REG - Triple Point Energy - Proposed orderly realisation of assets

Triple Point Energy TransitionAnnouncement

13/12/2023 07:15

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RNS Number : 5595W  Triple Point Energy Transition PLC  13 December 2023

THIS ANNOUNCEMENT HAS BEEN DETERMINED TO CONTAIN INSIDE INFORMATION FOR THE
PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) 596/2014 (AS IT
FORMS PART OF DOMESTIC LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWL) ACT
2018).

 

 

13 December 2023

Triple Point Energy Transition plc

("TENT" or the "Company" or, together with its subsidiaries, the "Group")

PROPOSED ORDERLY REALISATION OF ASSETS AND RETURN OF CAPITAL TO SHAREHOLDERS

 

The Board of Directors (the "Board") of Triple Point Energy Transition plc
(LSE: TENT), the London Stock Exchange listed investment company focused on
building a portfolio of infrastructure investments that support the energy
transition, announces that it has undertaken a comprehensive review of the
options for the Group and its prospects, drawing on independent financial
advice, as well as shareholder feedback, with a view to determining the future
strategic direction of the Company and its Group.

 

In the three years since its launch in October 2020 ("IPO"), the Group has
worked towards achieving the goals set out at IPO including putting in place
predictable, long-term cash flows and targeting total NAV returns of 7-8% per
annum following full investment.

 

Despite making significant progress towards achieving these goals, the Company
has been significantly impacted by the wider macro-environmental pressures
being experienced by a large number of its sector peers. This, alongside
sub-optimal liquidity, has contributed to the Company's shares trading at a
persistent discount to the Group's prevailing net asset value ("NAV") since
January 2022 which, in turn, has restricted the Company's ability to raise
further capital and realise the benefits that come from greater scale. A key
requirement identified by the Company's shareholders is the need for increased
liquidity in the Company's shares which can only realistically be achieved
through greater scale. This is difficult to achieve at the current discount to
NAV, which, the Board believes, does not reflect the intrinsic value of the
portfolio, yet remains persistent and entrenched.

 

The Board and the Company's investment manager, Triple Point Investment
Management LLP ("Triple Point" or the "Investment Manager"), have maintained
an on-going dialogue with a number of shareholders and have undertaken several
measures to address share price performance over this period. Fundamentally,
the Group's portfolio has performed in line with the objectives set out at
IPO, exceeding the NAV return target in the most recent full year results to
31 March 2023 with a 1.1x covered dividend. The Board believes that the
Company's diverse portfolio of 20 assets is expected to deliver a stable and
predictable return to shareholders based on its high level of contractually
underpinned income over the next 13 years.

 

However, taking into account the Company's discount to NAV, its liquidity and
current market conditions, the Board engaged a third party to assess strategic
options for maximising shareholder value. Having considered the report, the
Board - whilst remaining open to considering other strategic options - has
determined that an orderly realisation of assets, and return of associated
realised capital will optimise shareholder value.

 

The Board will, therefore, be convening a general meeting of shareholders
("General Meeting") to seek approval for, amongst other things, the adoption
of a revised investment policy and other related matters in order to
facilitate the orderly realisation of the Group's assets and return of capital
to shareholders (the "Proposals"). A circular setting out details of the
Proposals and containing a notice convening the General Meeting is expected to
be posted to shareholders in Q1 2024.

 

Sale of Field debt facility

 

The Company has, separately, received an offer in relation to the sale of the
Group's debt facility (the "Facility") provided to a subsidiary of Virmati
Energy Ltd (trading as "Field") for the purposes of building out a portfolio
of Battery Energy Storage System ("BESS") assets in the UK (the
"Transaction"). The offer would see the Company receive the full carrying
value of the loan should it progress to completion. To date, an amount of c.
£10.1 million (of £37 million committed) has been drawn under the Facility.

 

The offer values the Facility at book value as included in the Company's
interim results to 30 September 2023.

 

The Transaction would be expected to be completed in Q1 2024. On completion of
the Transaction, the Company would be able to deleverage and cancel its
revolving credit facility.

 

Further details of the Transaction will be announced in due course, as
appropriate.

