Octopus Renewables Infrastructure Trust PLC (LSE:ORIT) told investors it has cancelled a deal ready-to-build Spanish solar projects as exiting was "a more attractive proposition than committing to the construction".
The investment company, whose shares are trading at almost a 17% discount to net asset value, said it made a £3 million net gain on its €2 million initial deposit after receiving a refund and negotiating a termination payment from the vendor.
Or looked at another way, it said it has gained £1.5 million over the £3.2 million holding valuation of the option on its books, equivalent to a positive 0.3p positive impact on NAV.
Originally agreed in 2020, the option was to acquire 175 megawatts of solar projects in southern Spain, which were intended to become operational in early 2024 with total acquisition costs of €37.8 million once the portfolio was construction-ready and construction costs of circa €82 million, around €120 million in total.
It said it decided against going ahead after reassessing the projects on a risk-adjusted basis and taking into account its current approach to capital allocation.
Chairman Phil Austin said exiting the option "demonstrates ORIT's ability to remain flexible as market conditions change".