REG - Triple Point Energy - Publication of Circular and Notice of GM

Triple Point Energy TransitionAnnouncement

05/03/2024 07:15

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RNS Number : 6098F  Triple Point Energy Transition PLC  05 March 2024

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).

5 March 2024

Triple Point Energy Transition plc

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

PUBLICATION OF CIRCULAR REGARDING A PROPOSED MANAGED WIND-DOWN OF THE COMPANY
AND RELATED PARTY TRANSACTIONS

AND

NOTICE OF GENERAL MEETING

 

Further to the announcement of 13 December 2023, the Board of Directors of
Triple Point Energy Transition plc (LSE: TENT) (the "Board"), the London
Stock Exchange listed investment company focused on building a portfolio of
infrastructure investments that support the energy transition, today
announces that a shareholder circular (the "Circular") is expected to be
published today regarding the proposed managed wind-down of the Company, which
will require the amendment of the Company's investment objective and
Investment Policy.

 

The Circular also contains a notice convening a general meeting of the Company
(the "General Meeting") at which approval will be sought from Shareholders
for:

 

·    the proposed change to the Company's investment objective and
Investment Policy to facilitate the managed wind-down of the Company and
orderly realisation of its assets;

 

·    the conditional disposal by TENT Holdings of the Field Debt Facility
to Triple Point Leasing Limited ("TPLL");

 

·    the conditional disposal by TENT Holdings of the LED Facility to
Boxed Light Services Limited ("Boxed") for onward assignment by Boxed to TPLL;

 

·    the associated amendments to the Investment Management Agreement.

 

The General Meeting will be held at 9.30a.m. on 22 March 2024 at 1 King
William Street, London, EC4N 7AF.

 

Unless otherwise defined, capitalised terms used in this announcement shall
have the same meaning as set out in the Circular.

 

The proposals are, in the Board's opinion, in the best interests of the
Shareholders as a whole. Accordingly, the Board unanimously recommends that
Shareholders vote in favour of the Resolutions to be proposed at the General
Meeting.

 

As previously announced, in the three years since its IPO in October 2020, the
Group has worked towards achieving the goals set out at IPO including putting
in place long-term cash flows that are underpinned by contract and targeting
NAV total returns of 7-8% per annum following full investment. The Group has
achieved these goals.

 

Despite this, TENT 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 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 certain 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 with the shares trading a material
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 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. However, taking into account the Company's
share price discount to NAV, its liquidity and market conditions and market
prospects, the Board engaged its Financial Adviser to assess strategic options
for maximising Shareholder value. Having considered the report, the Board
determined that an orderly realisation of assets, and return of value to
Shareholders, is the best option available. Subject to obtaining the approval
of Shareholders at the General Meeting, this will be implemented via a managed
wind-down which will initially involve the Investment Policy Amendment, the
Field Sale (which, if approved by Shareholders pursuant to Resolution 2, will
facilitate the repayment and cancellation of the Revolving Credit Facility),
the LED Facility Sale and the IMA Amendment each as further described in the
Circular.

 

Subject to the passing of Resolution 1 (to implement the Investment Policy
Amendment), the Company will also seek opportunities to realise the remainder
of the Group's investments. Details of future divestments or investment exits
will be announced via a Regulatory Information Service in due course.

 

Further, subject to the passing of Resolution 1, in order to save costs during
the Managed Wind-Down Process, the Company is intending to provide half-yearly
(rather than quarterly) NAV updates.

 

In the interim, the Board notes the following in respect of the Group's CHP
investments which include the provision by TENT Holdings of senior debt
financing to Harvest, Glasshouse and Spark Steam, which are each CHP
businesses that provide heat and power to tomato grower APS Salads. Since 30
September 2023, the aged debtors of Harvest, Glasshouse and Spark Steam have
increased, although repayments have been made to the Group in October 2023 in
line with the agreed loan repayment schedule since the last reporting date.
The next repayment date is in July 2024. APS Salads has a highly seasonal
revenue profile with income received corresponding with the growing season.

 

As set out in more detail below, each of the Field Sale, the LED Facility Sale
and the IMA Amendment will comprise a related party transaction for the
purposes of Chapter 11 of the Listing Rules and, as a result, Shareholder
approval is being sought at the General Meeting for the Related Party
Transactions.

