Atrato Onsite Energy plc

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION.

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATON FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) 596/2014 AS IT FORMS PART OF UK DOMESTIC LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018, AS AMENDED. ON THE PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

FOR IMMEDIATE RELEASE

3 October 2024

Atrato Onsite Energy plc

Proposed Disposal of the Portfolio, Return of Capital and Notice of General Meeting for the Change of Investment Objective and Policy

The Board of Atrato Onsite Energy plc (the "Company") is pleased to announce that the Company has entered into a conditional agreement for the sale (the "Disposal") of the entirety of its portfolio of solar assets (the "Portfolio") to a joint venture vehicle owned by Brookfield and RAIM Apollo (as defined below), at a Headline Price of £218.7 million (as defined below).[1] The Company's Pro-forma Portfolio Valuation (as defined below) is £224.1 million[2].

Completion of the Disposal is outside the scope of the Company's existing investment objective and policy, and is therefore conditional upon Shareholder approval of a new investment objective and policy for the Company (together with the Disposal, the "Proposals"). Following the change of investment objective and policy and Completion of the Disposal, the Board intends to seek Shareholder approval for the voluntary liquidation of the Company with a view to distributing the Company's net assets to Shareholders as soon as reasonably practicable. It is anticipated that the liquidators will be in a position to make an initial distribution of substantially all of the net assets of the Company in February 2025, being approximately two months after the expected date of liquidation/delisting.

As described further below, the Board determined that a sale of the Portfolio was the best means of maximising Shareholder value against a backdrop of persistently wide share price discounts in the investment trust sector, the subscale nature of the Company and consistent shareholder feedback to sell the Portfolio.

Key Highlights

·     100 per cent. cash consideration with no financing conditions (100 per cent. equity financed)

·     In considering the merits of the Disposal, the Directors have taken into account both the Headline Price for the Portfolio and the Estimated Net Assets per Ordinary Share of 80.0 pence, which represents:

o   a premium of approximately 25.0 per cent. to the closing price of 64.0 pence per Ordinary Share on 2 October 2024 (being the latest practicable date prior to the publication of this announcement); and

o   a premium of approximately 19.6 per cent. to the three-month volume weighted average price of 66.9 pence per Ordinary Share as at 2 October 2024 (being the latest practicable date prior to the publication of this announcement)

·     The Company's latest portfolio valuation was calculated as at 31 March 2024 (coinciding with the Locked Box Date), resulting in a 31 March 2024 NAV of 90.0 pence per Ordinary Share. The Company subsequently made two quarterly dividend payments totalling 2.74 pence per Ordinary Share. The Estimated Net Assets per Ordinary Share inclusive of these dividends equates to 82.7 pence per Ordinary Share, which represents:

o  a discount of approximately 8.1 per cent. to the 31 March 2024 NAV of 90.0 pence per Ordinary Share

Juliet Davenport, Chair of the Company, commented: "The Board was very pleased with the interest shown in the Company. After a detailed analysis, the Board determined that a sale of the Portfolio to the Consortium was the best means of maximising Shareholder value against a backdrop of persistently wide share price discounts in the investment trust sector, the subscale nature of the Company and consistent Shareholder feedback to sell the Portfolio. Therefore, the Board unanimously considers the Proposals to be in the best interests of the Company and its Shareholders as a whole and unanimously recommends that Shareholders vote in favour of the change of investment objective and policy resolution at the General Meeting."

Steve Windsor, Investment Adviser of the Company, commented: "We are pleased to be able to deliver a liquidity event for Shareholders as well as the opportunity for the ROOF team to benefit from the backing of one of the largest global infrastructure investors. While it is disappointing that the team will be leaving Atrato after four years, we wish them all the best as they continue to grow one of the UK's leading C&I solar businesses." 

Gurpreet Gujral, Investment Adviser of the Company, commented: "I would like to express my gratitude for the support shown by our Shareholders since IPO. Your belief in our vision of delivering clean and economic energy directly to our C&I customers has been instrumental in making the Company the success it is today. I look forward to continuing the journey with all our valued customers - both present and future."

The sale will be effected through the disposal by the Company of the entire issued share capital of Atrato Onsite Energy Holdco Limited (the "Target"), being the entity that acts as the holding company for the entirety of the Portfolio, to the Purchaser at a locked box date of 31 March 2024 (the "Locked Box Date") (being the date of the latest portfolio valuation).

The Company has received written approval from the Financial Conduct Authority to adopt the new investment objective and policy described above and set out in Appendix 6 and, accordingly, in accordance with the UK Listing Rules, Shareholder approval is now being sought for approval of the new investment objective and investment policy. Completion of the Disposal is therefore conditional upon the approval of the Resolution at the General Meeting. Accordingly, a circular will be sent to Shareholders (the "Circular") by 4 October 2024 containing further details of the Disposal and convening a general meeting of the Company (the "General Meeting") at which the Resolution to approve the revised investment objective and policy will be proposed to Shareholders. The General Meeting is to be held at the offices of Stifel Nicolaus Europe Limited, 4th Floor, 150 Cheapside, London EC2V 6ET at 3:30 p.m. on 22 October 2024. Further details of the Resolution will be provided in the Circular.

The Circular and the Notice of General Meeting will be available for viewing on the Company's website at https://atratorenewables.com/ by 4 October 2024. The Circular and the Notice of General Meeting will also be submitted to the National Storage Mechanism of the Financial Conduct Authority and will be available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism.

Background to the Disposal

In arriving at their recommendation, the Directors have factored in, and remain confident that, the Company's high-quality portfolio, investment management platform and extensive pipeline provide a foundation for continued growth and sustainable risk-adjusted returns. However, the Directors believe that neither these attributes nor the attractive underlying UK C&I solar sector dynamics, have been reflected in the current share price, with a significant de-rating experienced over the last year exacerbated by the higher interest rate environment. As a consequence of the Ordinary Shares trading at a material and persistent discount to the NAV over the last year, the Company has not been able to issue new shares in order to achieve more meaningful scale and greater liquidity due to the material NAV dilution that would result as a consequence of issuing shares at a discount to NAV. As a result, access to growth capital to pursue its extensive pipeline of around £400 million into more accretive investments, such as installation projects, has been severely constrained. Consequently, the Company is restricted in undertaking these growth activities and in its ability to make new investments.

Furthermore, the subscale nature of the Company within the alternatives UK investment trust universe has resulted in a lack of buyers in the secondary market whose demand could, otherwise, re-rate the Company's shares and provide trading liquidity.

Consequently, whilst the Directors remain confident in the standalone prospects for the Company, it was against this backdrop that the Directors received an unsolicited offer for the Portfolio from the Consortium on 13 March 2024. Following a period of negotiations, the Directors believe the offer provides an opportunity for all Shareholders to realise a clean cash exit at a premium to the Company's share price as at 2 October 2024 (being the latest practicable date prior to the publication of this announcement). In addition, the Directors believe that the certainty of execution and acceleration of value crystallisation, whilst eliminating the associated uncertainties, is beneficial to Shareholders and is in excess of the reasonable medium-term prospects for the Company on a standalone basis.

In addition to the financial terms of the Disposal, the Board recognises that the Company's portfolio and growth is an important contributor to the UK's net zero ambitions. The Board views the Consortium as a suitable custodian of the Company's assets from the perspective of all stakeholders, taking into account Brookfield's proven track record, standing in the renewable power and climate transition space and ESG values. In particular, the Disposal provides continuity to the Company's corporate, industrial and residential partners with the stated intention that individuals from the Investment Adviser will continue to help manage and scale the Portfolio.

Having regard to all of the above factors, and after detailed negotiations, the Board has determined that the Proposals are in the best interests of the Company and its Shareholders as a whole. The Board was pleased with the interest shown in the Company by the Consortium, and after in-depth consideration of the offer and consistent Shareholder feedback to sell the portfolio, the Board concluded that realising the Company's assets and putting the Company in a position to return cash to Shareholders represented the best means of maximising Shareholder value.

Information on the Portfolio

The Portfolio has been assembled by the Investment Adviser since the Company's initial public offering on 23 November 2021. The key individuals at the Investment Adviser responsible for the Portfolio are Gurpreet Gujral and Gustaf Schuler. As at the Latest Practicable Date:

·    the Company had committed or deployed funding into UK solar technology across 51 projects with a combined capacity of 204 MW, across 14 offtakers

·    the Portfolio is 100 per cent. operational assets

·    93 per cent. of annual revenue was contracted under PPAs or subsidies with (i) 91 per cent. of revenue subject to inflation or fixed uplifts and (ii) 48 per cent. of revenue subject to uncapped annual RPI or CPI uplifts

·    the Portfolio has a 14.2 year average unexpired contract revenue term

·    weighted average remaining asset life of the Portfolio of around 26 years

For the financial year ended 30 September 2023, the Target generated profit of £2.3 million[3] and during the period from 1 October 2023 to 31 August 2024, the Target generated profit of £2.6 million[4].

