23rd May 2016 09:34
LONDON (Alliance News) - Ecofin Water & Power Opportunities PLC Monday set out proposals to create a new investment trust, as well as a cash exit for shareholders, ahead of a vote on whether or not the company should continue which is due to be held before the end of June.
Should shareholders vote in favour of the proposals, Ecofin intends to form a new investment trust focused on global utilities and infrastructure equities called Ecofin Global Utilities and Infrastructure Trust PLC which will hold its liquid investments, and to realise all of its remaining unquoted investment and illiquid assets via a new investment company, EF Realisation.
Shareholders will be issued with shares in both Ecofin Global and EF Realisation.
Ecofin Global Utilities will be admitted to trading on the London Stock Exchange's main market, targeting an initial dividend yield of at least 4% on its net assets using gearing.
EF Realisation would also trade on the main market, and realise the portfolio over two years.
In addition to the cash that would be returned to investors through the realisation of these assets, shareholders will also be offered an immediate cash exit for up to 35% of the issued share capital of the company.
The combination of the realisation of the portfolio and the cash exist is expected to result in the return of around GBP154.3 million to shareholders, the company said.
"The reconstruction proposals create a new investment trust, Ecofin Global Utilities and Infrastructure Trust, that will provide exposure to a sector currently under-represented in the investment company universe and one that will seek to provide a strong yield to investors at a time when it is difficult to identify assets that can provide a regular sustainable income at an attractive level," said Chairman Ian Barby in a statement.
"The capital return through the realisation of the company's illiquid assets and the cash exit provides a balance of liquidity for those shareholders seeking an exit while maintaining sufficient scale in the ongoing entity for shareholders going forward," Barby added.
Shares in Ecofin Water & Power Opportunities were up 4.2% at 128.10 pence Monday.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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