Just wandering if there is a stop on this downfall.
With how much selling there’s been they will probably initiate a strategic review which will most likely lead to a wind up and sale of the assets. Infra trusts that have declined this much have generally lost confidence of investors and don’t tend to survive. See Cordiant Digital as a recent example.
The good news is there’s been a number of transactions in the industry at or even above book values, which are much higher than the current share price.
What happens to the shares in the event of asset sale?
And BTW is that 20% dividend figure correct?
You would receive cash or shares in the purchasing entity depending on the deal.
That dividend figure is technically correct but is backwards looking. HEIT have cancelled their dividends and I don’t anticipate they will have funds available to pay them again until at least next year, if at all, unless they can raise extra funding.
Makes sense, I was wondering how they would keep paying such high dividends. Bit of a double whammy for investors though.
thank you
UK Capacity market may have bottomed. Ofgem and NG ESO worried by the market reaction to their recent policy stance perhaps?
On 20 February 2024, six of the Company’s BESS assets successfully bid for T-1 Capacity Market contracts for delivery from 1 October 2024 through to end September 2025. The auction cleared at £35.79/kw/yr, lower than last year but higher than the Company’s expectations. Once de-rating is taken into account, this increases the Company’s contracted revenue for this period to £3.2 million (circa £8k/MW), of which £1.7 million has not yet been factored into the Company’s modelled cash flows.
Together with a refinancing at a lower rate they might even reinstate dividends soon.
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Looks like Balancing Mechanism revenue is recovering thanks to reform and increasing wind penetration widening spreads, which was always the investment case for these trusts. I’d still prefer to top up Gore Street than the others though.
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Get in while it’s still suppressed