The Company's latest portfolio valuation was as at 31 March 2024, which was verified by its independent valuer. Since 31 March 2024, the Company has made further investments (held at cost) which were funded through a combination of cash and further drawdown on the Revolving Credit Facility. The Company's pro-forma Portfolio valuation was £224.1 million^[5] as at the Latest Practicable Date (the "Pro-forma Portfolio Valuation").

Information on the Consortium

Phoenix UK Bidco Limited (the "Purchaser"), is a newly incorporated company which is indirectly owned by a joint venture vehicle of BGTF Proton Holdings Limited ("Brookfield"), an affiliate of Brookfield Asset Management Ltd (NYSE: BAM, TSX:BAM), and Apollo Power Ltd ("RAIM Apollo", together with Brookfield, the "Consortium"), an affiliate company of Real Assets Investment Management Ltd ("RAIM"), established for the purposes of the acquisition of the Portfolio. The Purchaser will on Completion be indirectly owned 66.67 per cent. by Brookfield and 33.33 per cent. by RAIM Apollo.

Brookfield

·   BGTF Proton Holdings Limited is an affiliate of Brookfield Asset Management Ltd. (NYSE: BAM, TSX: BAM), a leading global alternative asset manager with approximately US$1 trillion in assets under management, operating in over 30 countries on five continents across the globe and is one of the world's largest investors in renewable power and climate transition assets, with c.34,000 MW of generating capacity across a portfolio of hydro, wind, solar, distributable energy and sustainable solutions. Brookfield Asset Management Ltd. has over 7,500 power generating facilities and c.7,700 MW of generating capacity from solar operations

RAIM Apollo

·   Apollo Power Ltd is an affiliate of RAIM, a specialist infrastructure and energy investment manager headquartered in London, UK. It is focused on originating and actively managing differentiated investment opportunities on behalf of institutional investors. RAIM invests in and advises on opportunities across a broad range of sectors, including renewable energy, social infrastructure and transportation. Since establishment in 2019, RAIM has successfully transacted and managed equity investments in excess of €750 million

The Consortium and the Investment Adviser have agreed the terms of an arrangement under which the Investment Adviser (including its affiliates) have entered into a non-compete agreement with the Purchaser and shall also be entitled to a share of economics, once certain criteria have been met, upon a future exit of the business. The employment of certain employees of the Investment Adviser (the "Management Team") will automatically transfer to an affiliate of the Purchaser on Completion. It is expected that the Investment Adviser will provide limited transitional services to the Portfolio following completion of the Disposal.

Principal terms of the Disposal

·    On 2 October 2024, the Company entered into a sale and purchase agreement with the Purchaser (the "Sale Agreement"), pursuant to which the Company has agreed, on the terms and subject to the conditions set out in the Sale Agreement, to sell the Target to the Purchaser

·    The Sale Agreement contains certain warranties, covenants, undertakings and indemnities given by the Company and the Purchaser which are customary for a transaction of this nature

·  The consideration is an amount determined by the Company and Purchaser by reference to the Consortium's Headline Valuation of the Company's portfolio of solar assets as at 31 March 2024[6] and increased on a pound for pound basis by (i) amounts drawn down under the Revolving Credit Facility; and (ii) a portion of the Company's cash, in each case invested by the Target in further investments (including costs) and/or used for the purposes of financing future investments, in each case since 31 March 2024 (the "Headline Price"), and subject to certain customary adjustments, as set out in more detail in Appendix 5 under the heading "Sale Agreement"

·    Completion of the Disposal is conditional upon the satisfaction (or waiver where applicable of the following Conditions) (i) the passing of the Resolution at the General Meeting and (ii) the Noteholders Consent having been obtained

·   The Board expects that, subject to the satisfaction and/or waiver (where applicable) of the Conditions, Completion will occur in early to mid-November 2024. The expected timetable of principal events for the Disposal is set out below

The Sale Agreement contains certain deal protection provisions (together, the "Deal Protection Provisions") which subject to the limited exceptions set out below:

·      prevent the Company from:

o  soliciting interest from or engaging or negotiating with any third party in respect of any Alternative Proposal (beyond rejecting the approach or seeking clarification of its terms);

o  sharing confidential information with a third party in connection with any Alternative Proposal;

o  postponing, adjourning or cancelling the General Meeting or amending the Resolution; or

o  changing or withdrawing the Recommendation; and

·     in the event the Company or any third party makes an announcement via a Regulatory Investment Service in relation to the Disposal or any Alternative Proposal, require the Company to promptly restate the Recommendation

If a third party notifies the Company or announces publicly that it is considering making a Cash Offer prior to Shareholders passing the Resolution at the General Meeting and the Board considers (acting reasonably) that the approach may lead to a Superior Cash Offer, the Company may engage with the third party provided that: (i) it must decide whether to engage with the third party within four Business Days of the date of first approach; and (ii) if it decides to engage with the third party, it must notify the Purchaser that an approach has been made. In these circumstances:

·      the restrictions on engaging, negotiating and sharing confidential information with that third party in connection with the possible Cash Offer will fall away, and the Company will be permitted to adjourn or postpone the General Meeting on one occasion only by up to seven calendar days from the date of first approach by the third party; and

·       the Purchaser will have a right to terminate the Sale Agreement at any time up to the day prior to the General Meeting.

If a third party makes a Cash Offer prior to Shareholders passing the Resolution at the General Meeting which in the Board's reasonable opinion is a Superior Cash Offer, then the Board will be entitled to withdraw the Recommendation and the Deal Protection Provisions will cease to apply. In such circumstances, unless the Company promptly restates the Recommendation and rejects the Cash Offer, a break fee equal to one per cent. of the Company's market capitalisation as at close of business on the last Business Day prior to the date of this announcement (being approximately £0.96 million) will be payable by the Company to the Purchaser:

·           on the Cash Offer being declared wholly unconditional, or, if implemented by way of a scheme of arrangement, becoming effective; or

·           in the event the Cash Offer lapses or is withdrawn, on the later of the Longstop Date and five Business Days after such lapse or withdrawal.

The Purchaser will also be entitled (at its option) to payment of the Break Fee if the Recommendation is changed or withdrawn in any other circumstances as an alternative to pursuing remedies for breach of the Deal Protection Provisions.

The Company is also obliged to reject any Alternative Approach following Shareholders passing the Resolution at the General Meeting.    

Financial effects of the Disposal on the Company

·   The Portfolio comprises the entire business of the Company. After taking into account the net proceeds from the Disposal, the Company's known liabilities, service provider termination costs, estimated advisory and transaction costs, and estimated net interest income, the Company expects to have Estimated Net Assets of approximately £120.0 million, equivalent to 80.0 pence per Ordinary Share

·     Following the 31 March 2024 Locked Box Date and latest portfolio valuation date, the Company has made two quarterly dividend payments equalling 2.74 pence per share in aggregate

·     The Estimated Net Assets per Ordinary Share of 80.0 pence represents:

o  a 25.0 per cent. premium to the Ordinary Share price of 64.0 pence as at the Latest Practicable Date; and

o  a 19.6 per cent. premium to the volume weighted average price of 66.9 pence per Ordinary Share for the three-month period to the Latest Practicable Date

·   The Estimated Net Assets per Ordinary Share, inclusive of the two dividends paid since 31 March 2024, equates to 82.7 pence per Ordinary Share representing:

o  a discount of approximately 8.1 per cent. to the 31 March 2024 NAV of 90.0 pence per Ordinary Share

·  The Investment Adviser will provide limited transitional services to the Portfolio, and otherwise, the Consortium will take over the management of all the assets within the Portfolio immediately upon Completion. The Company will not, therefore, incur costs in implementing transitional services arrangements in respect of the Portfolio going forward

·   In anticipation of Completion and the proposed liquidation of the Company, the Company has served notice of termination on certain key service providers or agreed with certain key service providers, being the AIFM, the Investment Adviser, and Company Secretary that the provision of such services will cease on the Company entering into a voluntary liquidation

Use of net cash reserves

·      If the Disposal becomes unconditional and proceeds to Completion, it is the intention of the Board to seek Shareholder approval for the voluntary liquidation of the Company with a view to distributing the Company's net assets to the Shareholders as soon as reasonably practicable. It is anticipated that the liquidators will be in a position to make an initial distribution of substantially all of the net assets of the Company in February 2025, being approximately two months after the expected date of liquidation/delisting). This timeline is to allow (a) the liquidators to comply with their obligation to give all actual and/or contingent creditors of the Company notice of the liquidation and the requirement to submit claims to the liquidators by a last proving date, which must be a minimum period of 21 days from the date of the notice; and (b) the liquidators to adjudicate and pay (if accepted) and/or reserve sufficient funds to pay any claims received. The Company also anticipates paying at least one further dividend in the period between Completion and the Company entering into liquidation.