 

John Roberts, the Company's Chair, commented:

 

"Despite achieving the goals set out at IPO, we recognise shareholder
frustration at the undeserved, yet persistent discount to NAV at which the
Company's shares have traded since January 2022. In view of the likelihood of
continued market volatility and the negative impact that will have on our
future ability to increase scale, we have concluded that the best option to
optimise shareholder value is to initiate an orderly realisation of the
Group's assets, a process that would commence immediately with the Field and
LED sales if approved by shareholders. We have proposed amendments to the
Investment Management Agreement which includes an innovative revised fee
structure which will align the Investment Manager with Shareholders in seeking
swift but attractive exits for the Company's assets. We urge all shareholders
to consider carefully the proposals laid out in the Circular published today
which the Board unanimously supports and recommends Shareholders vote in
favour of the resolutions."

 

The Proposals

 

Resolution 1 - Amendment to the investment objective and Investment Policy of
the Company

 

If Resolution 1 is passed, the Company's existing investment objectives and
policy will be replaced and the Company will adopt and adhere to the following
amended and restated investment policy, for so long as the Company maintains
its listing and is subject to the Listing Rules.

 

Proposed revised investment objective:

 

"To conduct an orderly realisation of the assets of the Group, to be effected
in a manner that seeks to achieve a balance between returning cash to
Shareholders promptly and maximising value, while maintaining an income return
for so long as the Group continues to own assets which generate sufficient
income."

 

Proposed revised investment policy:

 

"The Company's investments will be realised in an orderly manner, that is,
with a view to achieving a balance between returning cash to Shareholders
promptly and maximising value.

 

The Company may not make any new investments save that: (a) investments may be
made to honour existing documented contractual commitments to existing
portfolio companies, as appropriate; and (b) realised cash may be invested in
line with the Company's cash management policy pending its return to
Shareholders in accordance with the Company's investment objective.

 

Any return of proceeds to the Shareholders will be subject to compliance with
any remaining gearing facilities and hedging arrangements, payment of expenses
and maintenance of reserves for potential liabilities.

 

Notwithstanding the requirement to spread investment risk, the Company will
continue to comply with all of the requirements of the Listing Rules in order
to maintain the Company's admission to the Official List under Chapter 15 of
the Listing Rules.

 

Cash management

 

The Company may hold cash on deposit for working capital purposes and pending
return to Shareholders and, as well as cash deposits, may invest in cash
equivalent investments, which may include government issued treasury bills,
money market collective investment schemes, other money market instruments and
short-term investments in money market type funds ("Cash and Cash
Equivalents"). There is no restriction on the amount of Cash and Cash
Equivalents that the Company may hold and there may be times when it is
appropriate for the Company to have a significant Cash and Cash Equivalents
position."

 

Any further material change to the revised investment policy would require
prior FCA approval and Shareholder approval by an ordinary resolution in
accordance with the Listing Rules.

 

Managed Wind-Down

 

The revised investment policy will involve a continuing evaluation of the
portfolio in order to assess the most appropriate realisation strategy to be
pursued in relation to each investment. To this end, the Company has retained
PwC as its Corporate Financial Adviser to advise and act on its behalf in the
realisation of the Company's portfolio of assets.

 

The strategy for realising individual investments will be flexible and may
need to be altered to reflect changes in the circumstances of a particular
investment or in the prevailing market conditions. The Board will meet
regularly to review the progress in implementing the Company's revised
investment objective and policy and the status of unrealised holdings. Any
disposal of assets will be subject to the Board's approval.

 

Resolution 2 - Field Sale

 

On 31 March 2022, the Group, via TENT Holdings, entered into a facility
agreement (which was amended and restated on each of 1 December 2022, 17 May
2023, 26 September 2023 and 23 January 2024) pursuant to which it agreed to
provide a debt facility (the "Field Debt Facility") to a subsidiary of Virmati
Energy Ltd (trading as "Field"), for the purposes of building a portfolio of
four geographically diverse BESS assets in the UK. The total committed Field
Debt Facility was for an amount of £45,647,428, carrying a fixed interest
rate. On 26 September 2023, the amount of the Field Debt Facility was reduced
to £37 million. To date, an amount of approximately £15.6 million has been
drawn under the Field Debt Facility, and TENT Holdings is committed to
deploying the remaining balance of the loan (being an amount equal to
£21,356,615), by 31 March 2024.

