US Solar Fund in negotiations with potential new manager after failed sale attempt
In October last year, the trust said it would be undertaking a strategic review, due primarily to 'structural challenges in the US solar sector' as well as its widening discount to NAV.
In a stock exchange notice today (7 August), the board said it had granted a potential new investment manager a period of exclusivity to negotiate a new investment management agreement.
The move follows the announcement on 10 July that USF's existing investment management agreement with New Energy Solar Manager (NESM) would not be extended beyond the expiry of the initial five-year term in April 2024.
During the period of exclusivity, the potential new manager and the board will work to obtain the necessary regulatory and shareholder approvals required for the potential new manager to replace NESM, with further details to be announced in the next two weeks.
US Solar Fund drops plans for sale
Ahead of the trust's interim results to be released in September, the board said the trust's 30 June NAV will be lower than the most recent NAV of 95.8 cents due to macroeconomic factors and the recent unsuccessful strategic review sale process, where no suitable offers were received.
More positively, the board noted that the operational performance of the portfolio has improved year-on-year despite challenging weather conditions, supported by highly predictable revenues earned from its long-term power purchase agreements and fully hedged debt facilities.
Although it is guiding to a lower 30 June NAV, the board said it believes the share price discount to NAV, currently at 33.8%, does not reflect the value of the company.
Although USF's $40m revolving credit facility is currently undrawn and the trust has $45m of cash, the board is not seeking new
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