LEI: 254900VC23329JCBR9G82

24 November 2023

Asian Energy Impact Trust plc

(the "Company")

Notice of General Meeting

Introduction

The Company has a portfolio of 11 operating assets across India, the Philippines and Vietnam as well as two "pre-operational" assets, meaning in development or in construction, both in India. These two projects are the in-construction 200 MW DC solar PV project in Rewa Ultra Mega Solar Park (the "RUMS Project") and a 150 MW DC solar PV development project, both owned via the Company's wholly owned Indian subsidiary, SolarArise India Projects Private Limited.

At both the general meeting and adjourned annual general meeting of the Company held on 24 August 2023 (the "August General Meetings") convened in response to a requisition notice received from entities affiliated with the Company's former investment manager, ThomasLloyd Global Asset Management (Americas) LLC (the "Previous Investment Manager"), shareholders, in line with the Board's voting recommendation, voted against a resolution to continue the Company in its present form (the "Continuation Resolution"). The Company's annual general meeting held on 30 June 2023 was adjourned prior to the Continuation Resolution being put to shareholders on the basis that the Board considered that shareholders should have been given the opportunity to make a fully informed decision on the Company's future once the annual report for the financial period ended 31 December 2022 had been published. However, the requisition forced the Company to convene a general meeting at which a Continuation Resolution was to be proposed prior to publication of that financial information.

The Board recommended voting against the Continuation Resolution at the August General Meetings for the detailed reasons stated in the circular to shareholders dated 31 July 2023. In summary, the key reasons were: (i) the continuing uncertainty around the Company's valuations and financial position and, in particular, material uncertainty around the RUMS Project (which uncertainty had led to the suspension of the listing of the Company's shares on 25 April 2023, the "Suspension"); (ii) the lack of a plan from the Previous Investment Manager to assist in a potential relaunch of the Company; and (iii) a failed Continuation Resolution entitled the Company to terminate its appointment of the Previous Investment Manager summarily and without further payment in respect of the Previous Investment Manager's otherwise initial five-year term.

The appointment of the Previous Investment Manager was terminated with effect from 31 October 2023 and on 1 November 2023 the Company announced that Octopus Energy Generation ("OEGen") had been appointed as the new transitional investment manager for a minimum term until 30 April 2024. OEGen's immediate priorities are assisting the Company with finalising the 31 December 2022 and 30 June 2023 valuations, 2022 audit and accounts and 2023 interim report and lifting the Suspension as soon as possible. This process includes undertaking detailed due diligence on the Company's assets, including the RUMS Project, to ensure the completeness and accuracy of all information required to finalise the outstanding valuations, audit and financial reports. An update on the progress made on these critical workstreams since OEGen's appointment as the transitional investment manager is provided below under the heading 'Progress towards lifting the Suspension'. Following the lifting of the Suspension, trading in the Company's shares will recommence.

As a consequence of the Continuation Resolution not being passed, as announced on 24 August 2023, the Board commenced a strategic review of the options for the Company's future (the "Strategic Review"). As explained in more detail below, whilst it is well underway, the Strategic Review is not expected to be completed until the end of the first quarter of 2024.

Under the Company's articles of association (the "Articles"), in the event that a Continuation Resolution is not passed, the Directors must, within four months of the date of the general meeting at which the resolution was not passed, put forward proposals for the reconstruction, reorganisation or winding-up of the Company to shareholders for their approval. The Board has considered possible options for a reconstruction or reorganisation of the Company but, as explained below, has concluded that a reorganisation or reconstruction is not viable or in the best interests of shareholders as a whole. Accordingly, in order to comply with its obligation under the Articles, the Board's only option is to put a proposal to shareholders for the winding-up of the Company and appointment of liquidators (the "Resolution"), although, as explained in more detail below, the Board is recommending that shareholders vote against the Resolution for the following reasons:

·           if the Resolution is passed:

-    it is expected that the listing of the Company's shares will be permanently suspended; and

-    liquidators will be appointed to realise the Company's assets and return cash to shareholders - the liquidators would have an explicit sale mandate and would not be acting in line with the Company's investment and impact policies; rather their mandate would be a simpler realisation focussed process; or

·           if the Resolution is not passed (in-line with the Board's voting recommendation):

-    the Board will have the additional time needed to complete the Strategic Review - the Board expects to conclude the Strategic Review by the end of the first quarter of 2024 and, at this stage, based on the information currently available, the most likely outcome of the Strategic Review is a proposal for either the relaunch of the Company or a managed wind-down of the Company before a formal winding-up;

-    irrespective of whether the Company is relaunched or placed in managed wind-down following completion of the Strategic Review, the Company's portfolio will continue to be managed by a professional investment manager whose priorities will include seeking to optimise shareholder value;

-    shareholders will have the opportunity to vote on the outcome of the Strategic Review; and

-    as set out below under 'Progress towards lifting the Suspension', the Board expects to be in a position to apply for the restoration of the listing of the Company's shares by 29 December 2023.