 

On 5 March 2024 TENT Holdings entered into a deed of novation and assignment
with, among others, TPLL ("Field Novation and Assignment Deed") pursuant to
which TENT Holdings has conditionally agreed to novate and assign to TPLL all
of its rights, title, interests, obligations and benefits under the Field Debt
Facility and TPLL has agreed to perform obligations to the borrower under the
Field Debt Facility. The consideration payable to TENT Holdings by TPLL
pursuant to the Field Novation and Assignment Deed will be the amount drawn
under the Field Debt Facility as at the date on which the conditions precedent
are satisfied under the terms of the Field Novation and Assignment Deed (the
amount drawn as at the date of the Circular is £15.6 million) plus any
accrued interest due as at such date, representing the full carrying value of
the Field Debt Facility. This amount is payable upon the novation and
assignment becoming effective in accordance with the terms of the Field
Novation and Assignment Deed. In addition, the Group is required pursuant to
the Field Novation and Assignment Deed to deploy the proceeds it receives from
the Field Sale to repay an amount equal to approximately £8 million of its
Revolving Credit Facility, being the amount of the Revolving Credit Facility
that has been drawn by the Group as at the Latest Practicable Date. The
Revolving Credit Facility is due to expire in March 2025, but will be repaid
and cancelled upon completion of the Field Sale.

 

The Field Novation and Assignment Deed is subject to certain customary
conditions precedent, including the receipt of Shareholder approval being
received at the General Meeting for Resolution 2.

 

The novation and assignment by TENT Holdings pursuant to the Field Novation
and Assignment Deed will become effective upon the satisfaction of the
conditions precedent contained therein. The conditions precedent are required
to be satisfied by 30 April 2024 in order for the novation and assignment to
become effective.

 

TENT Holdings has provided customary representations and warranties pursuant
to the Field Novation and Assignment Deed including, inter alia, in relation
to its valid incorporation, its capacity to enter into the Field Novation and
Assignment Deed and its title to the Field Debt Facility. The Field Novation
and Assignment Deed contains customary limitations on TENT Holdings' liability
for claims made against it by TPLL. It also contains a customary indemnity
from TPLL in favour of TENT Holdings in relation to TENT Holdings' outstanding
obligations under or in respect of the documents being assigned to TPLL, which
is subject to a monetary cap.

 

The Board believes that the disposal of the Field Debt Facility to TPLL,
another member of the Triple Point Group, for the carrying value of the Field
Debt Facility represents a satisfactory price for the Field Debt Facility,
being a fixed rate receivables facility entered into during a period of low
interest rates in the United Kingdom.

 

The Board wishes to repay the outstanding amount owed by the Group under the
Revolving Credit Facility to remove the Group's ongoing costs associated with
the facility. The immediate repayment and cancellation (without cost) of the
Revolving Credit Facility facilitated by the Field Sale would also leave the
Group debt free. The Board therefore believes the Field Sale should take place
irrespective of whether or not Resolution 1 is approved by Shareholders.

 

Accordingly, and for the avoidance of doubt, the approval by Shareholders of
the Field Sale pursuant to Resolution 2 is not conditional on the Investment
Policy Amendment being approved by Shareholders pursuant to Resolution 1.

 

The Field Sale is expected to complete in the near-term following the General
Meeting.

 

Resolution 3 -LED Facility Sale

 

In September 2023, the Group, via TENT Holdings, signed contracts with Boxed
Light Services Limited ("Boxed"), pursuant to which the Group committed to
provide a £2,230,511 receivables financing facility to Boxed (the "LED
Facility"). The LED Facility provides receivables financing across 54 sites,
with repayments including a fixed rate of interest being paid to the Group
from an investment-grade counterparty, Places for People. The amount deployed
pursuant to the LED Facility as at 31 December 2023 was £2,171,555.

