LONDON: ORIT, a renewable energy investment trust listed on the London Stock Exchange (LSE), has announced its intention to merge with Aquila European Renewables plc (AERI), another LSE-listed trust, to create one of the largest and most diversified renewable energy portfolios in Europe.
The proposed merger would be carried out through a scheme of reconstruction under the Insolvency Act 1986, and would result in a combined portfolio with a net asset value of almost £1 billion and a gross asset value of about £1.6 billion. The merged entity would have exposure to various renewable energy technologies, such as wind, solar, hydro, green hydrogen, and battery, across several European countries.
ORIT said the merger would offer several benefits to both sets of shareholders, including a higher and more stable dividend, greater market liquidity, lower cost of capital, and access to a significant pipeline of projects. ORIT also said it had received support from a number of AERI shareholders for the merger, and urged the board of AERI to enter into substantive discussions.
ORIT has been pursuing a merger with AERI since March 2023, but has faced resistance from AERI’s board, which has delayed a formal response until 2024. ORIT said it was confident that the merger would create value for both companies and their shareholders, and hoped to reach an agreement soon.
The terms of the merger are expected to be based on the fair asset value of each company, as agreed by ORIT and AERI. The merger would require the approval of both companies’ shareholders, and would lead to the voluntary liquidation of AERI.