·    The Board intends to hold the proceeds of the Disposal in gilts, money market instruments and/or interest bearing current accounts prior to the voluntary liquidation of the Company

Investment Trust Status and Listing

·     The Company intends to maintain its investment trust status and listing in the period immediately prior to the Company's voluntary liquidation. Maintaining the listing would allow Shareholders to continue to trade Ordinary Shares during the intervening period. In order to maintain its investment trust status, the Company anticipates paying at least one further dividend in the period between Completion and the Company entering into liquidation

Irrevocable undertakings

·     The Company has received irrevocable undertakings to vote in favour of the Resolution from the Directors and certain key individuals at the Investment Adviser in respect of, in aggregate, 2,096,457 Ordinary Shares, representing approximately 1.40 per cent. of the Company's issued Ordinary Share capital as at 2 October 2024.

General Meeting

·     The Disposal is conditional on the passing of the Resolution at the General Meeting. Notice of the General Meeting, which will be held at the offices of Stifel Nicolaus Europe Limited, 4th Floor, 150 Cheapside, London EC2V 6ET at 3:30 p.m. on 22 October 2024, will be set out in the Circular, which is expected to be published by 4 October 2024

·   The General Meeting is being held for the purposes of considering and, if thought fit, passing the Resolution. The Resolution seeks Shareholder approval for a revised investment objective and policy (the full text of which is set out in Appendix 6). The Resolution will be proposed as an ordinary resolution, requiring a majority of votes cast to be in favour for the Resolution to be passed

·   In the event that the Resolution is not passed and, as a result, the Disposal does not proceed, the Company will be liable to pay its own abort costs, which are expected to be approximately £1.4 million

Recommendation

·      The Board considers that the Proposals and the passing of the Resolution are in the best interests of the Company and its Shareholders as a whole. Accordingly, the Board unanimously recommends that Shareholders vote in favour of the Resolution to be proposed at the General Meeting, as the Directors intend to do in respect of their own beneficial holdings, which, in aggregate, amount to 72,980 Ordinary Shares, representing approximately 0.05 per cent. of the Company's issued Ordinary Share capital as at 2 October 2024

Expected timetable of principal events

The expected timetable of principal events in relation to the Proposals is as follows:

Stifel Nicolaus Europe Limited is acting as Sole Financial Adviser and Corporate Broker to the Company. Gowling WLG (UK) LLP is acting as Legal Adviser to the Company.

Defined terms used in this announcement shall, unless the context requires otherwise, have the meanings ascribed to them in the body of this announcement and Appendix 7.

For further information, please contact:

Notes to Editors

Atrato Onsite Energy plc (LSE: ROOF) is an investment company specialising in clean energy generation with 100% carbon traceability. The Company focuses on UK solar, helping its clients achieve net zero and reduce their energy bills.

The Company aims to provide investors with attractive capital growth and long dated, index-linked income, targeting a 5% dividend yield and a NAV total return of 8 - 10%⁽¹⁾. Its shares were admitted to trading on the premium segment of the Main Market of the London Stock Exchange on 23 November 2021. Atrato Partners Limited is the Company's Investment Adviser.

 The Company's LEI is 213800IE1PPREDIIZB62.

(1)  The targets set out above are targets only and not profit forecasts. There can be no assurance that these targets will be met.

IMPORTANT NOTICE

This announcement contains inside information as stipulated under the Market Abuse Regulation (EU) No.596/2014 (incorporated into UK law by virtue of the European Union (Withdrawal) Act 2018 as amended by virtue of the Market Abuse (Amendment) (EU Exit) Regulations 2019/310). Upon the publication of this announcement via a Regulatory Information Service, this inside information will be considered to be in the public domain.

The person responsible for arranging release of this announcement on behalf of Atrato Onsite Energy plc is Christopher Fearon, Investor Relations Director at Atrato Group.

The Disposal is classified as a "significant transaction" under Listing Rule 7 under each of the gross assets and consideration class tests. The Company is therefore required to make this significant transaction notification pursuant to Listing Rule 7.3.1R. Further information relating to the Disposal, as required by the new Listing Rule 7 is set out in the Appendices 1 to 5 to this announcement.

This announcement is not intended to and does not constitute an offer to sell or the solicitation of an offer to subscribe for or buy or an invitation to purchase or subscribe for any securities or the solicitation of any vote in any jurisdiction. Shareholders are advised to carefully read the Circular once it has been published. 

The release, publication or distribution of this announcement in jurisdictions outside the United Kingdom may be restricted by law and therefore persons into whose possession this announcement comes should inform themselves about, and observe such restrictions. Any failure to comply with such restrictions may constitute a violation of the securities law of any such jurisdiction.

Stifel Nicolaus Europe Limited ("Stifel") which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting as sole financial adviser and corporate broker exclusively for Atrato Onsite Energy plc and no one else in connection with the matters set out in this announcement and will not regard any other person as its client in relation to the matters set out in this announcement and will not be responsible to anyone other than Atrato Onsite Energy plc for providing the protections afforded to clients of Stifel, nor for providing advice in relation to any matter referred to herein.

Apart from the responsibilities and liabilities, if any, which may be imposed upon Stifel by FSMA or the regulatory regime established thereunder, neither Stifel nor any of its associates or affiliates (nor their respective directors, officers, employees or agents) accepts any responsibility whatsoever or makes any representation or warranty, express or implied, concerning the contents of this announcement, including its accuracy, completeness or verification, or concerning any other statement made or purported to be made by it or them, or on its or their behalf, the Company or the Directors in connection with the Company or the Proposals, and nothing in this announcement is, or shall be relied upon as a promise or representation in this respect, whether as to the past or future. Stifel and its associates and affiliates (and their respective directors, officers, employees or agents) accordingly disclaim, to the fullest extent permitted by law, all and any responsibility and liability whether arising in tort, contract or otherwise (save as referred to herein) which it or they might otherwise have in respect of this announcement or any such statement.

Market and industry information

Certain information in this announcement has been sourced from third parties. All information contained in this announcement that has been sourced from third parties has been accurately reproduced and, as far as the Company is aware and is able to ascertain from information published by the relevant third party, no facts have been omitted that would render the reproduced information inaccurate or misleading.

All references to market data, industry statistics and forecasts and other information in this announcement consist of estimates based on data and reports compiled by industry professionals, organisations, analysts, publicly available information or the Company's own knowledge of the relevant markets.

Market data and statistics are not necessarily reflective of actual market conditions. Such statistics are based on market research, which itself is based on sampling and subjective judgements by both the researchers and the respondents, including judgements about what types of products and transactions should be included in the relevant market. In addition, the value of comparisons of statistics for different markets is limited by many factors, including that: (i) the markets may be defined differently; (ii) the underlying information may be gathered by different methods; and (iii) different assumptions may be applied in compiling the data. Accordingly, any market statistics included in this announcement should be viewed with caution.

Information regarding forward-looking statements

This announcement contains statements which are, or may be deemed to be, "forward-looking statements" which are prospective in nature. All statements other than statements of historical fact are forward-looking statements. They are based on intentions, beliefs and/or current expectations and projections about future events, and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements. Often, but not always, forward-looking statements can be identified by the use of a date in the future or forward-looking words such as "plans", "expects", "is expected", "is subject to", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", "believes", "targets", "aims", "projects" or words or terms of similar substance or the negative of those terms, as well as variations of such words and phrases or statements that certain actions, events or results "may", "could", "should", "would", "might" or "will" be taken, occur or be achieved. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding future expectations or events that are beyond the Company's control. Forward-looking statements include statements regarding the intentions, beliefs or current expectations of the Company concerning, without limitation, the business, results of operations, financial condition, liquidity, prospects, growth and strategies of the Company.

Such forward-looking statements involve known and unknown risks and uncertainties that could significantly affect expected results and are based on certain key assumptions. Many factors may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Important factors that could cause the actual results, performance or achievements of the Company to differ materially from the expectations of the Company include, amongst other things, general business and economic conditions globally, industry and market trends, competition, changes in government and changes in law, regulation and policy, including in relation to taxation, interest rates, the impact of any acquisitions or similar transactions, IT system and technology failures, political and economic uncertainty and other factors. Such forward-looking statements should therefore be construed in the light of such factors.

Neither the Company nor any of its Directors, officers or advisers provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this announcement will actually occur. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof.

Forward-looking statements contained in this announcement apply only as at the date of this announcement. Other than in accordance with its legal or regulatory obligations (including under the Listing Rules, the Disclosure Guidance and Transparency Rules and UK MAR) the Company is not under any obligation and the Company expressly disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The information in this announcement is subject to change without notice.

Websites

Neither the contents of the Company's, the AIFM's or the Investment Adviser's website nor any website accessible by hyperlinks on the Company's, the AIFM's or the Investment Adviser's website is incorporated in, or forms part of, this announcement.

No profit forecast or estimate

No statement in this announcement is intended as a profit forecast or profit estimate for any period and no statement in this announcement should be interpreted to mean that earnings, earnings per Ordinary Share or income, cashflow from operations or free cashflow for the Company or the Target Group, as appropriate, for the current or future financial years would necessarily match or exceed the historical published earnings, earnings per Ordinary Share or income, cashflow from operations or free cashflow for the Company or the Target Group, as appropriate.

