US Solar Fund has attempted to reassure investors it has the right strategy and portfolio in place to recover from its protected share price slump.
Ahead of its formal results next month, the London listed investment trust laid out why it believes performance will improve.
Shares in US Solar have fallen 27% over the past 12 months to just $0.62 (48p) at the open today, 7 August. The update prompted a 2% bounce this morning to $0.64 (50p).
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The fund is trading at a 34.85% discount relative to its net asset value, according to data from the AIC, indicative of the low confidence the market has in it at present.
USF earlier announced it had mutually agreed to part ways with current investment manager, New Energy Solar Manager, at the end of a five-year term in April 2024.
In today’s update it said it has granted a potential new investment manager a ‘period of exclusivity’ during which the parties will seek to negotiate a new investment management agreement and obtain the necessary approvals. It will reveal the identity once everything is confirmed.
In terms of the strategy for managing the current share price discount to NAV, the board said it continues to believe the discount does not reflect the value of the company and outlined key steps currently being taken to address it.
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These include focusing on efficient balance sheet management and realising value from existing investments where prudent to do so.
The trust also touted its portfolio’s ‘high-quality generation assets,’ noted first half of 2023 has been lacking in good weather conditions compared with 2022, and pointed to highly predictable revenues earned from long-term power purchase agreements (PPAs) it has in place.
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