US Solar Fund, a UK-listed investment trust that invests in solar power in the US, has barely survived a vote to kill the trust.
In the trust’s annual general meeting yesterday, 35.4 per cent of investors voted for it to wrap up, while 35 per cent voted against the re-election of the trust’s chair, Gillian Nott.
Investment firm Sarasin and Partners owns around nine per cent of US Solar Fund’s share capital and had publicly stated they would vote against the trust continuing and the chair’s re-election.
Sarasin said that they are, “dissatisfied by the quality of leadership and investor communications that board chair Gill Nott has provided over the past four years.”
“In our view, this has manifested itself in the failure to implement the company’s growth strategy, failure to complete the strategic review in good time and to the benefit of shareholders, the substantial discount of the share price to NAV, poor cash flow management and unmitigated dividend volatility,” the firm added.
The performance of US Solar Fund has been suffering in recent months, pushing it to chase changes that will improve performance like replacing its investment manager and widening its remit.
Despite jumping five per cent this morning, the trust’s stock price has halved over the last five years, and still sits at a 36 per cent discount to its net asset value.
The trust was also forced to cut its dividend target in half last month as it looked to refinance its debt through US private markets.
Regarding the continuation of the fund, Sarasin said: “We believe unwinding the fund remains the best option for shareholders. In our view, the poorly implemented growth strategy has resulted in the company having subscale assets in an unfavourable macro environment, despite the recent efforts of the new manager to restore shareholder value”
“The board will continue its engagement with shareholders and notes that discussions with shareholders since the announcement of the tender offer have been constructive,” said the US Solar Fund,
“In the view of the board and investment manager, the plans set out last month regarding the tender offer, interim dividend policy and refinancing plans, reflect the best approach to deliver maximum value for all shareholders. Wide-ranging support from shareholders for the company’s strategy has been expressed.”
Separately, US Solar Fund also saw its planned $19m (£15m) tender offer approved by 95.4 per cent of shareholders.