RM Infrastructure Income PLC (LSE:RMII) (RMII) has announced that it is undertaking a strategic review to assess its future prospects.
The company, which focuses on providing attractive net asset value (NAV) total returns and generating high net interest income, noted that it has faced challenges in improving liquidity and expanding due to its small scale and shares trading at a discount.
The review was prompted by a non-binding indicative proposal received by RMII's board in early April. The proposal involved combining all of the company's assets with another investment company. However, the proposal did not offer RMII shareholders any cash options, and the board has been working to address issues that would negatively impact shareholders. If the counterparty improves its offer substantially, the company said its board intends to explore the opportunity further.
RMII said, while its board believes the company is still well-positioned to generate attractive returns, the strategic review will consider various options. These options include continuing the company's existing investment policy, a partial or full exit opportunity through a buyback or distribution method, combining assets with another suitable investment company or fund, or a managed wind-down of the company.
The company said Singer Capital Markets and Peel Hunt, joint brokers to RMII, will be in contact with shareholders to provide further information, and the board will keep shareholders updated on the progress of the strategic review.
RMII noted that the review supersedes the previously announced liquidity opportunity consultation and the company's existing investment policy and strategy will continue to be applied during the review process, but the outcome and potential transactions are uncertain.
The company said the decision to undertake the strategic review reflects the challenges faced by many investment companies in maintaining liquidity and growth and RMII's board is also mindful of the fact that some of its peers trade at similar or wider discounts, which adds further consideration to the decision-making process.