 

On 5 March 2024, TENT Holdings entered into a sale agreement with Boxed (the
"LED Facility Sale Agreement") pursuant to which the Group has agreed to
conditionally sell the LED Facility to Boxed for an amount equal to
approximately £2.1 million, representing the aggregate full carrying value of
the LED Facility as at the date on which the conditions under the LED Facility
Sale Agreement are satisfied. The LED Facility Sale Agreement is conditional
on Resolution 3 being approved by Shareholders at the General Meeting, as well
as the satisfaction of TENT Holdings that all necessary documentation and
approvals relating to the onward sale (by way of assignment) of the LED
Facility to TPLL have been obtained. Following the entry into the LED Facility
Sale Agreement on 5 March 2024, Boxed entered into a deed of assignment with
TPLL (the "LED Assignment Deed" and together with the LED Facility Sale
Agreement, the "LED Facility Sale Documents"). Pursuant to the LED Assignment
Deed, Boxed has agreed to assign to TPLL all of the title, rights, interests
and benefits arising out of or in connection with the LED Facility including,
without limitation, all receivables which are now or may at any time be or
become due under the LED Facility.

 

The Board believes that the disposal of the LED Facility to TPLL, another
member of the Triple Point Group, for the carrying value of the LED Facility
represents a satisfactory price for the LED Facility, being a fixed rate
receivables facility recently entered into by the Group.

 

For the avoidance of doubt, the approval by Shareholders of the LED Facility
Sale pursuant to Resolution 3 is conditional on the Investment Policy
Amendment being approved by Shareholders pursuant to Resolution 1.

 

The LED Facility Sale is expected to complete in the near-term following the
General Meeting.

 

Resolution 4 - Amendment to the Investment Management Agreement

 

Pursuant to the terms of the existing Investment Management Agreement, the
Investment Manager is entitled to receive a stepped annual management fee (the
"Annual Management Fee") on the following basis:

 

 Net Asset Value((1))                                                           Annual Management Fee (percentage of Net Asset Value)
 On such part of the Net Asset Value that is up to and including £650 million   0.9 per cent.
 On such part of the Net Asset Value that is above £650 million                 0.8 per cent.

((1)       For the avoidance of doubt, the different percentages set out
above shall be applied incrementally and not against the total Net Asset
Value.)

 

The Annual Management Fee is calculated and accrues quarterly and is invoiced
quarterly in arrears. On a semi-annual basis, following the announcement of
the Net Asset Value for the semi-annual periods ending 31 March and 30
September in each year, the Investment Manager procures that the Wider Triple
Point Group applies an amount, in aggregate, equal to 20 per cent. of the
Annual Management Fee (net of any applicable tax) for the relevant six-month
period as follows: (a) where the Shares are trading at, or at a premium to,
the latest published Net Asset Value per Share; the Investment Manager
procures that the Wider Triple Point Group uses the relevant amount to
subscribe for new Shares (rounded down to the nearest whole number of Shares)
issued at the latest published Net Asset Value per Share applicable at the
date of issuance; or (b) where the Shares are trading at a discount to the
latest published Net Asset Value per Share; the Investment Manager procures
that the Wider Triple Point Group, as soon as reasonably practicable, uses the
relevant amount to make market purchases of Shares (rounded down to the
nearest whole number of Shares) within four months of the relevant Net Asset
Value publication date. Even though the Annual Management Fee is payable on a
quarterly basis, Ordinary Shares are only acquired by the Wider Triple Point
Group on a half-yearly basis.

 

The Investment Management Agreement can be terminated by either the Company or
the Investment Manager on not less than 12 months' notice to the other party,
with such notice not to be served before 19 October 2024, being the fourth
anniversary of the Company's initial admission to trading on the London Stock
Exchange.

 

New Fee Proposal

 

The Company has agreed to amend the Investment Management Agreement,
conditional upon the IMA Amendment being approved pursuant to Resolution 4 and
the Investment Policy Amendment being approved pursuant to Resolution 1, so
that the Investment Manager will be entitled to receive the following fees
(the "Fee Proposal"):

 

§ a fixed retainer fee equal to 0.9% of the average market capitalisation of
the Company during the relevant month, which is payable in cash and on a
monthly basis (the "Retainer Fee"); and

§ a success fee (the "Success Fee" and together with the Retainer Fee, the
"Fee") based on the value realised across the portfolio of assets (including
committed amounts) ("Value Realised"), and calculated using the percentage of
the gross sale value of the Group's investments, less the direct costs
specifically associated with the sale of such investments (for example, fees
of professional and legal advisers), against the prevailing value of the
investments at the time of sale based on (i) the most recent third party
reviewed published asset level NAV (in the case of equity investments) or (ii)
drawn amounts, including repayments made since 30 September 2023 (in the case
of debt investments) ("Carrying Value") (the "Percentage Value Achieved").