Presentation of financial information

References to "£", "pounds Sterling", "Sterling", "p" and "pence" are to the lawful currency of the United Kingdom.

References to "US$" are to the lawful currency of the United States.

Rounding

Certain data in this announcement, including financial, statistical and operating information have been rounded, and, as a result of this rounding, the totals of data presented in this announcement may vary slightly from the actual arithmetic totals of such data. In certain instances, the sum of the numbers in a column or row in tables contained in this announcement may not conform exactly to the total figure given for that row or column. Percentages in tables may have been rounded and accordingly may not add up to 100 per cent. or to the precise sum of the totals expressed in such tables.

Appendix 1 - Risks Factors

Risks relating to the Disposal

·    The Disposal may be delayed or may not proceed to Completion

Completion of the Disposal is conditional upon the satisfaction or waiver (as applicable) of the Conditions on or before the Longstop Date, after which either the Company or the Purchaser may terminate the Sale Agreement. Whilst the Company and the Purchaser have obligations in relation to the satisfaction of these Conditions, there can be no assurance that the requisite approval from Shareholders or the other Condition will be satisfied or waived (to the extent it is capable of being waived). Further, there can be no assurance that the satisfaction of these Conditions will not be delayed due to factors outside the control of the Company and/or the Purchaser. The Disposal may, therefore, be delayed or not complete at all. Additionally, if Completion is deferred more than once because a party fails to satisfy its Completion obligations, then the other party could become entitled to terminate the Sale Agreement. The Purchaser may terminate the Sale Agreement prior to Completion without liability on its part upon any of the following events:

o   a breach by the Company of any of the fundamental warranties, relating to (i) title to the Target's shares, (ii) power and authority of the Company, (iii) the ownership of the Target Group and (iv) the solvency of the Company and the Target Group, if they were repeated on Completion; or

o   a material breach of certain agreed pre-completion undertakings; or

o   a catastrophic event which has the effect of extinguishing 10 per cent. of the generating capacity of the projects owned by the Target Group; or

o   where the security created by the RCF Security Documents has been enforced or the debt has been accelerated, or mandatory prepayment demanded under the Revolving Credit Facility Agreement.

In addition, the Purchaser may terminate the Sale Agreement at any time up to the day prior to the General Meeting where a third party has notified the Company or announced publicly that it is considering making a Cash Offer and the Board has decided to engage with such third party where it considers (acting reasonably) that the approach may lead to a Superior Cash Offer.

If the Disposal does not proceed to Completion, the Company will not receive the net proceeds from the Disposal. Additionally, any delay in completing the Disposal may result in the accrual of additional costs without any of the potential benefits of the Disposal having been achieved.

·    The Company may incur liability under the Sale Agreement

The Sale Agreement contains certain customary warranties and indemnities given by the Company in favour of the Purchaser. The Purchaser has undertaken due diligence in connection with the Disposal and the Company has disclosed matters against the warranties and has taken steps to minimise the risk of liability under these provisions. In addition, the Purchaser has obtained warranty and indemnity insurance in respect of the warranties and tax covenant under the Sale Agreement. Although the liability of the Company under the warranties and tax covenant is limited to £1 under the Sale Agreement, claims other than in respect of the warranties or tax covenant given by the Company would not be covered by this £1 cap and, following Completion, the Company retains liability in respect of any other non-warranty and non-tax covenant claims, subject to customary liability caps.

Any liability to make a payment arising from a successful claim by the Purchaser under the Sale Agreement could have a material adverse effect on the Company's financial condition and impact on the amount and timing of any distributions of the sale proceeds.

·    Third party interference with the Disposal

As the Company is listed, it is exposed to potential approaches from third parties seeking to instigate a public takeover of the Company prior to the date of the General Meeting. The Company might also be approached by a third party seeking to make a more favourable offer for the Target Group than that of the Purchaser prior to the date of the General Meeting. The Sale Agreement contains certain Deal Protection Provisions which limit the action the Company can take in connection with any Alternative Proposal, including the Company's ability to engage with any third party in respect of an Alternative Proposal, as detailed under the heading "Sale Agreement" in Appendix 5.

In circumstances where the Company engages with a third party in respect of a possible Cash Offer where permitted under the Deal Protection Provisions, this will give rise to a right for the Purchaser to terminate the Sale Agreement at any time up to the day prior to the General Meeting. 

Further, in circumstances where a third party makes a Cash Offer prior to satisfaction of the Shareholder Approval Condition then, unless the Company promptly restates the Recommendation and rejects the Cash Offer, a break fee equal to one per cent. of the Company's market capitalisation as at close of business on the last Business Day prior to the date of announcement of the Disposal (being approximately £0.96 million) will become payable as detailed under the heading "Sale Agreement" in Appendix 5.

If the Company were to terminate the Sale Agreement other than in accordance with its terms, or were to otherwise breach the terms of the Sale Agreement, the Company may be found liable to pay damages to the Purchaser in respect of the loss it has suffered as a result of such termination or breach. Alternatively, at a court's discretion, the Company may be ordered to perform its obligations under the Sale Agreement if such performance remained possible. In addition, where the breach amounted to the change or withdrawal of the Recommendation otherwise than as permitted under the Sale Agreement, the Purchaser will be entitled (at its option) to payment of the Break Fee as an alternative to pursuing remedies for breach of contract. There can be no certainty as to the amount of any damages that the Company may be required to pay, although such damages typically seek to provide redress to a party as if the breached contract had been properly performed.

·      Costs and expenses related to the Disposal could exceed amounts currently estimated

Whilst the Board believes it has appropriate arrangements in place to manage the expected costs and expenses in relation to the Disposal, including post-Completion costs, there can be no assurance that the costs and expenses will not exceed the amounts currently estimated. There may also be further additional and unforeseen expenses incurred in connection with the Disposal either due to delays or otherwise. Such costs and expenses may adversely affect the Estimated Net Assets that the Company expects to have (if approved in due course by Shareholders) at the date of liquidation of the Company and the amount available for distribution.

Risks relating to the Company arising in connection with the Disposal

·      Loss of Consideration

If the Disposal does not complete, the Company will not receive the consideration from the Disposal and, consequently, the transaction costs incurred by the Company in connection with the Disposal that are not contingent on Completion occurring would not be offset by such consideration. In the event that Completion does not occur, the Company will be liable to pay its own abort costs and, in certain specified circumstances, the Company may also be liable to pay the Break Fee, as detailed above. In addition, the market's perception of a failed transaction could result in a negative impact on the market price of the Ordinary Shares and the Company's financial condition, results of operations and prospects.

·      Loss of Shareholder value

The Board believes that the Disposal is in the best interests of Shareholders and the Company taken as a whole and that the Disposal currently provides the best opportunity to realise an attractive and certain value for the Portfolio. If the Disposal does not complete, the subsequent value of the Portfolio may be lower than can be realised by way of the Disposal. This could result in the financial position of the Company being materially different to the position it would have been in if the Disposal had completed.

·      No assurance of a future sale

If the Disposal does not complete, there can be no assurance that the Company would be able to realise the assets comprising the Portfolio (either individually, in parcels or as a whole) at a later date, at an improved, or equivalent, or favourable valuation or at all.

·      Potentially disruptive effect on the Company

To preserve Shareholder value in the event the Disposal does not complete, the Board and Investment Adviser may be required to allocate additional time and cost to the ongoing assessment of how best to maximise Shareholder value in the medium term. This may limit the management and financial resources available to manage the Portfolio and adversely affect the Company's financial condition and results of operations.

·    The announcement of the Disposal may have a disruptive effect on the operation of the Target Group

The Sale Agreement requires the Company to procure that each member of the Target Group continues its business in the ordinary course prior to Completion. The Company is reliant on the skills and expertise of certain individuals at the Company's third-party service providers, in particular the Investment Adviser, in order to maintain effective management of the Portfolio. The announcement of the Disposal may negatively impact the performance of such individuals at the Company's key service providers. Such outcome may impact the Company's financial position and prospects in the event that Completion does not occur.

·      Pre-Completion changes in the Portfolio

During the period from the signing of the Sale Agreement to Completion, events or developments may occur, including changes in the investment performance and outlook of the Portfolio, or external market factors, that could make the terms of the Sale Agreement less attractive for the Company. Subject to the satisfaction or waiver of the Conditions (to the extent they are capable of being waived) before the Longstop Date, the Company would be obliged to complete the Disposal notwithstanding such events or developments. This may have an adverse impact on the value the Company is able to realise for Shareholders.

Risks relating to the change of investment objective and policy

·      No Guarantee of returns

There can be no guarantee that the change to the Company's investment objective and policy will provide the returns, or realise the value, described in this Circular. Whilst proceeds of the Disposal will be held in gilts, money market instruments and/or interest bearing current accounts, which are historically less volatile than other investments, there can be no guarantee that they will provide a positive return to the scale anticipated by the Company and therefore the amount returned to Shareholders may be impacted.

