Aquila European Renewables Share Discussion Threads

[cc2014] 10/5/2024 08:20

And not before time. The money being wasted on all these reviews is out of order.

[speedsgh] 10/5/2024 07:40

Company Update -

Aquila European Renewables plc ("AERI" or the "Company") announced on 22 December 2023, that it was considering broader options for the future of the Company, including the possible combination with another listed investment company by way of a section 110 scheme of reconstruction under the Insolvency Act 1986 (the "Section 110 Review"). The Board of AERI (the "Board") announced on 26 February 2024, that following the receipt and review of a number of indications of interest in a section 110 combination, a process of mutual due diligence with multiple interested parties had commenced.

Through the Section 110 Review, the Board received indicative non-binding section 110 offers from Octopus Renewables Infrastructure Trust plc and two other investment companies. Each indicative offer proposed the issue of newly issued shares of the listed investment company offeror as consideration and one indicative offer included a cash exit facility of up to 10% of the total consideration. On the basis of a NAV for NAV exchange, each of the three indicative offers represented an implied look through value ranging from a small premium to a discount to the current AERI share price.

Following the FY23 annual results, feedback on the Section 110 Review has been received from shareholders representing a majority of the total voting rights of the Company. Shareholders representing more than 25% of the total voting rights of the Company, sufficient to block a potential shareholder vote on a section 110 combination, indicated that they are not supportive of a section 110 combination of AERI with another listed investment company.

Alongside the shareholder feedback, the Board has taken into account the discount to NAV that the listed investment company renewables sector is currently trading on and believes that at this time, a section 110 combination with another listed investment company is not value enhancing when weighed against the other potential options open to the Company. The Board is also mindful of the additional financial costs that it would incur in running the Section 110 Review to its conclusion. The Board has therefore decided to terminate the Section 110 Review.

In light of market conditions and shareholder feedback, the Board and its advisers continue to progress the review of broader options including:

· a wind-down of the Company with an orderly realisation of its assets over a period of time;

· a potential sale of some or all of the assets of the Company for cash; and

· the potential continuation of the Company in its present form in accordance with its current investment policy delivered by Aquila Capital Investmentgesellschaft, the Company's investment adviser.

The Board expects to provide a further update before the end of Q2 2024. Notwithstanding the outcome of the ongoing review of broader options, the Board notes its commitment to hold a vote on the Company's continuation at a shareholder meeting expected to be held in September 2024.

[alan pt] 26/4/2024 16:20

Somewhat meh results, with Norway tax a nasty addition:


...and now the board "expects to be able to update shareholders regarding progress (on the auction) before the end of June 2024", bit of a change from "April, if not earlier"

Hard to tell whether that's the result of lots of interest or not much interest

[mwj1959] 18/4/2024 17:09

Update on company auction due by annual results on the 25th. Not holding my breath here. ORIT, a potential bidder, has seen a very weak share price too. At 63p AERS now yielding just under 9%.

[mwj1959] 26/2/2024 17:48

lacklustre share price reaction to this news!

[alan pt] 26/2/2024 11:36

www.citywire.com/investment-trust-insider/news/aquila-european-renewables-opens-its-books-to-bidders/a2436909

"Aquila European Renewables (AERS) has launched an auction of the company two months after Octopus Renewables (ORIT) announced its interest in a merger.

The £315m portfolio of solar, wind and hydropower projects managed by Aquila Capital in Germany today said it had received ‘a number of indications of interest’ in a merger since then and had instructed its corporate broker Deutsche Numis to begin ‘a process of mutual due diligence with multiple interested parties’.

The board, chaired by Ian Nolan, said it would only consider a combination that was in the best interests of all shareholders. It said talks were at an early stage and there could be no certainty a transaction would complete. An update would be made by the annual results in April, if not earlier, it said"

[mwj1959] 22/12/2023 16:00

With the September 24 continuation vote as a backstop combined with Octopus' proposals there is every reason to think that the discount will / need to shrink over the coming 12m, albeit hopefully not through the NAV falling to the share price (and there are plenty of reasons why that could happen given sensitivities to power price, production etc.), but rather vice versa. Conservatively, taking the share price from 66p to 75p, still a substantial discount, would see a near 14% rtn, add in a dividend of 5.5p and you get a 22% TR. So a pretty good risk / reward on a one year basis. Given this I'm happy to be adding around current levels.

[gopher] 22/12/2023 13:32

There appears to be logic in the Octopus proposal and since their trust trades on a narrower discount an obvious way out for the Aquila board discount conundrum, perhaps one they don't want to take however.

[alan pt] 21/12/2023 15:12

Well, I sold up gradually during the rest of March, thankfully. Would like to say that I had the foresight to anticipate the falls, but really it was more a liquidity concern. I hate holding things that I can't buy and sell on limit orders

However, I'm now back in, via my euro bond, so buying the AERI version. By my calcs it is marginally over a 7.5% covered yield, vs 5-6% for a lot of others now that most infra has rebounded significantly. Can't see any obvious fatal flaw here, so you'd think that it should catch up eventually?