 

The Success Fee will be determined on an aggregated basis across the sale of
all of the Group's investments, incentivising the Investment Manager to
continue to work on the tail of the portfolio and achieve the best return for
the Company and its Shareholders.  The Success Fee will be payable upon the
completion of the disposal of the Group's final investment unless, before such
disposal, the Investment Management Agreement is terminated as a result of
Shareholders approving either (i) the winding up of the Company; or (ii) the
appointment of a receiver or administrator over any of the assets of the
Company; (each being a "Termination Event"). If the Investment Management
Agreement is so terminated, the Success Fee will be payable at the date of
termination.

 

The Success Fee will be calculated using the following fee structure:

 

 Percentage Value Achieved        Success Fee payable (percentage of Value Realised)
 80% - 84.9% of Carrying Value    0.80%
 85% - 89.9% of Carrying Value    0.90%
 90% and above of Carrying Value  1.00%

 

A minimum Fee of £1.1 million will be payable to the Investment Manager
pursuant to the Fee Proposal and the IMA Amendment, with any shortfall being
payable upon the final asset disposal by the Company or, if a Termination
Event occurs before such disposal, on the date of the termination of the
Investment Management Agreement in connection therewith.

 

The aggregate Fee payable to the Investment Manager will be capped at £1.351
million, which reflects the maximum fee the Investment Manager is currently
expected to receive under the existing fee arrangements.  If the IMA
Amendment is approved pursuant to Resolution 4, the Fee Proposal will be
implemented and will remain valid until the earlier of (i) the completion of
the Managed Wind-Down; (ii) 20 October 2025; and (iii) the termination of the
Investment Management Agreement in accordance with its terms. Any taxes
applicable to the Fee will be applied as required.

 

In the event that, prior to completion of the Managed Wind-Down, the Company
is the subject of a takeover bid or a merger transaction under the Takeover
Code and such takeover bid or merger transaction becomes wholly unconditional,
the Company shall pay the maximum fee of £1.351 million to the Investment
Manager, less the cumulative total of any Retainer Fees that have been paid to
the Investment Manager prior to the takeover bid or merger transaction
becoming wholly unconditional, in full settlement of all services rendered by
the Investment Manager to such date.

 

In the event that, prior to the completion of the Managed Wind-Down and the
Company's expected eventual liquidation, the Shareholders approve the
cancellation of the admission of the Ordinary Shares to the Official List and
to trading on the Main Market (the "De-Listing"), the Retainer Fee payable by
the Company will be adjusted so that it is equal to 0.9% of the market
capitalisation of the Company as at the date on which the De-Listing becomes
effective, subject to further adjustments that may be required, including
(without limitation), as a result of any future disposals and/or capital
reductions that may be undertaken by the Company.

 

As a result of the IMA Amendment, the Investment Management Agreement will
automatically terminate on 20 October 2025, if it is not terminated before
then in accordance with its terms.

 

The Board considers the proposed IMA Amendment and the retention of the
services of the Investment Manager to be in the best interests of the Company
as the terms of the revised Investment Management Agreement will facilitate
the implementation of the Managed Wind-Down and incentivise the Investment
Manager to execute disposals in a timely manner and on terms that are in the
best interests of the Company and its Shareholders.

 

For the avoidance of doubt, the approval by Shareholders of the IMA Amendment
pursuant to Resolution 4 is conditional on the Investment Policy Amendment
being approved by Shareholders pursuant to Resolution 1.

 

Shareholder returns, capital returns and dividends

 

The Board will keep Shareholders informed of its intentions concerning returns
of capital, mechanisms for which may include tender offers, other schemes for
the return of capital and/or the buying back of Shares as the portfolio is
realised. Throughout the Managed Wind-Down, the Board will follow the
principle of seeking to balance the optimum scale and accompanying costs to
the Company of the relevant method of return with the desire to accomplish
that return as quickly as practicable, without eroding the value to be
distributed.