·      No ability to make further investments where the Disposal does not proceed to Completion

If Shareholders vote in favour of the Resolution to change the investment objective and policy and the Disposal does not proceed to Completion, the Company would not be able to continue making investments in accordance with its current investment objective and policy and would be required to seek Shareholder approval and incur additional costs to further amend its investment objective and policy to do so.        

·      No guarantee of retaining investment trust status

As an approved investment trust for the purposes of Chapter 4, Part 24 of the Corporation Tax Act 2010, the Company is not currently subject to UK corporation tax on its chargeable gains. Approved investment trust status is available on an accounting period by accounting period basis and requires that the Company satisfies a number of conditions throughout the relevant accounting period. The fact that the Company may come to hold the proceeds of the Disposal in gilts, money market instruments and/or interest bearing current accounts as it seeks to achieve its revised investment objective of realising its assets and returning cash to Shareholders may mean that it fails to satisfy these conditions. In any accounting period in which the Company fails to satisfy any of the conditions which it is required to satisfy in order to maintain its approved investment trust status, any chargeable gains which the Company makes in that accounting period, which are not offset by tax losses, may become subject to UK corporation tax, which could materially reduce the amount of value available to be returned to Shareholders.

Existing material risks to the Company that will be impacted by the Disposal

The Company's operations will be materially less diversified and, therefore, materially more susceptible to specific risks.

·      The Portfolio comprises the entire business of the Company. After Completion, the Company and will have no other assets and the Board intends to seek Shareholder approval for the voluntary liquidation of the Company.

Following the Disposal and prior to the Company entering into voluntary liquidation, the Company expects to hold gilts, money market instruments and/or cash and to have no other assets. Weak performance of gilts, money market instruments and/or cash, whether as a result of interest rate movements and/ or inflation, or otherwise, will have a proportionately greater adverse impact on the financial condition and valuation of the Company and a greater risk of Ordinary Share price volatility following the Disposal than would have been the case prior to the Disposal.

·      Inability to realise Shareholder value

If the Disposal becomes unconditional, it is the intention of the Board to seek Shareholder approval for the voluntary liquidation of the Company with a view to distributing the Company's net assets to the Shareholders as soon as reasonably practicable. It is anticipated that the liquidators will be in a position to make an initial distribution of substantially all of the net assets of the Company in February 2025, being approximately two months after the expected date of liquidation/delisting). This timeline is to allow (a) the liquidators to comply with their obligation to give all actual and/or contingent creditors of the Company notice of the liquidation and the requirement to submit claims to the liquidators by a last proving date, which must be a minimum period of 21 days from the date of the notice; and (b) the liquidators to adjudicate and pay (if accepted) and/or reserve sufficient funds to pay any claims received. The Company also anticipates paying at least one further dividend in the period between Completion and the Company entering into liquidation. Although the Company is targeting a voluntary liquidation in December 2024, the timing and quantum of the distribution of substantially all the Company's net assets cannot be guaranteed and may be adversely impacted by the level of the Company's liabilities and any claims made against the Company by the Purchaser pursuant to the Sale Agreement or any other creditors. In the event that Shareholders do not vote in favour of the Company entering into voluntary liquidation, the Board would reassess the options available to the Company to realise Shareholder value at that time, and there can be no certainty that such options would result in the Company realising Shareholder value in the near term.

In addition, in the event that the value of the Portfolio increases following Completion, there is no guarantee that the anticipated return of value to Shareholders will provide a better return to Shareholders than if the Portfolio had been retained by the Company.

·      The market price of the Ordinary Shares may go down as well as up and may not reflect the value of the underlying assets

Shareholders should be aware that the value of an investment in the Company may go down as well as up and can be highly volatile and may not reflect the NAV per Ordinary Share. The price at which the Ordinary Shares may be quoted and the price which Shareholders may realise for their Ordinary Shares will be influenced by a large number of factors, some specific to the Company and its operations and some which may affect its industry, other comparable companies or publicly traded companies as a whole. The price of the Company's Ordinary Shares is ultimately determined by the interaction of supply and demand for Ordinary Shares in the market as well as the NAV per Ordinary Share and other measures of performance, such as underlying earnings. The price per Ordinary Share can therefore fluctuate and may represent a discount to the NAV per Ordinary Share or the expected multiple of earnings. This discount itself is variable as conditions for supply and demand change. This can mean that the price per Ordinary Share may go down as well as up and the price per Ordinary Share can fall when the NAV per Ordinary Share and/or other Company specific performance measures rise, or vice versa. There is no guarantee that the market price of the Ordinary Shares will fully reflect their underlying NAV or other measures of performance. Investors may, therefore, realise less than, or lose all of, their investment.

·    Certain investors wanting exposure to the Portfolio may sell their Ordinary Shares as a result of the Disposal. However, similarly, certain investors wanting to capitalise on the Estimated Net Assets may seek to acquire Ordinary Shares and this may impact liquidity in the Ordinary Shares and the market price of the Ordinary Shares. The market sentiment in relation to the Disposal will be one such factor and this, together with other factors including the actual or anticipated fluctuations in the financial performance of the Company's competitors, market fluctuations, and legislative or regulatory changes in the industry or those affecting investment trusts generally, could lead to the market price of the Ordinary Shares going up or down and not reflecting the NAV per Ordinary Share. Changes in the market price of the Ordinary Shares will not alter the consideration payable by the Purchaser.

Appendix 2 - Related Party Transactions

In consideration of the additional services provided by the Directors in relation to the Proposals, additional fees of c.£65,000 in aggregate will be paid to the Directors, equivalent to six months' total fees each.

Appendix 3 - Legal and Arbitration Proceedings

The Company

There are no governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which the Company is aware) which may have, or have had, during the 12 months prior to the date of this announcement, a significant effect on the Company's financial position or profitability.

The Target Group

There are no governmental, legal or arbitration proceedings (including any such proceedings which are pending or threatened of which the Company is aware) which may have, or have had, during the 12 months prior to the date of this announcement, a significant effect on the financial position or profitability of the Target Group.

Appendix 4 - Significant Change Statement

The Company

There has been no significant change in the financial or trading position or the financial performance of the Company since 31 March 2024, being the date to which the last published financial information relating to the Company was prepared.

Appendix 5 - Material Contracts

The Company

Save as disclosed in Appendix 5, no contracts have been entered into (other than contracts entered into in the ordinary course of business) by the Company, either: (a) within the two years immediately preceding the date of this announcement which are or may be material to the Company; or (b) at any time, which contain any provision under which the Company has any obligation or entitlement which is or may be material to the Company as at the date of this announcement.

Sale Agreement

Parties and structure

The Sale Agreement was entered into on 2 October 2024 between the Company and the Purchaser. Pursuant to the terms of the Sale Agreement, the Purchaser has agreed, subject to the satisfaction or waiver of the Conditions, to acquire the entire issued share capital the Target.

Conditions to Completion

Completion of the Disposal is conditional upon the satisfaction (or waiver, where applicable) of the following Conditions:

·           the Shareholder Approval Condition; and

·           the Noteholders Consent Condition

Completion shall take place on the date falling twelve Business Days following the date on which the last Condition is satisfied or waived (as applicable) or such other date as agreed by the parties to the Sale Agreement, which is expected to be in early to mid-November 2024 (the "Anticipated Completion Date").

If the Conditions are not satisfied or waived (to the extent they are capable of being waived) before close of business on the Longstop Date, the Sale Agreement may be terminated by either the Company or the Purchaser in accordance with its terms.

Purchase Price

The aggregate price for the entire issued share capital of the Target payable on Completion (being the Purchase Price) shall be an amount equal to:

·      the Headline Price; less

·      the Agreed Deduction Amount; plus

·      the Investment Adviser Fee Amount; plus

·      the D&O Insurance Amount; plus

·      an amount equal to 5 per cent. per annum (accruing on a daily basis and calculated pro-rata on the basis of a 365-day year) on the aggregate of the Headline Price, minus the Agreed Deduction Amount, plus the Shareholder Loan Amount (being the equity value of the Portfolio), plus the Investment Adviser Fee Amount calculated from (and including) 1 October 2024 up to (and including) the Completion Date.

The Purchase Price has been agreed on the basis of a "locked box" closing mechanism using a set of unaudited management accounts of the Target Group drawn up as at the Locked Box Date. Accordingly, the Sale Agreement contains certain customary provisions which apply from the period from the Locked Box Date to Completion to compensate the Purchaser against unapproved value being transferred from the Target Group to the Company in that period, subject to certain customary time limitations.

As the Purchaser is a new vehicle, the Consortium has made available credit support to fund the Purchase Price and repayment of the amounts outstanding under the Revolving Credit Facility and Shareholder Loan Agreements at Completion in the form of an equity commitment letter from entities with funds available/appropriate covenant strength.

Pre-Completion Undertakings

The Company has given customary undertakings in relation to the period between the signing of the Sale Agreement and Completion, including to procure the Target Group operates in the ordinary and usual course of business, subject to certain agreed upon and customary exceptions or with the prior written consent of the Purchaser.

