THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.

For immediate release

LEI: 213800UKH1TZIC9ZRP41                                                                                              

23 October 2025

Aquila European Renewables plc

Update on Managed Wind-Down and disposal of Danish and Greek wind assets

Aquila European Renewables plc ("AERI" or the "Company"), the London-listed investment company advised by Aquila Capital Investmentgesellschaft mbH ("Aquila Capital" or the "Investment Adviser"), provides the following update on the Managed Wind-Down including that it has entered into sale and purchase agreements with funds advised by Aquila Capital for the sale of its Danish and Greek wind assets.

Background to the Managed Wind-Down

Leading up to the 2023 continuation vote, the Company proactively explored multiple initiatives to attempt to address a number of issues that the sector was facing and secure recognition of the real underlying value of the portfolio in the share price. These initiatives included asset life extensions, share buybacks, debt financings and a secondary listing on Euronext Growth Dublin.

The continuation vote at the 2023 annual general meeting was passed. However, at the time the Board recognised the material issues the Company and the wider sector continued to face and committed to offering an additional continuation vote in 2024, and meanwhile, explored more significant initiatives, namely:

·      a combination with other investment companies by way of a scheme of reconstruction under section 110 of the Insolvency Act 1986 (the "Section 110 Process");

·      the sale of some or all of the Company's assets for cash;

·      a potential wind-down strategy with an orderly realisation of assets; and

·      the potential continuation of the Company in its then present form. 

Throughout this period, the Company and its advisers remained in regular contact with Shareholders who indicated an increasing interest in a solution that seeks to maximise value and liquidity.

Despite engaging with multiple parties as part of the Section 110 Process, AERI announced on 10 May 2024 that the Section 110 Process had been terminated in response to feedback from Shareholders, principally because of the issues facing the whole sector which meant that any proposal would not necessarily offer the desired liquidity or valuation for Shareholders.

A number of parties expressed an interest in a possible sale of some or all of the Company's assets for cash, including one potential bidder who made a proposal with respect to an acquisition of the entire issued and to be issued share capital of the Company (the "Takeover Code Offeror"). The Board determined that it was appropriate to provide the Takeover Code Offeror with access to detailed due diligence information. The Takeover Code Offeror did not make a proposal at a level which, in the Board's opinion and taking into account Shareholders' views on the value of the Company, would have been capable of recommendation to Shareholders if made as a firm offer at the time.

Whilst a potential transaction involving the portfolio as a whole offers the benefit of speed, owing to the diversified nature of the portfolio by geography and technology and given feedback received by interested parties who indicated interest in sub-portfolios as opposed to the portfolio as a whole, the Company opted to explore a managed wind-down process with an orderly realisation of assets. As part of this, the Company and its advisers have carefully considered the most effective sub-portfolios of assets taking in account geography, technology and scale to try and maximise the potential buyer universe of the portfolio in order to complete the sale process as quickly as possible and to provide liquidity to Shareholders at the highest valuation possible.

In H2 2024, the Company announced the disposal of its minority investment in the Norwegian wind asset, Tesla, for EUR 27.1 million, representing a 10.8% premium to the prevailing published fair value. The Company also published a circular to Shareholders setting out proposals for a discontinuation vote and to amend the investment policy to pursue the Managed Wind-Down strategy, which were subsequently both approved by Shareholders. The Company also noted that it had been in discussion with and received proposals from the Company's investment adviser Aquila Capital, in relation to the acquisition of the Company's portfolio. Whilst due diligence materials were shared and negotiations were held, no proposal was submitted that the Board considered would provide sufficient certainty to Shareholders, principally based on funding limitations of the proposed buyer. Nevertheless, communication between the Company and its investment adviser regarding a potential transaction remained open.

During Q4 2024 and Q1 2025, the Company commenced the significant preparation exercise required to undergo the Managed Wind-Down. Its first priority was to ensure it had the benefit of advisers with deep knowledge of the sector and after a selection process, appointed Rothschild & Co for this purpose. During that time, the Company received a proposal from a bidder (the "Preferred Bidder") for assets representing a majority of the portfolio. Following extensive negotiations, the Company agreed heads of terms for a proposal from the Preferred Bidder that it deemed attractive based on valuation and deliverability and, therefore, granted exclusivity to the Preferred Bidder who commenced confirmatory due diligence. In the meantime, the Company continued to pursue two other specific sale processes, including the announced sale of its minority investment in the Portuguese hydro asset, Sagres, for EUR 16.5 million[1] (the "Sagres Disposal"), representing the prevailing published fair valuation and a further process incorporating the remaining assets in the portfolio.