 

The Company intends to continue to pay dividends to Shareholders following the
commencement of the Managed Wind-Down in line with Shareholder feedback and in
order to maintain investment trust status. However the Company does not expect
to be able to continue paying dividends at the current rate. The payment of
any future dividends to Shareholders and the level of such dividends will
depend on the Group continuing to own assets which generate sufficient income
and cash flow to cover such dividends.

 

The Company intends to maintain its investment trust status and listing during
this managed realisation process prior to the Company's expected eventual
liquidation. Maintaining the listing would allow Shareholders to continue to
trade Shares during the Managed Wind-Down.

 

Unless there are other proposals which it considers to be in the Company's
best interests at the relevant time, the Board also expects to propose that
the Company enters into members' voluntary liquidation at a point when all or
most of the asset realisations have occurred, or at such other time that the
Board, in consultation with its advisers, deems to be appropriate and in the
interests of Shareholders. Any such proposed liquidation process would require
separate Shareholder approval.

 

Benefits of the Proposals

 

It is the assessment of the Board that the Proposals represent the optimal
method of delivering value for Shareholders and that the Managed Wind-Down
represents the best strategic option available to the Company and its
Shareholders. In addition, the Board believes that the Proposals offer the
following benefits to Shareholders:

 

(a)          commencing a managed realisation of assets, rather than
placing the Company in liquidation immediately or seeking an immediate sale of
the entire portfolio, is expected to enable the Company to maximise the value
realised on the sale of its investments;

 

(b)          the Field Sale would, if approved by Shareholders
pursuant to Resolution 2, facilitate the immediate repayment and cancellation
of the Revolving Credit Facility, the cost of which would be expected to
increase should it remain in place. TPLL, another member of the Triple Point
Group, is an acquirer with strong knowledge of the investment and is acquiring
the loan facility at its carrying value;

 

(c)           subject to the finalisation of the Company's plans to
return capital to Shareholders, the Company believes that the realisation
process should enable Shareholders to realise best value of their investment
over a period of time;

 

(d)          the IMA Amendment, including the proposed amendments to
the Investment Manager's fee structure outlined above, would, if approved by
Shareholders pursuant to Resolution 4, incentivise the Investment Manager to
execute disposals in a timely manner and on terms that are in the best
interests of the Company and its Shareholders;

 

(e)          maintaining the listing for as long as the Directors
believe it to be practicable during the Managed Wind-Down will enable certain
Shareholders to continue to meet their own investment restrictions, for
example, where they are required to hold listed securities or instruments with
daily liquidity; and

 

(f)           maintaining the listing of the Shares while the
substantial majority of its assets are realised will, subject to market
conditions, enable Shareholders and prospective investors to continue to be
able to buy and sell Shares in this period before the Company enters the
expected members' voluntary liquidation.

 

Risk factors

 

Shareholders should be aware of the risk factors set out in the Circular, as
replicated in the appendix to this announcement.

 

Consequences of the Proposals not being approved

 

The Board regards the orderly realisation of the Company's assets as the best
strategic option for Shareholders available. However, should Shareholders
reject Resolution 1, and therefore the proposed amendment to the investment
objective and policy to facilitate a managed wind-down of the Company, the
Board and the Investment Manager will continue to fulfil the existing
investment objective and policy and work to identify alternative options for
the future of the Company.

 

Each of the LED Facility Sale and the IMA Amendment are conditional on the
approval of the proposed amendment to the investment objective and policy to
facilitate a managed wind-down of the Company pursuant to Resolution 1 and,
therefore, if such proposed amendment is rejected by Shareholders, each of the
LED Facility Sale and the IMA Amendment will be deemed to have also been
rejected. The Field Sale is not conditional on the Investment Policy
Amendment, the LED Facility Sale and/or the IMA Amendment being approved by
Shareholders.

 

In the event that the Related Party Transactions are not approved by
Shareholders pursuant to Resolutions 2, 3 and 4, each of the Field Sale, the
LED Facility Sale and the IMA Amendment will fail, notwithstanding any
amendment to the investment objective and policy of the Company. In such
circumstances, the Board and its relevant advisers will review the relevant
transactions and put forward alternative proposals for Shareholder approval,
as appropriate.

