Shares in SDCL Energy Efficiency Income Trust PLC (LSE:SEIT) fell 19% to 37.18p on Tuesday after the energy efficiency investor scrapped its next dividend and moved to suspend payouts as part of a wind-down.
The trust will not declare a fourth interim dividend, normally paid at the end of June, and will suspend future distributions beyond those needed to keep its investment trust status.
It blamed reduced cash inflows in the second half, mainly lower receipts from its Onyx platform, and a capital-constrained balance sheet.
The board said it would prioritise reducing debt and preserving value before returning cash to shareholders.
The decision accompanied publication of a circular asking shareholders to approve a formal wind-down at a general meeting on 10 July.
If backed, the company will stop making new investments and focus on selling its portfolio in an orderly fashion.
The board favours a sale of the entire portfolio to one or a small number of buyers, but warned the process could take several years.
The portfolio spans energy efficiency and distributed energy assets across five countries at varying stages of maturity.
Jefferies has been hired as independent financial adviser to coordinate disposals, with initial contact with potential buyers already under way.
The wind-down follows the board's conclusion in April that the status quo was unsustainable.
Its shares have traded at a persistent and material discount to net asset value, cutting off access to equity capital.
Gearing had also climbed to 71.9% of net asset value by the end of September, breaching the trust's 65% limit.
Shareholders are also being asked to cancel the company's share premium account, about £757 million at 31 March, to create distributable reserves.
Proceeds from asset sales will first repay borrowings, including a revolving credit facility drawn at about £190 million.
