SDCL Energy Efficiency Income Trust Plc (LSE:SEIT) reported progress in implementing its shareholder-approved wind-down strategy, including changes to financing arrangements, governance and foreign exchange hedging.
Shareholders approved a revised investment objective and an orderly realisation of the company’s portfolio in July 2026. Under the strategy, SEIT intends to dispose of its assets over time and return capital to shareholders.
The company said proceeds from asset disposals will initially be used primarily to reduce borrowings under its approximately £188 million revolving credit facility before cash is returned to shareholders.
Credit Facility Amended as Asset Sale Process Continues
SEIT has amended its revolving credit facility as part of preparations for the portfolio realisation process.
The company said it is prioritising liquidity and compliance with financial covenants under the capped facility while continuing to engage with potential buyers for portfolio assets.
During the wind-down, investment manager Sustainable Development Capital LLP will continue to oversee the portfolio, including operational, development, optimisation and restructuring activities at individual investments.
SEIT said its portfolio continues to generate cash while the company works to reduce leverage.
Board Changes Proposed
The company has published a circular proposing the appointment of Boaz Weinstein and Richard Pavry as non-executive directors.
According to SEIT, the proposed appointments have the support of its two largest shareholders and form part of changes to board oversight during the realisation process.
The company’s Investment Management Agreement with Sustainable Development Capital LLP is also under review.
SEIT Reduces Foreign Exchange Hedging
SEIT is also materially reducing its foreign exchange hedging programme as its investment strategy shifts from long-term portfolio ownership to asset realisation.
The board determined that the costs and liquidity requirements associated with maintaining longer-term protection of net asset value against currency movements no longer provide sufficient benefits under the wind-down strategy.
The change means the company’s net asset value will have greater exposure to movements in foreign exchange rates as hedging is reduced.
Portfolio to Be Realised Under Revised Investment Strategy
SEIT’s portfolio includes energy efficiency and decentralised energy assets across North America, the UK and Europe.
Its investments include cogeneration assets in Spain, commercial and industrial solar and storage projects in the U.S., a regulated gas distribution network in Sweden, energy recycling infrastructure serving a U.S. steel blast furnace and a U.S. district energy system.
The trust is managed by Sustainable Development Capital LLP. Under the revised investment objective, SEIT is seeking to realise its portfolio and distribute available capital to shareholders while managing the timing and terms of individual asset disposals.
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