 

In addition, in the event that Resolution 2 is not approved by Shareholders,
the Company will not be able to deploy the relevant portion of the proceeds
received from the Field Sale to repay the outstanding amount owed by the
Company under the Revolving Credit Facility. If the Revolving Credit Facility
is not repaid using the proceeds from the Field Sale, the Revolving Credit
Facility may need to be extended, which may attract a significantly higher
interest rate than the current fixed rate coupon of 6%.

 

Related Party Transactions

 

The Investment Manager is a related party of the Company on account of being
the Company's investment manager, pursuant to Listing Rule 15.5.4, and TPLL is
a related party of the Company on account of being a member of the Investment
Manager's Group pursuant to the same rule.

 

As a result, each of the Field Sale, the LED Facility Sale and the IMA
Amendment have been deemed to be related party transactions for the purposes
of Chapter 11 of the Listing Rules. The Board considers the Related Party
Transactions to be fair and reasonable as far as Shareholders are concerned
and the Directors have been so advised by J.P. Morgan Cazenove (acting in its
capacity as sponsor). In providing their advice to the Directors, J.P. Morgan
Cazenove have taken into account the Directors' commercial assessment of each
of the Related Party Transactions.

 

The General Meeting will be held at 9.30a.m. on 22 March 2024 at the Company's
registered office at 1 King William Street, London EC4N 7AF.

 

A copy of the Circular will shortly be made available on the Company's website
at  www.tpenergytransition.com (http://www.tpenergytransition.com) and
submitted to the National Storage Mechanism, where it will be available for
inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://eqs-cockpit.com/cgi-bin/fncls.ssp?fn=redirect&url=1e84eb6c3310c93f7fb161c09372521b&application_id=1521055&site_id=acquiremedia3&application_name=news)
.

 

 

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 and Sponsor)       +44 (0) 20 3493 8000

 William Simmonds

 Jérémie Birnbaum

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

 Tom Frost

 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 at:

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.

 

APPENDIX - RISK FACTORS

 

The risks and uncertainties set out below are those which the Directors
believe are the material risks relating to the Proposals. If any, or a
combination, of these risks materialise, the business operations, financial
condition and prospects of the Group could be materially and adversely
affected.

The risks and uncertainties described below are not intended to be exhaustive
and are not the only ones that face the Group. The information given is as at
the date of this announcement and, except as required by the FCA, the London
Stock Exchange, the Listing Rules and Disclosure Guidance and Transparency
Rules or other applicable laws and/or regulations, will not be updated.
Additional risks and uncertainties not currently known to the Directors, or
that they currently deem immaterial, may also have an adverse effect on the
business, financial condition, results of operations and prospects of the
Group.

Risks associated with the Proposals

·          There can be no guarantee that the Managed Wind-Down,
including the Investment Policy Amendment, will provide the returns, or
realise the value, described in this announcement or the Circular, and there
can be no assurance that the Company's investments will meet any specific
level of return, or that the Company would achieve or successfully implement
its investment objective as amended by the Investment Policy Amendment.

·          As a result of the Managed Wind-Down, the size and value
of the Group's portfolio will reduce over time as investments are realised and
be concentrated in fewer holdings, meaning that the aggregate return on the
remaining portfolio will become increasingly exposed to the performance,
favourable or unfavourable, of the remaining individual investments. This
could have the effect of making performance more volatile.

·          The proposed change of the Company's investment objective
and Investment Policy would result in the Company becoming reliant on the
Investment Manager's ability to effectively manage the disposal of (or
otherwise realise) investments in order to realise value for Shareholders. The
liquidity profile of the Group's portfolio is such that Shareholders may have
to wait a considerable period of time before receiving any returns of capital
or other distribution.

·          The Group's assets may not be realised at their carrying
value, and it is possible that the Group may not be able to realise some
assets at any value. In addition, there is no certainty as to the timing of
the realisation of any asset and/or the return of value to Shareholders. The
Managed Wind-Down may not be able to be implemented on a timely basis or
within a specific time frame if any assets are not capable of being sold
swiftly and on terms that are acceptable to the Board.