Deal Protection Provisions and Break Fee

The Sale Agreement contains certain deal protection provisions (together, the "Deal Protection Provisions") which subject to the limited exceptions set out below:

·        prevent the Company from: (i) soliciting interest from or engaging or negotiating with any third party in respect of any Alternative Proposal (beyond rejecting the approach or seeking clarification of its terms); (ii) sharing confidential information with a third party in connection with any Alternative Proposal; (iii) postponing, adjourning or cancelling the General Meeting or amending the Resolution; or (iv) changing or withdrawing the Recommendation; and

·       in the event the Company or any third party makes an announcement via a Regulatory Investment Service in relation to the Disposal or any Alternative Proposal, require the Company to promptly restate the Recommendation.

If a third party notifies the Company or announces publicly that it is considering making a Cash Offer prior to satisfaction of the Shareholder Approval Condition and the Board considers (acting reasonably) that the approach may lead to a Superior Cash Offer, the Company may engage with the third party provided that: (i) it must decide whether to engage with the third party within four Business Days of the date of first approach; and (ii) if it decides to engage with the third party, it must notify the Purchaser that an approach has been made. In these circumstances:

·       the restrictions on engaging, negotiating and sharing confidential information with that third party in connection with the possible Cash Offer will fall away, and the Company will be permitted to adjourn or postpone the General Meeting on one occasion only by up to seven calendar days from the date of first approach by the third party; and

·        the Purchaser will have a right to terminate the Sale Agreement at any time up to the day prior to the General Meeting.

If a third party makes a Cash Offer prior to satisfaction of the Shareholder Approval Condition which in the Board's reasonable opinion is a Superior Cash Offer, then the Board will be entitled to withdraw the Recommendation and the Deal Protection Provisions will cease to apply. In such circumstances, unless the Company promptly restates the Recommendation and rejects the Cash Offer, a break fee equal to one per cent. of the Company's market capitalisation as at close of business on the last Business Day prior to the date of announcement of the Disposal (being approximately £0.96 million) will be payable by the Company to the Purchaser:

·      on the Cash Offer being declared wholly unconditional, or, if implemented by way of a scheme of arrangement, becoming effective; or

·         in the event the Cash Offer lapses or is withdrawn, on the later of the Longstop Date and five Business Days after such lapse or withdrawal.

The Purchaser will also be entitled (at its option) to payment of the Break Fee if the Recommendation is changed or withdrawn in any other circumstances as an alternative to pursuing remedies for breach of the Deal Protection Provisions.

The Company is also obliged to reject any Alternative Approach following satisfaction of the Shareholder Approval Condition.    

Company Warranties, Undertakings, Covenants and Indemnities and Limitations on Liability

The Company has given warranties to the Purchaser which are customary for a transaction of this nature. These include, among other things, warranties in respect of its capacity to enter into and perform the Sale Agreement, title to the shares in the Target Group, the Locked Box Accounts and other accounting and financial matters, transactions since the Locked Box Date, regulatory matters, Target Group assets, insurance, material contracts, litigation, insolvency, intellectual property, data protection, real estate matters, environmental matters, anti-bribery and corruption, sanctions, competition and taxation. 

The Company has also given a customary tax covenant in favour of the Purchaser, which covers any taxation in respect of the period prior to Completion, subject to usual exclusions for a transaction of this nature.

The Sale Agreement contains certain customary financial limitations, time limitations and other limitations and exclusions on the ability of the Purchaser to claim against the Company for breach of the Sale Agreement, or under the tax covenant. The total aggregate liability of the Company for breach of the warranties or under the tax covenant will not exceed £1. The total aggregate liability of the Company for all other claims under the Sale Agreement will not exceed:

·         in respect of claims notified to the Company on or before the date falling ten weeks after the Completion Date, the Purchase Price, plus the Shareholder Loan Amount; and

·         in respect of claims notified to the Company after the date falling ten weeks after the Completion Date, £1 million.

The Purchaser has procured warranty and indemnity insurance in respect of the warranties and the tax covenant, such that the Purchaser's sole recourse for a breach of the warranties or under the tax covenant (save in respect of fraud or fraudulent misrepresentation) shall be under the warranty and indemnity insurance policy.

The limitations on liability (and the obligation on the Purchaser to seek recovery under the warranty and indemnity insurance policy) shall not apply in the case of fraud or fraudulent misrepresentation by the Company.

Purchaser Warranties and Indemnities

The Purchaser has given warranties to the Company in respect of, among other things, its power and authority to enter into the Sale Agreement and the other documents being entered into in connection with the Sale Agreement.

The Company has entered into the following parent company guarantees and credit support arrangements (the "Parent Company Guarantees") in respect of the Target Group's obligations under the following agreements:

·        guarantee dated 6 September 2022 between the Company, Amazon UK Services Limited and Sonne Solar Limited, relating to a solar power purchase agreement in connection with LCY2;

·        guarantee dated 6 September 2022 between the Company, Amazon UK Services Limited and Sonne Solar Limited, relating to a solar power purchase agreement in connection with LTN4;

·        guarantee dated 6 September 2022 between the Company, Amazon UK Services Limited and Sonne Solar Limited, relating to a solar power purchase agreement in connection with EDI4;

·        guarantee dated 6 September 2022 between the Company, Amazon UK Services Limited and Sonne Solar Limited, relating to a solar power purchase agreement in connection with MAN2;

·        guarantee dated 6 September 2022 between the Company, Amazon UK Services Limited and Sonne Solar Limited, relating to a solar power purchase agreement in connection with BHX2;

·        guarantee dated 6 September 2022 between the Company, Amazon UK Services Limited and Sonne Solar Limited, relating to a solar power purchase agreement in connection with BHX3;

·        guarantee dated 6 September 2022 between the Company, Amazon UK Services Limited and Sonne Solar Limited, relating to a solar power purchase agreement in connection with BHX4;

·       guarantee dated 6 September 2022 between the Company, Tesco Stores Limited and Sonne Solar Limited, relating to a framework power purchase agreement dated 20 August 2018 between Tesco Stores Limited and Sonne Solar Limited; 

·        guarantee dated 6 September 2022 between the Company, Tesco Stores Limited and Sonne Solar Limited, relating to the site power purchase agreements and related leases between Tesco Stores Limited and Sonne Solar Limited; 

·        guarantee dated 18 July 2022 between the Company and Nissan Motor Manufacturing (UK) Limited, relating to a (i) power purchase agreement dated 12 October 2021 between Nissan Motor Manufacturing Limited and Hylton Plantation Solar Farm Limited, and (ii) a lease dated 12 October 2021 between the Company and Nissan Motor Manufacturing (UK) Limited; and

·        as a party to the lease of the airspace above the roof of a Tesco store at Thetford, dated 15 February 2023 between the Company (as guarantor), Tesco Stores Limited (as landlord) and Sonne Solar Limited (as tenant), together with a related licence to underlet and licence to alter.

The Company and the Purchaser have agreed to use reasonable endeavours to procure the replacement of such Parent Company Guarantees before (but with effect from) Completion and following Completion. The Purchaser has undertaken to indemnify the Company in respect of all amounts payable by the Company under the Parent Company Guarantees (and all costs and expenses that the Company incurs in connection with the Parent Company Guarantees) after Completion.

Termination

Either the Company or the Purchaser may terminate the Sale Agreement in the event that:

·         the Conditions are not satisfied or waived (to the extent they are capable of being waived) on or before the Longstop Date; or

·         Completion is deferred more than once because a party fails to satisfy its Completion obligations.

The Purchaser may terminate the Sale Agreement prior to Completion without liability on its part upon any of the following events:

·         a breach by the Company of any of the fundamental warranties, relating to (i) title to the Target's shares, (ii) power and authority of the Company, (iii) the ownership of the Target Group and (iv) the solvency of the Company and the Target Group, if they were repeated on Completion; or

·         a material breach of certain agreed pre-completion undertakings; or

·       a catastrophic event which has the effect of extinguishing 10 per cent. of the generating capacity of the projects owned by the Target Group; or

·      where the security created by the RCF Security Documents has been enforced or the debt has been accelerated, or mandatory prepayment demanded under the Revolving Credit Facility Agreement.

In addition, the Purchaser may terminate the Sale Agreement at any time up to the day prior to the General Meeting where a third party has notified the Company or announced publicly that it is considering making a Cash Offer and the Board has decided to engage with such third party where it considers (acting reasonably) that the approach may lead to a Superior Cash Offer.

Governing Law and Jurisdiction

The Sale Agreement is governed by English law. The courts of England and Wales have exclusive jurisdiction in relation to all disputes arising out of, or in connection with, the Sale Agreement.

AIFM Agreement

The Company and the AIFM entered into the AIFM Agreement on 1 November 2021 pursuant to which the AIFM is appointed to act as the Company's alternative investment fund manager, as defined in the UK AIFMD Laws and the EU AIFM Directive.

