Refreshed investment focus & Company name change

RNS Number : 2942Y

RM Secured Direct Lending PLC

12 May 2021

 

RM Secured Direct Lending PLC

("RMDL" or the "Company")

LEI: 213800RBRIYICC2QC958

Update on refreshed investment focus, Company name change and result of Shareholder consultation

RMDL, an investment trust specialising in secured debt investments, provides the following update on its portfolio progress in line with its refreshed investment focus, the change to the Company's name and the recent consultation with Shareholders regarding the liquidity opportunity.

Growth opportunity with refreshed investment focus

RM Funds (the "Investment Manager") has made good progress in growing the portfolio in line with its focus on all new lending being allocated to Social & Environmental Infrastructure assets across six target sectors:

§ Accommodation

§ Healthcare

§ Childcare & Education

§ Clean Energy & Renewables

§ Waste Management

§ Energy Efficiency & Carbon Reduction

The revised investment strategy gives the Company's investors further exposure to critical infrastructure assets at the forefront of providing essential services to society, less correlated to the broader economic cycle and with appealing risk adjusted returns in line with RMDL's performance targets.

The Investment Manager has an attractive pipeline of high-quality transactions across its six target sectors with robust credit metrics and significantly higher yields than would be available in the public markets.

Portfolio Activity

A further Healthcare investment closed during the month of April taking the percentage of the portfolio invested in Social & Environmental Infrastructure to 28%. This is expected to rise to 35% when commitments to be funded over the next 12 months are considered. The Investment Manager anticipates that by year end 2021 over 50% of the portfolio will be invested within the target sectors.

In addition, RM Funds provided additional funding under the Coronavirus Business Interruption Loan Scheme ("CBILS") for eligible borrowers, following which CBILS loans now account for 22% of prevailing unaudited NAV, significantly enhancing the portfolio's counterparty exposure. The Investment Manager expects existing pre-qualified borrowers to access a further c.£8m in CBILS funding by the end of the month. 

Company Name Change

To ensure consistency between the name of the Company and its refreshed investment focus on lending to Social & Environmental Infrastructure sectors, the Company confirms that on 11 May 2021, pursuant to the powers conferred under the Company's Articles of Association, the Board resolved to change the Company's name to RM Social & Environmental Infrastructure Income PLC.

The Company is making necessary filings at the Registrar of Companies to effect the change of name; however there is expected to be a delay in Companies House effecting the change. A further announcement will be made at that time. In conjunction with the change of name, the Company's TIDM will change to 'RMII'. The Company's ISIN and SEDOL will remain unchanged.  The Company will be seeking a change to sector classification in due course.

Impact Framework

With regards to the Impact Measurement and Management framework ("Impact"), The Good Economy expects to finalise the base line Impact scoring of the portfolio during the month of May. This will be critical for the assessment of Impact lending, with progress to be published within the Company's annual Impact Report alongside the 2021 Annual Report and Accounts.

Update on Shareholder consultation regarding the liquidity opportunity

Within its 2020 Annual Report & Accounts issued on the 29 March 2021, the Company announced that, in connection with the proposal detailed in its 2016 IPO Prospectus, to offer Shareholders a Liquidity Opportunity prior to its fourth annual general meeting (which will be held on 8 June 2021), it would engage with its Shareholders to consider their liquidity needs and structure a set of proposals that are suitable and cost effective.  

Since then, the Company has consulted widely with Shareholders representing 90% of shares currently in issue.  The Board is pleased to announce that Shareholders are overwhelmingly supportive of the Company's performance, particularly during the pandemic and its recovery, as well as the updated investment focus and strategy. There was very limited appetite from those Shareholders to participate in a liquidity opportunity. Any Shareholder that has not been consulted who wishes to discuss their options should contact their broker.

In light of this positive feedback, the lack of Shareholder demand for a near-term liquidity opportunity, and noting that putting together formal liquidity proposals for Shareholders would impose a disproportionate administrative and cost burden on the Company, the Board has determined that the next liquidity opportunity will be put to Shareholders in three years' time, as per the Company's prospectus.

Following the extensive consultation exercise with Shareholders the Board confirms that the weighted average life of the portfolio will not materially exceed three years, immediately prior to the next liquidity opportunity. In addition, should the shares trade at an average discount of more than 0 per cent. as measured over the six-month period commencing on 1 October 2022 and ending on 31 March 2023, the Board will seek to bring the liquidity opportunity consultation forward by 12 months to two years' time¹. i.e. prior to the 2023 AGM.

Norman Crighton, Chairman of RMDL, commented:

"The Board would like to thank all Shareholders for their time in providing feedback to this process. The problems the economy has been facing due to COVID 19 are fading fast. The portfolio is performing well and although we continue to closely monitor those assets which have been most impacted by the pandemic, we expect these to continue to improve in line with peers. We are excited about the depth of opportunity to grow the portfolio with our refreshed strategy and believe that the target returns and positive social impact from our investments will also broaden our appeal to new and different investors. Our priority remains to restore the trading of the Company back to a premium to NAV and increase the size of the Company. The Investment Manager has an excellent pipeline of high quality assets that will enable us to grow the portfolio, delivering returns for our investors and delivering positive impact to society."

¹ The average discount will be calculated by dividing the sum of the discount or premium (as the case may be) on each business day (adjusted for dividends) by the number of such business days. The premium or discount on any given day is to be calculated by reference to the closing share price and the NAV announced for that month. Furthermore, the existing discount management policy regarding the repurchase of shares as set out in the IPO prospectus will be maintained.

For further information, please contact:  

RM Capital Markets Limited  - Investment Manager

James Robson

Pietro Nicholls

Tel: [phone]

International Fund Management   - AIFM

Chris Hickling

Shaun Robert

Tel: [phone]

Tulchan Group   - Financial PR

James Macey White

Elizabeth Snow

Tel: [phone]

PraxisIFM Fund Services (UK) Limited   - Administrator and Company Secretary

Brian Smith

Ciara McKillop

Tel: [phone]

Nplus1 Singer Advisory LLP   - Financial Adviser and Broker

James Maxwell

Asha Chotai

Peel Hunt LLP  - Financial Adviser and Broker

Luke Simpson

Liz Yong

About RM Secured Direct Lending PLC (renamed RM Social & Environmental Infrastructure Income)

The Company aims to generate attractive and regular dividends and positive social impact by lending to assets at the forefront of providing essential services to society.

Its diversified portfolio of loans sourced or originated by the Investment Manager with a degree of inflation protection through index-linked returns where appropriate. Loans in which the Company invests are predominantly secured against assets such as real estate or plant and machinery and/or income streams such as account receivables.

For more information, please see  https://rmdl.co.uk/investor-centre/  

About RM Funds

RM Funds is an alternative asset manager. Founded in 2010, with offices in Edinburgh, and London, the firm manages capital on behalf of institutional investors, multi-asset allocators, wealth managers and retail investors. RM Funds focuses on real asset investing across liquid alternatives and private markets.

RM Funds is a delivery partner to the British Business Bank in connection with the Coronavirus Business Interruption Loan Scheme. RM Funds is a trading name of RM Capital Markets Limited.

RM Funds is a signatory to the Principles of Responsible Investment.

 

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