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(Sharecast News) - SDCL Efficiency Income Trust announced on Thursday that it has sold its holding in ON Energy for $7.6m, representing an 18.75% premium to the investment's most recent carrying value and a money-on-invested-capital multiple of 1.63x, as it looked to simplify its portfolio and reduce debt.
The FTSE 250 firm said the disposal followed a period of shareholder engagement after its full-year results in June, during which both the investment manager and board chair met investors to discuss strategic options.
It said shareholders highlighted the importance of asset disposals, improved cash generation to support dividends, and debt reduction.
"The board remains focused on finding solutions to narrow the discount the company's shares trade at, with disposals being key to simplifying the portfolio and reducing debt levels," said chair Tony Roper.
"The board is taking a more active role in supporting the disposal processes the investment manager is working on and will continue to explore all strategic options to achieve these important objectives."The stake, structured as a convertible loan, was sold back to ON Energy and removed exposure to a business whose geographic focus had shifted away from SEIT's target market.
Proceeds would be used to reduce borrowings under the trust's revolving credit facility.
"The disposal reflects SEIT's continued focus on crystallising value for shareholders, managing portfolio construction, and maintaining financial flexibility in a challenging mergers and acquisitions market," said SDCL chief executive Jonathan Maxwell.
"It is timely to exit as ON Energy moves on to the next stage of its growth and we are pleased to secure an exit at a significant premium."
At 1142 BST, shares in SDCL Efficiency Income Trust were up 0.9% at 55.9p.
Reporting by Josh White for Sharecast.com.
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