 

John Roberts, the Company's Chair, commented:

 

"We have built a diverse portfolio of assets which are both generating robust,
contractually underpinned cash flows in line with expectations supporting a
fully covered dividend and contributing to the energy transition. However, we
have listened to and recognise shareholder frustration at the Company's
undeserved, yet persistent discount to NAV. In view of the likelihood of
continued market volatility and the negative impact that will have on our
future ability to scale up, we have concluded that the best option to optimise
shareholder value is to initiate an orderly realisation of the Group's assets
and return capital to investors, and, as such, will be making this
recommendation to shareholders in our forthcoming circular."

 

For further information, please contact:

 Triple Point Investment Management LLP                    +44 (0) 20 7201 8989

 Jonathan Hick

 Christophe Arnoult

 Chloe Smith

 PricewaterhouseCoopers LLP (Corporate Financial Adviser)  +44 (0) 20 7583 5000

 Matt Denmark

 Nitin Premchandani

 Jon Raggett

 J.P. Morgan Cazenove (Corporate Broker)                   +44 (0) 20 3493 8000

 William Simmonds

 Jérémie Birnbaum

 Akur Limited (Financial Adviser)                          +44 (0) 20 7493 3631

 Tom Frost

 Anthony Richardson

 Siobhan Sergeant

 Buchanan (Financial PR)                                   +44 (0) 20 7466 5111

 Helen Tarbet

 Henry Wilson

 Verity Parker

 LEI: 213800UDP142E67X9X28

 Further information on the Company can be found on its
website: http://www.tpenergytransition.com/
(https://eur03.safelinks.protection.outlook.com/?url=http%3A%2F%2Fwww.tpenergytransition.com%2F&data=05%7C01%7CRebecca.Lillington%40triplepoint.co.uk%7C5d7dc58447154d71da6108da8a648af1%7Ccde8812e0dbd4dc3b4463655beb81efb%7C0%7C0%7C637974461674664827%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C3000%7C%7C%7C&sdata=Qxux6XDdRNrDI2LBUqkiVrj0UyfH30KOouLRCg%2FPxmY%3D&reserved=0)

 NOTES:

The Company is an investment trust which aims to invest in assets that support
the transition to a lower carbon, more efficient energy system and help the UK
achieve Net Zero.

Since its IPO in October 2020, the Company has made the following investments
and commitments:

·    Harvest and Glasshouse: provision of £21m of senior debt finance to
two established combined heat and power ("CHP") assets, located on the Isle of
Wight, supplying heat, electricity and carbon dioxide to the UK's largest
tomato grower, APS Salads ("APS") - March 2021

·    Spark Steam: provision of £8m of senior debt finance to an
established CHP asset in Teesside supplying APS, as well as a further power
purchase agreement through a private wire arrangement with another food
manufacturer - June 2021

·    Hydroelectric Portfolio (1): acquisition of six operational, Feed in
Tariff ("FiT") accredited, "run of the river" hydroelectric power projects in
Scotland, with total installed capacity of 4.1MW, for an aggregate
consideration of £26.6m (excluding costs) - November 2021

·    Hydroelectric Portfolio (2): acquisition of a further three
operational, FiT accredited, "run of the river" hydroelectric power projects
in Scotland, with total installed capacity of 2.5MW, for an aggregate
consideration of £19.6m (excluding costs) - December 2021

·    BESS Portfolio: commitment to provide a debt facility of £37m to a
subsidiary of Virmati Energy Ltd (trading as "Field"), for the purposes of
building a portfolio of four geographically diverse Battery Energy Storage
System ("BESS") assets in the UK with a total capacity of 110MW - March 2022

·    Energy Efficient Lighting: Funding of c.£2.2m to a lighting
solutions provider to install efficient lighting and controls at a leading
logistics company - March 2023

·    Innova: Provision of a £5m short term development financing
facility to Innova Renewables, building out a portfolio of Solar and BESS
assets across the UK - March 2023

·    Energy Efficient Lighting: Funding of c.£2.3m to Boxed Light
Services Limited to refinance efficient lighting and controls installed at
Places for People Homes Limited - September 2023

 The Investment Manager is Triple Point Investment Management LLP ("Triple
Point") which is authorised and regulated by the Financial Conduct Authority.
Triple Point manages private, institutional, and public capital, and has a
proven track record of investment in Energy Efficiency and decentralised
energy projects.

Following its IPO on 19 October 2020, the Company was admitted to trading on
the Premium Segment of the Main Market of the London Stock Exchange on 28
October 2022. The Company was also awarded the London Stock Exchange's Green
Economy Mark.

 

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