SDCL Energy Efficiency Income Trust sets out Wind-Down proposals and General Meeting notice

SDCL Energy Efficiency Income Trust (LON:SEIT) has today published a circular containing a notice of general meeting that will be circulated to its shareholders.

The purpose of the Circular is to provide Shareholders with the information needed to consider, and if thought fit approve, the adoption of the Wind-Down Investment Objective and Policy, the cancellation of the Company’s share premium account in order to create further distributable reserves, and the amendment of the Company’s Articles of Association to remove the Continuation Vote provisions.

Copies of the documents are also available on the Company’s website at: https://www.seitplc.com.

The general meeting of the Company will be held at 12.00 noon (BST) on 10 July 2026 at the offices of Sustainable Development Capital LLP, One Great Cumberland Place, London, W1H 7AL.

Summary

· As announced on 9 April 2026, the Board concluded that the status quo was not sustainable, having regard to the persistent share price discount to NAV, the Company’s gearing position, the lack of access to equity capital and clear feedback from major Shareholders in favour of an orderly return of capital.

· Shareholders are being asked to vote in favour of: (i) the adoption of the Wind-Down Investment Objective and Policy; (ii) the cancellation of the Company’s share premium account; and (iii) amendments to the Articles of Association to remove the Continuation Vote provisions (collectively, the “Proposals”).

· If approved, the Company will cease making new investments outside the existing portfolio and will focus on the orderly realisation of its assets, seeking to balance timely returns of cash to Shareholders with the objective of maximising value.

· The Board intends to use net proceeds of asset realisations first to repay borrowings and then to make returns of cash to Shareholders at appropriate intervals, using the mechanism or combination of mechanisms it considers most appropriate.

· The Board has decided not to declare a fourth interim dividend for the year ending 31 March 2026 and, in light of the proposed Wind-Down, will prioritise preserving value and reducing debt ahead of future returns of cash to Shareholders. Interim dividends will be suspended (other than as necessary to maintain Investment Trust Status) however once the RCF has been significantly reduced the Board will reconsider its position on paying interim dividends if circumstances allow.

· The expected timetable in the Circular provides for the General Meeting on 10 July 2026, the results announcement and policy adoption shortly thereafter, and the Court process for the proposed share premium cancellation in or around September 2026.

Background to and reasons for the Proposals

SEIT was established in 2018 to invest in a diversified portfolio of energy efficiency and distributed energy assets, generating attractive income returns underpinned by long-term, predominantly contracted, cash flows.

Notwithstanding the performance of the underlying portfolio, in recent years the Company has faced a number of significant and persistent challenges which have negatively affected its future prospects. In particular, the Company’s Ordinary Shares have traded at a material and sustained discount to NAV, restricting access to equity capital and constraining the Company’s ability to fund portfolio commitments. The Board is of the view that there have been no signs that this discount is capable of significantly narrowing in the near term.

At the same time, consolidated gearing increased to 71.9 per cent. of NAV as at 30 September 2025, exceeding the 65 per cent. limit in the existing Investment Objective and Policy. This reflected both a small decline in NAV and the inclusion of the new tax equity bridge loans at the Onyx platform level within aggregate borrowings.

Engagement with major Shareholders in early April 2026 indicated that there was insufficient support for an alternative internalisation proposal as a strategic alternative and that this would likely not achieve the required 75 per cent. approval threshold. Shareholder feedback demonstrated a clear preference for a return of capital and liquidity rather than a medium to longer-term value creation strategy.

Shareholder approvals being sought

Implementation of the Wind-Down requires a material amendment to the Company’s existing Investment Objective and Policy. Resolution 1, which will be proposed as an ordinary resolution at the General Meeting, seeks Shareholder approval for the adoption of the Wind-Down Investment Objective and Policy.

In order to provide the Board with the greatest degree of flexibility in returning the net proceeds of asset disposals to Shareholders, the Board is also seeking Shareholder approval for the cancellation of the amount standing to the credit of the Company’s share premium account which is sought under. Resolution 2. The proposed cancellation is not interconditional with Resolution 1.

Finally, the Board is proposing amendments to the Articles of Association to remove the Continuation Vote provisions, which would no longer be required if the Company enters the Wind-Down under Resolution 3.

The Board believes that a sale of the entire portfolio, whether to a single purchaser or a small number of purchasers, would likely be the most efficient means of realising value for Shareholders. If a portfolio sale cannot be achieved on acceptable terms, the Company will pursue asset-by-asset or grouped disposals. The Board remains open to proposals for all or any of the Company’s assets.

Given the nature and geographic spread of the portfolio, which now comprises investments across five countries at varying stages of maturity, the Circular notes that it is uncertain as to what the ultimate length of the Wind-Down will be and that it could take a number of years to complete. The Board and the Investment Manager will seek to balance the pace of disposal activity against the objective of maximising value.

