Foresight Solar Fund's (LSE:FSFL) confirmation that 170MW of operational solar and 122MWp of development-stage battery storage systems in Australia are up for sale is good news, says broker Stifel.
The current intention is that proceeds will be predominantly used to reduce debt at the renewables trust, noted the broker.
At 95p, the shares are trading on a 17% discount to the latest NAV.
Net leverage is currently 65% of NAV, which is a bit lower than some peers, but still too high for Stifel given the costs of debt and volatility in power prices.
This should decline to perhaps below 60% assuming the Australian sale takes place, the broker added.
“On a 17% discount, we retain a positive rating and see scope for some re-rating with further disposals and a reduction in net debt.”