LONDON: Riverstone Energy Limited (REL), a publicly traded energy investment company, announced Monday that it has reached an agreement in principle with its investment manager, RIGL Holdings LP, to initiate a managed wind-down of its remaining investment portfolio.
The proposed wind-down, which requires shareholder approval, would involve the orderly liquidation of REL’s assets and the gradual return of capital to investors. The board of directors said the plan is in the “best interests of shareholders as a whole.”
Key Terms of the Proposal
– Revised Investment Policy: REL will seek shareholder approval to amend its investment objective to focus on liquidating its holdings and distributing cash to shareholders. The company’s articles of incorporation would also be updated to allow for compulsory share redemptions as proceeds from asset sales are returned.
– Continued Oversight by RIGL: RIGL would remain as investment manager but would require board approval for any further investments or asset disposals.
– Reduced Management Fees: The annual management fee would drop from 1.5% of net asset value (including cash) to 1% of NAV (excluding cash), with a minimum annual fee of $500,000 through Dec. 31, 2027. Performance-based fees would be eliminated.
– Adjustment Payment to RIGL: REL would make a two-part cash payment to RIGL:
– The first tranche, tied to REL’s conventional and public decarbonization portfolios, would be paid shortly after shareholder approval.
– The second, linked to the sale of REL’s private decarbonization assets, would be paid after the final divestment.
The payments are based on a termination formula under REL’s existing investment management agreement but exclude performance-based compensation.
REL plans to publish a detailed shareholder circular soon, outlining the wind-down process, expected asset sale timelines, and revised agreements with RIGL. The company aims to secure all necessary approvals by Aug. 15, 2025, with the wind-down commencing immediately afterward.
The proposal still requires consent from certain third parties with indirect stakes in RIGL, as well as regulatory approvals. Both REL and RIGL have committed to finalizing documentation and obtaining the required clearances.
Riverstone Energy Limited, listed on the London Stock Exchange, has historically focused on energy and decarbonization investments. The proposed wind-down reflects a strategic shift as the company moves to return capital to shareholders.