Gore Street Energy Storage Fund (LSE:GSF) has stepped up its opposition to proposals backed by major shareholder Saba Capital Management, calling on investors to reject resolutions that could ultimately lead to the investment company being wound up, liquidated or reorganised.
In a supplementary notice issued ahead of its September Annual General Meeting, the board recommended that shareholders support resolutions one to 15 while voting against two additional resolutions submitted by Saba, which owns approximately 18% of Gore Street’s ordinary shares.
Board warns of forced sales at unfavourable valuations
Saba is seeking to discontinue Gore Street as an investment vehicle and require the board to bring forward proposals that could result in a wind-up, liquidation or restructuring of the company.
Gore Street’s directors argue that pursuing this course at the current point in the market cycle risks destroying shareholder value by effectively forcing the fund to sell assets when market conditions remain challenging.
Instead, the board pointed to the revised strategy unveiled in March, which includes selective portfolio disposals and quarterly distributions to shareholders. Planned battery augmentation projects are also expected to increase revenue generation and enhance asset values.
The company has established performance indicators as part of the strategy, with shareholders due to receive an opportunity to vote on Gore Street’s continuation if the specified targets are not achieved.
Gore Street says discontinuation could disrupt asset sales
The board also warned that approving Saba’s proposals could interfere with transactions already under way, including asset disposals announced this week.
Directors believe completing these transactions alongside planned portfolio improvements offers shareholders a better opportunity to realise the underlying value of Gore Street’s assets than an immediate discontinuation and forced-sale process.
With the board arguing that Saba’s proposals could benefit from low shareholder participation, Gore Street is encouraging investors to resubmit their proxy instructions so that votes on all resolutions, including the two contested motions, reflect broader shareholder participation.
Financial weakness weighs on outlook
Gore Street’s investment outlook continues to face pressure from volatile financial performance, including a substantial recent loss and a reduction in shareholders’ equity. Technical indicators are also weak, with the shares trading below key moving averages.
These pressures are partly balanced by the fund’s absence of debt, positive free cash flow in its latest financial year and a comparatively high dividend yield, which may increase its appeal to income-focused investors.
More about Gore Street Energy Storage Fund
Gore Street Energy Storage Fund is a London-listed investment company specialising in utility-scale energy storage infrastructure.
Launched in 2018, the company was the first listed energy storage fund on the London market and has developed an internationally diversified portfolio spanning five electricity grid networks.
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