Owing to the deterioration in market conditions, events in the renewables markets where the Company's assets operate and specific issues impacting the Preferred Bidder (including investment restrictions pertaining to specific geographies, availability of funding and return requirements), the number of assets included and the valuation of the transaction with the Preferred Bidder reduced. As announced on 28 July 2025, the Board decided to pause the sales process with the Preferred Bidder, who was no longer in exclusivity but with whom dialogue remained open, and explore the implications of the above and the alternatives available to AERI.

Managed Wind-Down Update

The Company is now pleased to announce it has entered into share purchase agreements with funds advised by Aquila Capital for the sale of its Danish and Greek wind assets (Holmen II, Svindbaek and Desfina) for a total consideration of approximately EUR 61.9 million, representing a discount to prevailing fair valuation in the latest reported NAV as at 30 June 2025 of approximately 17% (the "Danish and Greek Disposals")[2]. Together with the sale of Sagres, which completed in June 2025, this represents a total cash consideration of EUR 78.3 million from sales to funds managed and/or advised by Aquila Capital, at a weighted average discount to the prevailing respective fair valuation in the latest reported NAV of approximately 14%. This represents a material uplift to the effective look through equity value implied by the Company's current share price, which currently trades at a discount to the latest reported NAV as at 30 June 2025 of approximately 37%[3]. The Danish and Greek Disposals are subject to regulatory and other customary approvals, with completion of both disposals (which are not inter-conditional) expected to occur by December 2025.

In parallel, due diligence and negotiations with multiple potential investors in relation to the remaining assets in the portfolio are progressing and the Board expects to have further updates on these discussions later this quarter.

Update on Olhava

Olhava continues to be in lock-up under the terms of its loan facilities due to debt covenant breaches as reported previously. As agreed with the lender, the Olhava SPV has suspended payments under the shareholder loan and of dividends until the end of June 2026. In September 2025 an equity cure of EUR 508k was paid from the Company's resources, taking the total equity cure paid to date to approximately EUR 1.2 million.

Constructive discussions with the lender continue in order to modify the terms of the loan. The Board and Investment Adviser continue to monitor the asset's performance closely.

Return of capital

Following the expected completion of the Danish and Greek Disposals by December 2025, the Company intends to make an initial distribution to the Company's Shareholders (the "Initial Distribution"). The total quantum of the Initial Distribution is expected to be no less than EUR 63 million, representing the majority of proceeds received from the Sagres Disposal and the Danish and Greek Disposals, excluding an appropriate cash buffer to ensure the Company can continue to meet its liabilities and commitments.

The Company will seek to effect the Initial Distribution in an efficient and fair manner that accounts for, among other things, the UK tax consequences for Shareholders and the composition of the Company's Shareholder register.

Further details regarding the Initial Distribution will be provided in due course.

Deutsche Numis (Corporate Broker)

Hugh Jonathan                                                                                                        +44 (0) 20 7260 1000

George Shiel  

www.aquila-european-renewables.com

Inside Information

The information contained within this announcement is deemed by AERI to constitute inside information as stipulated under the Market Abuse Regulation (EU) No.596/2014 (as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018). On the publication of this announcement via a Regulatory Information Service, such information is now considered to be in the public domain.

The person responsible for making this announcement is Jennifer Thompson of Apex Listed Companies Services (UK) Limited, the Company Secretary.

Important notices

This announcement may contain "forward-looking statements" with respect to certain of the Company's plans and its current goals and expectations relating to its future financial condition, performance, strategic initiatives, objectives and results. Forward-looking statements sometimes use words such as "aim", "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", "seek", "may", "could", "outlook" or other words of similar meaning. By their nature, all forward-looking statements involve risk and uncertainty because they relate to future events and circumstances which are beyond the control of the Company.

As a result, the actual future financial condition, performance and results of the Company may differ materially from the plans, goals and expectations set forth in any forward-looking statements. Any forward-looking statements made in this announcement by or on behalf of the Company speak only as of the date they are made. The information contained in this announcement is subject to change without notice and except as required by applicable law or regulation, the Company expressly disclaims any obligation or undertaking to publish any updates or revisions to any forward-looking statements contained in this announcement to reflect any changes in the Company's expectations with regard thereto or any changes in events, conditions or circumstances on which any such statements are based.

Neither the content of the Company's website (or any other website) nor the content of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into or forms part of this announcement.