[alan pt] 12/3/2023 13:31

Seems to have steadied after that fall, though some worry whether it's only the continued buying keeping it at that level, they can't keep buying forever...

Still, given the meltdowns in pretty much everything else exposed to interest rate uncertainty, it's all remarkably calm here

[cc2014] 21/2/2023 16:23

Probably down as 10 year gilt up to 3.6% and US 10 year now over 3.9%

Maybe some profit taking?

[gopher] 21/2/2023 16:12

Now trading at a discount to NAV compared with Par 11 months ago but have been doing relatively well v the sector with decent news flow and some share buy backs. See no reason for todays fall?

[jonwig] 03/2/2023 16:07

Thanks for replies everyone.

[alan pt] 03/2/2023 12:47

Nice article, dividend cover looks very solid

I shall now congratulate myself on my highly skilled timing aka random luck!

[alan pt] 03/2/2023 12:34

Yes, the chart is for AERS, which is UKP, there is also AERI which is euros

Haven't looked in detail, but as far as I can understand it's essentially an administrative convenience, much like EBOX/BOXE

[cc2014] 03/2/2023 12:33

AERS is in GBP and yes you trade in GBP.

[jonwig] 03/2/2023 12:17

Silly question (sorry!): is the share price in the charts pence (GBX) or €cents? If GBX presumably that'swhat you trade in.

Citywire has an article today:

[alan pt] 27/1/2023 18:09

Yes, the new taxes in Spain and Norway are a bit of an annoyance, though seem to have pretty limited actual impact. The EU wide proposals seem fairly reasonable too

Given the EU (and especially Germany) need for renewables, I'm more confident that the government interference level will be low than in the UK where government policy changes with the direction of the wind :)

AERS hasn't really had the operational assets or contract model to capitalise on the power price peaks, so I'm not too worried about price falls doing much damage. If anything, it may have been able to fix some decent forward contracts recently as assets became operational, so there may be an upside there

I did also have a look at AEET (and TEET) - great concept, terrible execution so far. But, as we have seen with AERS, proceeding with typical German caution and patience can be frustrating but may turn out well in the end!

I guess one problem with efficiency is that you need a really strong differentiation to attract money when you have SEIT sitting there. Still, if AEET doesn't go anywhere then you'd think it should be easy enough for Aquila to just liquidate it? It must be a flea bite compared to their private funds?

[cc2014] 27/1/2023 15:58

Keep talking. I find it useful.

I don't think there is any flaw, although I think the NAV is going to impacted by an increase to the discount rate, lower energy prices in Europe and sadly more taxation on renewable assets.

On the other hand some of that is going to get compensated for by the movement in the exchange rate.

I don't think the adjustments are going to be material as a whole and even if the NAV does fall a bit (they can't go up every quarter!) you're still left with a decent discount to NAV.


I've owned this one before but not at the moment. I continue to watch with interest


The other Aquila fund AEET, which I am invested in, is struggling even more. That's running at 29% discount to NAV. Some reasons but 29% is too much. I have to wonder about the common link, although Aquila have about £12b under management in the energy sector IIRC so one would think they know what they are doing.

[alan pt] 27/1/2023 15:36

I may be talking to myself here, but let's see :)

I was invested about three years ago, soon after launch, but I sold out because of the glacial pace of investment

I was prompted to take a look again by this article, flagging the discount:
www.trustnet.com/news/13355955/the-alternatives-trusts-to-snap-up-at-a-bargain-price

Sitting around 76p/86c for AERS/AERI at the moment, for a discount of about 22% and a yield of just over 6%

The interesting thing for me is that it seems to finally be fully invested in generating assets (having invested in some big construction projects which I think have now all completed). Not fully investigated this, but that might imply potential for future dividend increases

Anyway, I bought in again, wondering if there was some fatal flaw which I had missed. But was somewhat reassured today by the news that BG had invested:
www.londonstockexchange.com/news-article/AERS/holding-s-in-company/15812733

Potential negatives
A little small for an infra trust at £450m
Maybe not many retail holders, certainly a bit low on daily trades
How does it grow? Need that discount to narrow a lot to realistically raise

[alan pt] 20/1/2023 13:46

Some good news for Sagres
hxxps://www.theportugalnews.com/news/2023-01-19/hydro-production-hits-new-high/73977

[cc2014] 26/9/2022 11:47

Sold mine Friday. Didn't get a great price but things looking vulnerable. Made a small turn on my buy price and collected some dividends so investment ok if not exciting.

Weak pound should be helping.

[gopher] 31/3/2022 16:02

I have bought a few recently as pretty much the only renewables trust trading around NAV. Aquila are also involved with AEET where non investment of funds is a problem and this may be impacting sentiment here.

[ccr1958] 05/12/2020 09:44

Not much interest here but I having a look .. thx for putting up other renewables Typo56.