Can now buy at the bid price. If you add on the 1p of earnings since last results then the discount is now 30%. Seems high for a trust that has failed its continuation vote.
Then again most of the fixed incomey type stocks are getting bashed just now. |
AGM today. Should get news on this;
In response to the failed Continuation Vote, the Board is also proposing, at the AGM, along with the subsequent continuation vote, an amendment to the Company's Investment Policy whereby the Company is placed into a managed run-off (the "Managed Run-Off"). This resolution (the "Continuation Managed Run-Off Resolution") seeks to acknowledge and reflect the views expressed by Shareholders in the February 2023 Continuation Vote, whilst the Board continues to consider strategic solutions in respect of the Company's assets to realise maximum value for Shareholders in the shortest possible time... |
Schroders Capital gains FCA approval for renewables and energy transition LTAF
Perhaps they would like to get off to a quick start and buy some of AEET's asset at close to NAV? |
Thanks cc2014. My thinking is job lot be around 82p so if drifts back a bit more to say 73p offer will add |
Well the best solution is clearly that they sell the whole lot tomorrow for 90p but if that was going to happen the share price would be creeping up now
When interest rates start falling the fixed income coupons on many of the investments will start to look highly attractive and the NAV will rise. I guess that's about a year out although the market thinks much sooner.
So, I think it likely we have to wait until at least the end of the year for the chance of a one-off large transaction.
In the meantime I'm happy to collect the dividend, have some capital returns later in the year and be patient over a transaction.
I guess the Board would be in a difficult place if someone offered 85p now for the whole lot. It's kind of around the discounts in other renewable funds. I guess if I was offered 85p tomorrow I'd feel aggreieved but would cope. |
CC2014, where do you see the windup price being and how long. Maybe they will sell lock stock and barrel to another fund at a discount |
This seems to be the end of the line for AEET.
I'm sad. This trust seeks to cut carbon emissions yet it seems major shareholders are not committed to this. So much for the E in ESG. |
Managed wind down. Seems appropriate given holdings |
It's found a level but certainly not attacking the NAV. Due a quarterly fact sheet at least though. |
All todays's trades are sells apart from the first one at 77.015p.
And interestingly the bid has nudged up twice from 75p to 75.5p to 76.0p against this flow of sells.
It's XD today so that's 1.25p in the bag.
I am interested to see what happens next. The bid can move to 76.5p but after that it can't as it will collide with the offer at 77p. I think at that point we may find out more about the intentions of the MM's. My best thesis is that they are collecting stock quietly for someone. I note a late trade last night of 100k at 77p which based on the time stamp looks like a sell as well |
heads you get an exit near NAV in the next 3-6 months. say a 5% discount to NAV.
Sell at 90.725 plus a couple of dividends along the way = 93.225.
Buy at 78.5p
Gives 18.75% return in 3-6 months
tails it carries on and you get 5p dividend this, followed by around 8.5% return next year as gearing deployed. I guess discount will narrow to 10% by then
Sell at 85.95 plus 5p plus 8.5p = 99.45p
Buy at 78.5p
Gives 26.69% over 22 months or around 14% a year.
Heads you win, tails you win. |
Probably the right result.
The problem is patience is required to get a good financial outcome which will be at a discount to NAV but the assets are likely decent quality and if you work out a return percentage it will be beat the market handsomely.
No question it will be wound up eventually IMO |
I don't think management or shareholders will accept selling this at a substantial discount to NAV. I bought some more this afternoon at 77.99p. If we get NAV then I'll make 22%. Conservatively, I don't expect to make less than 10%, which is also fine by me.
I voted against continuation as soon as the documents were released. They were in ridiculous denial of the facts. You can't grow NAV at such a low market cap or with such a high discount. The yield of 7% isn't that great when larger trusts with longer pedigrees are offering the same - and rising base rates mean that relatively the yield isn't that great and NAV will suffer downward pressure. |
I'd say that was unexpected |
Only last week I decided to add to my holding in SEIT rather than here ....mainly because I was unsure of the outcome of this vote.
I would imagine liquidating the assets could be long and messy so a "job lot" offer could come along but it would have to be at a substantial discount to make it worth the bother.
Is it in managements interests to make this process easy ? |
I'm conflicted about this, winding up would get me out of the hole I've dug for myself, on the other hand the recent updates were very positive. I suspect that the current shareholders include many who have no interest in energy efficiency and were looking for 'special situations' to make money from. I'm also wondering about the cost of liquidating the assets and how long it would take, would a merger be a better option? |
I read it as saying that after the proxy voting and before the meeting tomorrow it is very likely that the motion of continuation will fail.
As a result of the continuation motion failing the company will be wound up(????)
As the share price was at a considerable discount to the NAV the market is assuming a move closer to NAV.
Only been here since Nov 2022 then bought more in December....not really involved or up to speed but the above is just my take on things. |
I don't know what I think of that announcement.
The market likes it. |
 My view is that the stock market is a curious place and the attitude to a stock can turn almost on a sixpence. I hope that is one of those occasions and AEET will be much higher sooner.
It's been available to buy at around 70p since the beginning of November and then in late January and early February prices under 70p were available with 68p briefly about the best you could buy at.
During those 3 months there was plenty of stock around and it felt like the MM's always had plenty. Certainly 90% of the time they did.
Somewhere about a week ago things changed and now the MM's have no stock at all. Since the last trade at 68p (which was mine) there's been almost nothing available to buy, not even 1000 shares most of the time. If you want to sell they are now offering 72p for reasonable size.
I suspect it's nothing more complicated than the seller has cleared.
Perhaps what tippped it more than anything is the publication of all the loans and the quality of the security. As someone else said it's much higher than they thought and I agree. It's completely transparent which always helps.
I have voted for the continuation and would encourage others to do the same. Voting is now available on both AJ Bell and HL. I'm happy to hold, collect the dividend and let the share price run up. The alternative is waiting for the Board to make a recommendation and then another vote. By then I suspect the share price will have run up anyway. |
Seeing the £20m buyback for AERS, I was expecting Aquila to launch a ~£2m buyback for AEET ahead of the continuation vote to boost the share price and get people excited. |
Making a small paper profit on some of my purchases now, unfortunately I'm still making a huge loss on the rest. The fantasy scenario would be an activist investor buying a big stake in the company ahead of the vote. Aquila's other fund AERS was at such a big discount that they decided to introduce a share buyback program so I wonder if Aquila might decide to cut their losses and quit the UK. |
Looking more hopeful here. The MM's have relented and will let you buy 2500 shares for a change. Full price of 73p though. |
No obligation at all. It's also interesting that this RNS didn't come out with the others.
I see it as the fund manager making a clear committment to the fund either as an attempt to persuade investors to vote for the continuation vote or they just see the shares as so cheap they are happy to buy anyway as they know they'll get far more than the current share price if the fund is wound up. |
Yes its interesting especially since they had no obligation to do this? |
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