·          The market value of the Shares and the NAV of the Company
may go down as well as up. The market value of the Shares at any time may vary
significantly and not reflect the underlying NAV. Shareholders may not get
paid the amount they originally invested on a sale of their Shares or through
the process of the winding-down and any liquidation of the Company.

·          Sales commissions, liquidation costs, taxes and other
costs associated with the realisation of the Company's assets together with
the usual operating costs of the Company will reduce the cash available for
returning to Shareholders. No assurance can be given that cash received on
future realisations of the Company's investments will be returned as capital
or otherwise.

·          The maintenance of the Company as an ongoing listed
vehicle with its Shares admitted to listing on the premium segment of the
Official List and to trading on the premium segment of the Main Market of the
London Stock Exchange will entail administrative, legal and regulatory costs,
which will decrease the amount ultimately distributed to Shareholders.
Although the Board intends to maintain the Company's listing for as long as
the Directors believe it to be practicable during the orderly realisation, the
Directors shall promptly notify the FCA and may seek suspension of the listing
of the Shares pursuant to the requirements of the Listing Rules (which may
include Shareholder approval prior to any suspension or de-listing) if the
Company can no longer satisfy the continuing obligations for listing set out
therein including, but not limited to, the requirements in respect of Shares
held in "public hands" (as such phrase is defined in the Listing Rules) and in
relation to spreading investment risk, and consequently the listing of the
Shares may be suspended and/or cancelled. Once suspended and/or cancelled, the
Shares would no longer be capable of being traded on the London Stock
Exchange, which would materially reduce market liquidity in the Shares.

·          It should also be noted that there may be other matters
or factors which affect the availability, amount or timing of receipt of the
proceeds of realisation of some or all of the Group's investments. In
particular, any returns of value to Shareholders will decrease the size of the
Group's assets, thereby increasing the impact of fixed costs incurred by the
Group on the remaining assets. In determining the size of any returns of
value, the Directors will take into account the Group's ongoing running costs,
and the eventual liquidation costs of the Company. However, should these costs
be greater than expected or should cash receipts for the realisations of
investments be less than expected, this will reduce the amount available for
Shareholders in future returns of value.

·          Following the Investment Policy Amendment, the Company
will be unable to make new investments other than to honour existing
contractual commitments or to preserve the value of underlying security or
otherwise to invest realised cash in liquid cash-equivalent securities for the
purposes of cash management, pending its return to Shareholders, in accordance
with the Investment Policy Amendment. The value of such cash-equivalent
securities, including the Company's cash balances, may fluctuate and the
amount of value available to be returned to Shareholders may decrease as a
result.

·          While the Company intends to continue to pay dividends to
Shareholders following the commencement of the Managed Wind-Down, this is
reliant on, among other things, the Group continuing to own assets generating
sufficient income and cash flow in order to pay dividends. This means that
there can be no assurance that the Company will be able to make the dividend
payments which it expects to make.

·          In the event that Resolution 2 is not approved by
Shareholders, the Company will not be able to deploy the relevant portion of
the proceeds received from the Field Sale to repay the outstanding amount owed
by the Company under the Revolving Credit Facility. If the Revolving Credit
Facility is not repaid using the proceeds from the Field Sale, the Revolving
Credit Facility may need to be extended, which may attract a significantly
higher interest rate than the current fixed rate coupon of 6% which, in turn,
would reduce the amount available for Shareholders in future returns of value.

·          In the event that Resolution 4 is not approved by
Shareholders, the IMA Amendment would not become effective and the existing
fee arrangements contained in the Investment Management Agreement would
continue until such time that an alternative proposal was approved by
Shareholders. This may result in the Investment Manager not being adequately
incentivised to execute disposals in a timely manner and on terms that are in
the best interests of the Company and its Shareholders, and may therefore
adversely impact returns to Shareholders in connection with the Managed
Wind-Down.

·          In the event that the Field Sale and/or the LED Facility
Sale are not approved by Shareholders pursuant to Resolutions 2 and 3
respectively, alternative counterparties may need to be identified to acquire
the Field Debt Facility and/or the LED Facility who may not be willing to
acquire either of the facilities for carrying value. This may therefore
adversely impact returns to Shareholders in connection with the Managed
Wind-Down.

 

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