ZPSC7XUVD3NL94

 

This announcement is being made on behalf of the Company by Tony Roper, Chair
of SEIT.

 

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/) .

 

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