Pursuant to the AIFM Agreement the AIFM is entitled to receive a fee which is calculated on such basis and in such amount as agreed in writing from time to time between the AIFM and the Company.

The AIFM Agreement is terminable by either the AIFM or the Company giving to the other not less than 6 months' written notice. The AIFM Agreement may be terminated earlier by either party with immediate effect in certain circumstances, including if the other party shall go into liquidation or an order shall be made or a resolution shall be passed to put the other party into liquidation, or if the other party has committed a material breach of any obligation under the AIFM Agreement, and in the case of a breach which is capable of remedy fails to remedy it within 30 days.

The Company has given certain market standard indemnities in favour of the AIFM in respect of the AIFM's potential losses in carrying on its responsibilities under the AIFM Agreement. The maximum aggregate liability of the AIFM under the AIFM Agreement is the lesser of £5 million or an amount equal to ten times the annual fee payable to the AIFM.

The AIFM Agreement is governed by the laws of Guernsey.

In anticipation of Completion and the proposed voluntary liquidation of the Company, the Company and the AIFM have agreed that the AIFM Agreement will terminate on the Company entering into voluntary liquidation.

Investment Advisory Agreement

The Company, the Target, the AIFM and the Investment Adviser entered into an investment advisory agreement on 1 November 2021 (as amended and restated from time to time) pursuant to which the Investment Adviser is appointed to provide certain services to the Company, the Target and the AIFM in relation to the Company and its portfolio (the Company and the Investment Adviser being the "Primary Parties"), including certain administrative services (including, but not limited to, the calculation of the Company's NAV and the NAV per Ordinary Share and the preparation of the Company's financial statements) (the "Investment Advisory Agreement").

The Investment Advisory Agreement shall continue in force for an initial period of 5 years from 23 November 2021, the date of the Company's initial public offering (the "Initial Term"). Following the Initial Term, the Investment Advisory Agreement will continue in full force and effect unless and until terminated by either of the Primary Parties on not less than 12 months' notice to the other Primary Party and the AIFM. The Investment Advisory Agreement may be immediately terminated by either of the Primary Parties in certain circumstances, such as insolvency of the other Primary Party or material breach by the other Primary Party which is not remedied.

The Company has agreed to indemnify the Investment Adviser for losses that the Investment Adviser may incur in the performance of its duties pursuant to the Investment Advisory Agreement or otherwise in connection with the Company's activities that are not attributable to, among other things, a material breach of the Investment Advisory Agreement by, or the negligence, fraud, or wilful misconduct of, the Investment Adviser (in each case as finally determined in a decision on the merits in any action, suit or proceeding, or on a formal admission). The indemnity is customary for agreements of this nature. The Investment Adviser's maximum liability under the Investment Advisory Agreement is limited to £10 million.

Pursuant to the Investment Advisory Agreement, the Investment Adviser is entitled (i) to an annual fee payable quarterly in arrears in respect of accounting and administration services of £50,000 plus a percentage of the Adjusted NAV depending on the size of the Adjusted NAV (ranging from 0.015 to 0.02 per cent.) and (ii) monthly and semi-annual managements fees, which equate to an annual management fee of 0.95 per cent. of the Adjusted NAV up to and including £500 million and an annual management fee of 0.75 per cent. of the Adjusted NAV above £500 million (with the semi-annual management fees payable each year representing 25 per cent. of the total annual management fees payable to the Investment Adviser).

In the event that a Third Party Offer becomes unconditional and, as a result, the right to cast a majority of the votes which may ordinarily be cast on a poll at a general meeting of the Company has or will become vested in a third party offeror (and/or any persons acting in concert with it) and, following such Third Party Offer becoming unconditional, notice to terminate the Investment Advisory Agreement is given by the Company, in addition to the fees described above, the Investment Adviser shall be entitled to receive a fee (the "Change of Control Fee") equal to the lower of:

·    an amount equal to two years of monthly management fees and semi-annual management fees (in each case by reference to the Adjusted NAV had it been calculated by reference to the NAV as at the date of the last monthly management fee and semi-annual management fee paid by the Company prior to the termination of the Investment Advisory Agreement); and

·    the amount (if any) by which the total Third Party Offer price for the Ordinary Shares which are the subject of the Third Party Offer exceeds an amount equal to 108 per cent. of the NAV for such Ordinary Shares on the date the Third Party Offer is announced.

Payment of the Change of Control Fee shall be conditional on the annualised NAV Total Return per Ordinary Share for the 3 years prior to the announcement of the Third Party Offer or, if the Third Party Offer is announced prior to the third anniversary of the Company's initial public offer, the annualised NAV Total Return per Share for such shorter period, exceeding 8 per cent. An equivalent provision for payment of a Change of Control Fee exists where the Company disposes of all or substantially all of its assets (other than in an orderly winding up or on the advice of the Investment Adviser) and returns the proceeds of such disposal to Shareholders to the extent that the Company's NAV is consequently reduced to less than £200 million. The Change of Control Fee will not be payable as a result of the Disposal.

The Investment Advisory Agreement is governed by the laws of England.

The Target will cease to be a party to the Investment Advisory Agreement on Completion. In anticipation of Completion and the proposed voluntary liquidation of the Company, the parties to the Investment Advisory Agreement have agreed that the Investment Advisory Agreement will terminate on the Company entering into voluntary liquidation.

Company Secretarial Services Agreement

The Company is party to a company secretarial services agreement with the Company Secretary dated 2 April 2024 (the "Company Secretarial Services Agreement") pursuant to which the Company Secretary is appointed to perform certain secretarial services to the Company and its subsidiaries.

The Company Secretarial Services Agreement shall continue in force for an initial term of 18 months from 2 April 2024 (the "Initial Term"). The Company Secretarial Services Agreement may be terminated so as to take effect at the end of the Initial Term by the Company providing not less than 6 months' prior written notice to the Company Secretary. Following the Initial Term, the appointment shall continue in force until terminated by the Company or the Company Secretary by giving the other party not less than 3 months' notice in writing (or such shorter notice as the parties may agree). The Company Secretarial Services Agreement may be terminated immediately by either party in the case of certain specified circumstances, including material and continuing breach or insolvency of the other party.

The Company Secretarial Services Agreement contains certain customary indemnities by the Company in favour of the Company Secretary. The liability of the Company Secretary is limited (i) in the first twelve months of the agreement to an amount equal to four times the minimum fee payable in respect of that period and thereafter (ii) to an amount equal to four times the aggregate fees paid under the agreement in respect of the preceding year.

Under the terms of the Company Secretarial Services Agreement, the Company Secretary is entitled to receive a company secretarial fee of £85,000 per annum for the provision of certain company secretarial services to the Company. The Company Secretary is entitled to additional fees for providing company secretarial services to any subsidiaries of the Company and for providing additional services to the Company which are outside the scope of the company secretarial services covered by the company secretarial fees referred to above.

The Company Secretarial Services Agreement is governed by the laws of England.

In anticipation of Completion and the proposed voluntary liquidation of the Company, the Company and the Company Secretary have agreed that the Company Secretarial Services Agreement will terminate on the Company entering into voluntary liquidation.

Registrar Agreement

The Registrar Agreement dated 1 November 2021 between the Company and the Registrar pursuant to which the Company appointed the Registrar as registrar of the Company.

The Registrar Agreement is for an initial period of 3 years from 23 November 2021, the date of the Company's initial public offering, with automatic renewal for successive 12 month periods unless and until terminated by either party on not less than 6 months' notice. The agreement is also subject to immediate termination on the occurrence of certain events, including material and continuing breach or insolvency.

The Registrar contains certain customary undertakings and indemnities by the Company in favour of the Registrar. The Registrar's liability is limited to the lesser of £500,000 or an amount equal to five times the annual fee payable under the agreement.

Under the terms of the Registrar Agreement, the Registrar is entitled to customary fees.

The Registrar Agreement is governed by the laws of England.

Placing agreement in relation to the initial public offering of the Company

The placing agreement dated 30 October 2021 between the Company, the Investment Adviser, the Directors, Alvarium Securities Limited and Dickson Minto W.S., pursuant to which Alvarium Securities Limited agreed to use its reasonable endeavours to procure subscribers for Ordinary Shares at the Company's launch and/or C Shares pursuant to the placing programme launched at the time of the Company's initial public offering.

In consideration for its services, Alvarium Securities Limited was paid a commission by the Company in consideration for its services under the agreement.

The Company, the Investment Adviser and the Directors gave warranties and indemnities to Alvarium Securities Limited, which were customary for an agreement of this nature.

The placing agreement is governed by English law.

Introductory services engagement letter

The introductory services engagement letter dated 1 November 2021 between the Company and the Investment Adviser pursuant to which the Investment Adviser agreed to use reasonable endeavours, as a non-exclusive independent marketer, to introduce to the Company prospective investors which the Company and the Investment Adviser agreed in writing that it may approach.

The Investment Adviser is paid a fixed fee for arranging meetings or a commission of one per cent. of the aggregate subscription price for Ordinary Shares for which prospective investors introduced by the Investment Adviser subscribe (or such other commission as may be agreed between the Company and the Investment Adviser in writing).

