REG - SDCL Energy Effcncy. - Investment in Portfolio Company

SDCL Efficiency Income TrustAnnouncement

06/10/2023 07:00

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RNS Number : 8996O  SDCL Energy Efficiency Income Tst  06 October 2023

6 October 2023

SDCL Energy Efficiency Income Trust plc

("SEEIT" or the "Company")

Investment in Portfolio Company

SEEIT is pleased to announce that it has acquired the outstanding balance of
loan facilities secured against an operational portfolio of LED lighting
projects in the USA held by Future Energy Solutions Lighting Holdings ("FES"),
a SEEIT portfolio company.

The loan was acquired for approximately $31 million (£25 million) and
provides SEEIT with the entirety of the economic interest in a fully
contracted portfolio comprising 1,500+ contracts with remaining tenors of up
to 13.5 years. The Company was presented with this exclusive opportunity
because of its equity interests in FES. The investment creates the potential
to realise operational and financial efficiencies across the FES portfolio,
whilst on a standalone basis it benefits from strong cashflow yields and is
forecast to deliver double digit unlevered returns. The transaction also
secures the Company's access to a customer base with a strong credit record,
offering future incremental investment and re-contracting opportunities.

LED lighting systems typically produce 100,000+ hours of illumination and
consume up to 90% less energy than traditional incandescent light bulbs,
leading to greatly reduced energy expenditures for users. The associated
environmental benefits include a significant reduction in CO2 emissions
relative to traditional lighting technology, as well as lower overall waste
thanks to the greater lighting life span of these bulbs.

This investment, together with investments made since 31 March 2023 that
substantially related to the organic pipeline, has been funded from the
Company's £180 million revolving credit facility which is currently £100
million drawn.

The Board and Investment Manager are actively exploring opportunities to
recycle capital, including through selective disposals, as well as carefully
reviewing the relative and absolute levels of gearing in the Group. SEEIT's
aggregate gearing remains low relative to its covenants, with the debt
primarily sitting at a project level, where it is non-recourse to the Company,
typically benefitting from hedged interest rates and amortising such that the
debt quantum is naturally reducing over time.

 

For Further Information

 

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

 Jonathan Maxwell

 Purvi Sapre

 Eugene Kinghorn

 Tom Hovanessian

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

 Tom Yeadon

 Gaudi le Roux

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

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

 Henry Crane                          E: SEEIT@tbcardew.com (mailto:SEEIT@tbcardew.com)

 

 

About SEEIT

 

SDCL Energy 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 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 shareholders 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 of 7-8
per cent. per annum (net of fees and expenses and by reference to the initial
issue price of £1.00 per Ordinary Share), with a stable dividend income,
capital preservation and the opportunity for capital growth. The Company is
targeting a dividend of 6.24p per share in respect of the financial year to 31
March 2024. SEEIT's last published NAV was 101.5p per share as at 31 March
2023.

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

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

Investment Manager

 

SEEIT'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, Madrid, Hong Kong and Singapore. SDCL is authorised and
regulated in the UK by the Financial Conduct Authority.

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

 

About Future Energy Solutions

 

FES is an innovative global green technology company that provides funded and
capital purchase lighting solutions for large scale commercial and industrial
businesses. The FES service includes surveying, designing, analysing,
procuring, project managing, installing, and maintaining new energy efficient
lighting systems. Formed in 2009 in the United States, FES has grown into a
family of companies around the globe. The UK office opened in April 2013 and
has since installed over 300,000 energy efficient luminaries across several
client portfolios, with an additional presence in Mainland Europe.

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