Digital 9 Infrastructure weighs divestment from crown jewel Verne Global
The trust's board said it had received 'indicative offers from interested parties' working to secure a majority stake in Verne Global.
The trust, which currently sits on a discount of 64% according to the Association of Investment Companies, saw its share price collapse 39.5% last month after it withdrew its 6p dividend target.
The trust's board said it had received «indicative offers from interested parties» working to secure a majority stake in Verne Global.
This sale would enable it to «accelerate its balance sheet deleveraging, deliver the cash resources necessary for the company and group to strengthen their position, and further maximise shareholder value», the board said.
Investec upgrades Digital 9 Infrastructure to tactical 'Buy' rating after sell-off
Numis analysts Andrew Rees and Ash Nandi said management was likely reluctant to sell its entire position in one of «the portfolio's marquee platforms», rather than maintain a minority stake.
Rees and Nandi added the move was not surprising «given the scale of the capital allocation challenges that DGI9 is facing, which require significant action».
Stifel analyst Sachin Saggar described the move as «unsurprising post the dividend fiasco».
He noted that a full sale of the Verne Global group, which was valued at about £517m, would «wipe out» the revolving credit facility, putting the trust in a net cash position.
«We expect, if the asset is sold in full, this will signal a process of each asset being sold individually over time. In effect, an orderly wind down of the company,» Saggar said. «Arqiva will likely represent the most difficult to sell, given it is not a growth asset akin to Verne Global.»
Winterflood Securities analyst Elliott Hardy said «it appears that
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