Payments to the Investment Adviser under the introductory services engagement letter shall not, when aggregated with any other transaction or arrangement entered into by the Investment Adviser or any of its associates (as defined in the Listing Rules) with the Company or any of its subsidiaries in the 12 month period before the date of such payment, exceed 4.99 per cent. on any of the class tests set out in the Listing Rules.

The introductory services engagement letter contains customary indemnities in favour of the Company.

The introductory services engagement letter is governed by English law.

Stifel financial advisory and sponsor services agreement

On 22 April 2024, the Company entered into a financial advisory and sponsor services agreement on customary terms with Stifel pursuant to which Stifel agreed to provide (i) financial advisory services in relation to the Disposal, including advice on the merits and the terms of the Disposal and in respect of any subsequent winding-up and de-listing of the Company and (ii) sponsor services under the Listing Rules.

The agreement contains, amongst other things, certain customary obligations on the Company, including that the Company agrees to comply with the Listing Rules and to pay a fee to Stifel on the terms agreed between Stifel and the Company.

The agreement contains certain customary warranties and indemnities from the Company, together with provisions that enable Stifel to terminate the agreement in certain circumstances, which is usual for an agreement of this kind.

The agreement is governed by the laws of England.

The Target Group

Save as disclosed in this Appendix 5, no contracts have been entered into (other than contracts entered into in the ordinary course of business) by the Target Group, either: (a) within the two years immediately preceding the date of this announcement which are or may be material to the Target Group; or (b) at any time, which contain any provision under which the Target Group has any obligation or entitlement which is or may be material to the Target Group as at the date of this announcement.

Revolving Credit Facility Agreement

The Target is party to a facility agreement originally dated 1 September 2023 with National Westminster Bank plc (in various capacities, including as lender) (as amended from time to time) (the "Revolving Credit Facility Agreement") pursuant to which National Westminster Bank plc has made available a secured, revolving credit facility of £30 million. The Revolving Credit Facility Agreement includes a £20 million accordion facility, which has been exercised in full and £14 million of which has been utilised by the Target. Interest is payable at a rate of 1.30 per cent. per annum over SONIA. Any outstanding amounts are to be repaid in full on the date falling 3 years after 'Financial Close' (which is the satisfaction of the conditions precedent to initial utilisation), with an option for a 1 year extension. The Revolving Credit Facility contains standard events of default and covenants for a facility of this nature.

Security arrangements, in respect of the Revolving Credit Facility Agreement, have been entered into by members of the Atrato Group, comprising (i) a shareholder security agreement entered into by the Company, charging the shares it holds in the Target, (ii) a subordination deed entered into by the Company, subordinating any intercompany loans, (iii) debentures entered into by the Target and (iv) debentures entered into by various members of the Target Group and (v) a bank account agreement entered into by the Target and National Westminster Bank plc (in various capacities).

£44 million is currently drawn under the Revolving Credit Facility.

The Revolving Credit Facility Agreement is governed by the laws of England.

The Revolving Credit Facility will be prepaid and cancelled on Completion.

ASG Note Purchase Agreement

A Shade Greener (F2) Ltd ("ASG") (as the company) and HGPE ASG Finance Limited, HGPE ASG Limited and HGPE ASG Assetco Limited (each as obligors) are party to a note purchase agreement dated 14 August 2019 (as amended pursuant to an amendment agreement dated 24 October 2023) (the "ASG Note Purchase Agreement"), pursuant to which ASG issued £30 million of secured fixed rate notes to a number of subscribers. The notes are redeemed in part on a bi-annual basis, with the final redemption date being 30 June 2036. The interest payable on the notes is fixed at 2.07 per cent. per annum.

The agreement contains standard events of default and the obligors under the agreement have provided standard representations and undertakings for an agreement of this nature.

The ASG Note Purchase Agreement is secured by way of (i) a debenture entered into by ASG and various other members of the Target Group and (ii) a shareholder security agreement entered into by Rooftop Solar 2 Limited.

There remains approximately £24.2 million payable in respect of the notes under the ASG Note Purchase Agreement as at the Latest Practicable Date.

The ASG Note Purchase Agreement is governed by the laws of England.

HGPE Steel Note Purchase Agreement

HGPE Steel Limited ("HGPE Steel") (as the company) and HGPE Steel Nominee Limited, Empower Community Solar LLP, A Share Greener (F8) LLP and HGPE ASG2 Assetco LLP (each as obligors) are party to a note purchase agreement dated 14 August 2019 (as amended pursuant to an amendment agreement dated 24 October 2023) (the "HGPE Steel Note Purchase Agreement"), pursuant to which HGPE Steel issued £27.5 million of secured fixed rate notes to a number of subscribers. The notes are redeemable in part on a bi-annual basis, with the final redemption date being 30 June 2033. The interest payable on the notes is fixed at 1.99 per cent. per annum.

The agreement contains standard events of default and the obligors under the agreement have provided standard representations and undertakings for an agreement of this nature.

The HGPE Steel Note Purchase Agreement is secured by way of (i) a debenture entered into by HGPE Steel and various other members of the Target Group and (ii) a shareholder security agreement entered into by Rooftop Solar 2 Limited.

There remains approximately £20.0 million payable in respect of the notes under the HGPE Steel Note Purchase Agreement as at the Latest Practicable Date.

The HGPE Steel Note Purchase Agreement is governed by the laws of England.

Management Services Agreement

The Target is party to a management services agreement dated 2 August 2022 with Vector Renewables UK Ltd ("Vector") (the "Management Services Agreement"), pursuant to which Vector provides a range of services to a number of subsidiary project companies of the Target and the corresponding projects including, but not limited to asset management services, technical analysis and operations and maintenance management services.

The Management Services Agreement shall continue for an initial term of 3 years (the "Initial Term"), with the agreement automatically renewing for further 3-year periods unless either party serves the other with a termination notice at least 6 months in advance of the end of the relevant term. The agreement is also subject to immediate termination on the occurrence of certain events, including material and continuing breach or insolvency.

Vector is entitled to receive payment of a fee of £25,000 per annum during the Initial Term, payable quarterly, with such fee after the Initial Term being based upon the MW capacity of specific projects (subject to price floors and caps). Vector is also entitled to additional fees outside those listed above in relation to services which are outside the scope of the services covered by the fees referred to above.

The Management Services Agreement includes customary indemnities given by both the Target and Vector. Liability is limited to two times the amount of the fees paid by the Target under the Management Services Agreement.

The Management Services Agreement is governed by the laws of England and Wales.

Appendix 6 - Revised Investment Objective and Policy

Investment Objective

The investment objective of the Company is to realise all of its existing assets and to return cash to Shareholders.

Investment Policy

The Company may not make any new investments, save that:

·      investments may be made to honour commitments under existing contractual arrangements; and

·      further investments may be made into the Company's existing portfolio in order to protect or enhance an asset's realisable value.

The net proceeds from realisations will be used to repay borrowings and make returns of capital to Shareholders (net of provisions for the Company's costs and expenses) in such manner as the Board considers appropriate.

Any cash received by the Company as part of the realisation process will be held by the Company as cash on deposit and/or in liquid cash equivalent securities (including direct investments in UK treasuries and/or gilts, funds holding such investments, money market or cash funds and/or short-dated corporate bonds or funds that invest in such bonds) pending its return to Shareholders.

Gearing policy

The Company may continue to make use of medium and long-term external debt (including at the SPV level) of up to 40 per cent. of the Company's Gross Asset Value immediately following drawdown of the financing and assessed on a look-through basis.

In addition, the Company and/or its subsidiaries may continue to make use of short-term debt (being typically for a term of no more than 12 months), such as revolving credit facilities. Such short-term debt shall not exceed 20 per cent. of the Company's Gross Asset Value immediately following drawdown of the financing and assessed on a look-through basis.

Hedging policy

The Company may enter into hedging arrangements in respect of interest rates and/or power prices. The Company will not undertake any speculative hedging transactions and hedging transactions shall be limited to those which are necessary or desirable for the purposes of efficiently managing the Company's investments and protecting or enhancing returns therefrom. The Company may make use of currency hedging where investments are made in currencies other than pounds Sterling with the objective of reducing the Company's exposure to fluctuations in exchange rates.

Changes to and compliance with the investment policy

The Company will at all times invest and manage its assets in accordance with its published investment policy. Material changes to the Company's investment policy may only be made in accordance with the prior approval of the Shareholders by way of ordinary resolution and the prior approval of the FCA in accordance with the UK Listing Rules. Non-material changes to the investment policy must be approved by the Board, taking into account advice from the AIFM and the Investment Adviser where appropriate. In the event of a breach of the investment policy, including the investment restrictions set out above, the AIFM shall inform the Board upon becoming aware of such breach and if the Board considers the breach to be material, notification will be made to a Regulatory Information Service.

Appendix 7 - Definitions

The following definitions apply throughout this announcement unless the context requires otherwise.