Gresham House Renewable Energy VCT nee Hazel

[onslow]

I sent the below to the Gresham this morning, lets see what response I get.

(side note - As a shareholder I object having to go through the manager to ask these questions, I should be able to contact the board directly/via company secretary)

As a shareholder in this VCT I’m writing as I’m concerned about the lack of timely information forthcoming about this sale process.

• The winddown of the company/sale of the assets was agreed 10 months ago at the July 2021 General Meeting
• No further communication on this matter was received until 24th December, when the board advised the annual dividend would not be paid
• It is now 18 months since a dividend has been paid to shareholders
• On 23rd March the board announced issues had arisen with the due diligence of a potential buyer and the sale has been delayed
• I also note this VCT has undertaken little activity since the last fundraise in late 2018.

My questions to the company are:

1. What are the issues that arose during the due diligence, and could these issues have a material impact on the price received for the assets?
2. Why did the board not declare a dividend late 2021? Current shareholders are entitled to cash flows/profits earned by the underlying assets prior to any potential sale of the assets.
3. When can we expect additional newsflow on the sale?
4. Why did the board decide the raise the fees paid to board members? There has been no substantive activity since 2018 until shareholders agreed to sell the assets, and the actions the board has taken since then are exactly what the board is already paid for.

[onslow]

Response back from Gresham that they are not able to announce any more information at this time, however they will forward my email to the board.

I went back and said its not up to Gresham to answer the questions, as the board is accountable to shareholders not Gresham and if the board cant answer the questions they can justify why. I also noted some of the questions (ie board fees) are separate to the questions around the sale of assets and the board should be a in a position to answer questions about the increase in renumeration it has given itself.

Lets see.

[Converse1]

No luck on a reply I presume. This fund now seems a bit of a “stranded asset”, which is ironic given their investments…..

[onslow]

Hi there - Gresham forwarded my emails to the chairperson - Gill Nott - who emailed me offering to call, unfortunately I was travelling so unable to arrange a suitable time for a few weeks and by then the half year report was released. I'm sure I could ask her for another call if warranted

Having a cursory look at the half year report:

1) I'm surprised the manager locked in electricity price contracts during the worse of the pandemic in 2020, when electricity prices were low due to decreased demand. The VCT wont now benefit from the extreme rise in electricity prices until 2023. Does anyone know if locking in ALL output is considered normal? If not why on earth would they do this? Prehaps a question for Gill !

2) No dividend has been paid for 18 months however looking at the cash statement it doesnt appear to have the cash to pay a dividend. I need to look at this further, however funds remaining end of March was very low (£8K I think - I need to double check). Where have the funds gone? Fees for the sale? Another question for Gill !

3) The delay of the sale appears to be partly due to one of their sites selling power to the Honda factory in Swindon, which Honda is due to close. Not sure if the site only powers the Honda factory or its fed into the grid but has a specific contract to sell power to the site. If the later, not sure what the issue is - the VCT could agree to cancel the contract and sell the power into the grid at todays extreme prices. Prehaps the contract is lucrative in its own right, and likely tied somehow to market based prices for electricity. A third question for Gill ! If the site only powers the Honda factory I have to wonder why on earth would they do this? (this is unlikely I would think)

Happy to send Gill any other questions/concerns if anyone has any?

[onslow]

Announcement last week that the sale process has been delayed further, only 15 months since announcement!

Good news for holders is the value of the assets is increasing due to higher electricity prices and potential reduction in corporation tax, things of course which is outside the boards control.

Bad news for holders is the company locked in power prices during the depths of the Covid pandemic in 2020 so to date has been selling electricity at pandemic low prices. Why they would lock in prices at such low levels I dont know, I've asked if this was normal practice prior to Covid havent yet got a answer from the Chair. These locked-in prices are rolling off now so we will start to see higher income, assuming high prices are around for a while yet.

Looking at the accounts released a few months ago doesnt seem a high amount of cash which is unusual, given they havent paid dividend now since 2020.

Sooner this is wound up the better.

[Converse1]

Announcement from the 21st Dec 2022 of a 2p divi to be paid on 27 Jan 2023, plus some more on how hard it is to sell solar assets.

https://www.londonstockexchange.com/news-article/GV2O/correction-dividend-and-update/15768058

[onslow]

18 months and we are still in the same position.

How much has been spent on fees to do with the winding down?
Was the difficulty about selling some of the assets at that particular site known to the board before they recommended the winding down of the company? If so what did they do to mitigate the risk? If not why not?
Why did the manager sell forward electricity prices during the depths of Covid at very low prices, removing any benefit from the higher prices in 2022?
Will the company be subjected to the Electricity Windfall tax announced a few months ago? If so, what is the impact?

Blaming the Truss government and budget shambles is a reach at best. They've had 18 months to sell the assets and little to show for it.

I've emailed the Chair the questions above and will post answers.

[onslow]

I asked the chair to comment on questions above and she was unable to do given the pending release of annual accounts, even after I subsequently reminded her that some of the questions I'm asking pertain to previous years and/or general statements like will the VCT be subjected to the Electrical Generator Levy recently announced by UK Gov. She replied that many of the answers I'm looking for will be released in the announced in the annual report/annual accounts.

Of course today we have this VCT cancelling its interim dividend 2 days before it is due to be paid due to an audit issue.

Great management and oversight here.

[onslow]

In another example of the the competence we have with this VCT - they've cancelled the AGM days before it was due to take place as they realised they didnt send out the correct notifications to shareholders.

This comes on top of them cancelling the dividend payment 2 days before it was due to be paid as they belatedly realised they didnt have enough reserves to pay it.

Thankfully, the board raised their fees in 2021 to ensure we shareholders can retain their excellent skills and top levels of competence.

[127tolmers]

Sale of 20% of solar assets. More delays with the dividend. Hope someone attends the AGM today and feeds back.

https://www.investegate.co.uk/gresham-h ... 00045993X/
https://www.investegate.co.uk/gresham-h ... 00045995X/

Following the RNS issued on 16 March 2023, the Boards of VCT 1 and VCT 2 are pleased to announce that the sale completed yesterday of two ground-mounted solar sites and approximately 1,600 commercial and residential solar installations for a total cash price of £12.6m, with a total capacity of 13 MW. These assets represent around 20% by value of the VCTs' combined portfolios of investment assets. The sales price achieved exceeds the net asset value at the most recent reporting date of 30 September 2022.

The Board of VCT 1 expects to make an announcement as to the dividend payment which will arise as a result of this sale, and also the payment of the delayed dividend of 2p, as soon as possible. However, before any distribution can take place, the capital reduction proposed at the forthcoming AGM on 27 April 2023 needs to be approved by shareholders and then implemented. This is a court-led process that will take several weeks to complete, but we are optimistic that it will be possible to pay the dividend in July. It remains the Board's intention to sell the remainder of the assets as soon as possible, so implementing shareholders' wishes to wind up the Company.

Looks like Downing bought the assets

https://www.investegate.co.uk/downing-r ... 00076174X/

Downing Renewables & Infrastructure Trust plc (the "Company" or "DORE") is pleased to announce the acquisition of a portfolio of operational solar PV assets located in the UK for a cash consideration of £12.6 million. The 13.0 MWp portfolio of two ground-mounted sites and approximately 1,600 commercial and residential installations benefits from high levels of feed-in tariffs and renewable obligation certificate subsidies.

The new portfolio will increase the total number of DORE's managed solar assets to c.4,800 with a total annual average production of 101 GWh. This continues to support the Company's highly diversified investment strategy which is designed to increase the stability of revenues and consistency of income to shareholders.