The Board and the Investment Manager are in discussions around the appropriate amendments to be made to the Investment Management Agreement to take account of the arrangements required during the course of the Wind-Down and align economic interests towards monetising assets. Jefferies has been retained as independent financial adviser to the Board to advise on and coordinate the disposal process, and the Circular states that initial contact with potential asset acquirors has commenced.

Investment policy during the Wind-Down

To implement the Wind-Down, the Company is proposing to adopt a revised Investment Objective and Policy reflecting its new objective of asset realisation. The Company will cease making new investments outside the existing portfolio and will only provide follow-on capital to existing assets in limited circumstances where, at the full discretion of the Board, this is deemed necessary to protect or enhance value, meet contractual obligations or ensure regulatory compliance.

Any replacement debt facilities at asset level will be managed on an asset-specific and facility-specific basis in order to support the orderly operation, value preservation and realisation of the Company’s assets. The limits of each facility are provided in the Circular.

At Company level, the Circular provides that the Company may continue to utilise short-term borrowing facilities, including via SEEIT Holdco, subject to an aggregate cap of the lower of GBP 200 million or 25 per cent. of Gross Asset Value, calculated at the time of borrowing. As at the date of the Circular, the outstanding balance under the revolving credit facility was stated to be approximately GBP 190 million from a total facility size of GBP 240 million.

Dividends and return of cash to Shareholders

The Board has decided not to declare a fourth interim dividend, which would normally have been paid at the end of June, because of reduced cash inflows from the portfolio in the second half of the year, mainly as a result of reduced receipts from Onyx, and the continuing capital-constrained position of the Company.

Whilst the Board had considered declaring a reduced interim dividend reflecting the lower second half cash inflow, in light of the Wind-Down it considered it more appropriate to prioritise balance sheet strength and value preservation, in particular reducing debt.

This decision, which was not easy to take, aligns with a decision to suspend future dividends (other than as necessary to maintain investment trust status). Clearly the aim of the Wind-Down is to significantly reduce drawings under the Company’s revolving credit facility and then return cash to shareholders as disposals are made. Once the revolving credit facility has been significantly reduced the Board will reconsider its position on paying interim dividends if circumstances allow.

To maximise flexibility to return cash in an efficient and equitable manner, the Board is proposing the cancellation of the amount standing to the credit of the Company’s share premium account, stated in the Circular to be approximately GBP 757 million as at 31 March 2026.

The Company intends to maintain its investment trust status, its listing on the premium segment of the Official List and trading in the Ordinary Shares on the Main Market of the London Stock Exchange. The Company anticipates continuing to pay dividends to the extent required to comply with the investment trust regime for so long as it is able to do so.

Expected timetable

The full timetable, the full text of the Resolutions and all procedural details for voting are contained in the Circular and the Notice of General Meeting. Each of the times and dates in the expected timetable may be extended or brought forward without notice and, if changed, the revised time or date will be notified to Shareholders by announcement through a Regulatory Information Service.

Action to be taken

A Proxy Form for use at the General Meeting accompanies the Circular. Shareholders are asked to complete, sign and return the Proxy Form as soon as possible in accordance with the instructions printed thereon, whether or not they intend to attend the General Meeting in person.

If Ordinary Shares are held in uncertificated form in CREST, Shareholders may appoint a proxy by completing and transmitting a CREST Proxy Instruction in accordance with the instructions set out in the Circular. Completion and return of a Proxy Form, or submission of a CREST Proxy Instruction, will not prevent a Shareholder from attending and voting in person if entitled to do so.

The Board strongly encourages Shareholders to read the whole of the Circular and not to rely solely on the summary information set out in this announcement. In particular, Shareholders should review the Wind-Down Investment Objective and Policy in Part II of the Circular and the risk factors in Part III before deciding how to vote.

Board recommendation

The Board has considered carefully the alternatives available to the Company and unanimously concluded that the proposed Wind-Down is in the best interests of Shareholders as a whole.

Accordingly, the Board recommends that Shareholders vote in favour of all of the Resolutions to be proposed at the General Meeting. Each Director intends to vote, or procure votes, in favour of the Resolutions in respect of his or her own beneficial holding of Ordinary Shares, and the Investment Manager has also indicated in the Circular that it intends to vote in favour of the Resolutions in respect of its Ordinary Shares.

A copy of the Circular has been submitted to the National Storage Mechanism and will shortly be available for inspection. The Circular is also available on the Company’s website at https://www.seitplc.com.

For all definitions contained within this document, please refer to the Definitions at the end of the Circular unless the context otherwise requires.