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(Alliance News) - abrdn European Logistics Income PLC on Monday said it will propose an orderly wind-down, which its chair called "the optimal route to maximise shareholder value".
The London-based investment trust, which backs European warehouse properties, commenced its strategic review and formal sales process in late November.
"The board launched the strategic review recognising that the company faces a number of challenges, at both a macro and company specific level," abdrn European noted.
It reiterated that these challenges include its GBP234 million market capitalisation, which it believes is "liable to deter some potential investors due to lower share liquidity"; a "materially uncovered" target annual dividend of 5.64 euro cents per share; and its stock "trading at a significant and persistent discount to the net asset value per share".
abrdn European's NAV at December 31 was 93.4 cents per share, down 21% from 118.9 cents one year prior.
On Monday afternoon in London, the stock was trading 1.6% higher at 61.80 pence per share.
abrdn European said that after a detailed review of its available options, it has decided to propose a managed wind-down of the company.
The indicative potential value from the wind-down, the trust explained, "is materially in excess of the net value achievable from the indicative cash offers received, all of which were subject to a number of preconditions and all of which represented material discounts to the company's current net asset value".
Other factors influencing the board's decision, abrdn European added, include the fact that "a significant majority of interested parties" have indicated their "strong preference" to buying individual assets, or assets in certain geographies, rather than acquiring the whole portfolio.
abrdn European added that if shareholders approve the wind-down, it intends to continue paying dividends, although these decrease as the portfolio shrinks and as it returns capital to shareholders.
"The board undertook the strategic review to enable it to comprehensively evaluate all options for shareholders, with strong interest shown in the company," commented Chair Tony Roper. "Despite retaining a high conviction in the logistics asset class and investment strategy, given the challenges facing both the company and the broader investment trust sector, the board has concluded that a managed wind-down in a timely manner is the optimal route to maximise shareholder value in the short to medium term."
By Emma Curzon, Alliance News reporter
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