The notice of the General Meeting at which the Resolution will be proposed will be posted to shareholders today, and copies will shortly be available for inspection on the Company's website https://www.asianenergyimpact.com/, and at the National Storage Mechanism (the "NSM"), which is located at https://data.fca.org.uk/#/nsm/nationalstoragemechanism.

PROGRESS TOWARDS LIFTING THE SUSPENSION

In the brief period since OEGen's appointment, considerable progress has been made on the key priorities referred to above. In particular:

·           OEGen has met with the existing local asset managers responsible for the Company's underlying investments and is reviewing all contractual and governance provisions.

·           OEGen is working closely with Sgurr, the technical adviser appointed by the Board prior to the appointment of OEGen, to review the findings from the updated technical due diligence currently being conducted across all operational sites and will feed those findings back through to the valuations.

·           OEGen has started the review of asset performance and is preparing a review of financial and operational performance through to 30 September 2023 to be presented to the Board on 30 November 2023.

·           OEGen has provided draft valuations for the Company's investments as at 31 December 2022, 30 June 2023 and 30 September 2023 to the Company. PricewaterhouseCoopers LLP ("PwC") has been engaged by the Company and its AIFM, Adepa Asset Management S.A., to provide a private independent review and opinion on the reasonableness of the final valuations. It should be noted that certain inputs into OEGen's draft valuations remain subject to completion of OEGen's due diligence on the Company's investments. However, as anticipated in the Company's announcement of 12 July 2023 and circular to shareholders dated 31 July 2023, the draft valuations that have been prepared show significant downwards movements from the published valuations for 30 September 2022.

·           Drafting of the 2022 annual report is well-advanced and drafting of the 2023 interim report is underway.

·           The Company's auditor has recommenced work on the 2022 audit.

In view of the progress made on these critical workstreams, having consulted OEGen, PwC and the Company's auditor and based on the information currently available, the Board expects to announce the unaudited NAV as at 30 September 2023 by 13 December 2023, and to then publish the audited December 2022 NAV, unaudited June 2023 NAV, 2022 annual report and 2023 interim report by 29 December 2023. Should there be any material change to this expected timetable, the Board will update investors by an announcement through a Regulatory Information Service.

The Company's sponsor has had discussions with the Financial Conduct Authority (the "FCA") with regard to lifting the Suspension. The FCA has confirmed that, once the 2022 annual report and 2023 interim report have been published and uploaded to the NSM, the Company can apply for the Suspension to be lifted. The Board intends to apply, immediately following publication and uploading to the NSM of the 2022 annual report and 2023 interim report, for the Suspension to be lifted. Following the lifting of the Suspension, trading in the Company's shares will recommence.

UPDATE ON THE RUMS PROJECT

OEGen has finalised the appointment of Fichtner as the technical adviser for the RUMS Project. Resources from Fichtner are arriving on-site in late November 2023 to monitor construction progress. OEGen will visit the construction site (and other operational assets in India) in late November into early December 2023. A further update on progress and the expected project completion date will be provided in four to six weeks.

status of the strategic review

Following the Continuation Resolution having failed, the Board began the Strategic Review. The scope of the Strategic Review has taken into account the Directors' obligation to put forward proposals for the reconstruction, reorganisation or winding-up of the Company to shareholders for their approval at a general meeting held on or before 24 December 2023 (being four months after the date of the general meetings at which the Continuation Resolution was not passed). The scope is also cognisant of shareholder feedback since the Suspension, which has repeatedly confirmed the importance to many shareholders of the impact strategy which the Company was established to deliver and their interest in supporting a relaunch of the Company.

The Board, having been so advised, considers that the purpose of the provision in the Articles to put forward proposals for the reconstruction, reorganisation or winding-up of the Company is to offer shareholders an exit opportunity, following a failed Continuation Resolution, within the prescribed timeframe. The Board has considered possible options for a reconstruction or reorganisation of the Company but, given, in particular, the concentrated and illiquid nature of the Company's portfolio and the current size of the Company, the Board has concluded that a reorganisation or reconstruction is not viable or in the best interests of shareholders as a whole. Accordingly, in order to comply with its obligation under the Articles, the Board is putting a proposal to shareholders for the voluntary winding-up of the Company.  For the reasons stated below, the Board is recommending shareholders vote against this proposal.

In view of the shareholder feedback referred to above, the Board, together with its advisers, is engaged in the process of exploring the potential for a relaunch of the Company with a clean energy-focused impact strategy.  A broad range of investment managers, based in the UK and overseas, have been invited to submit proposals for such a relaunch. The Board, with its advisers, is currently analysing the initial proposals received, with a particular focus on the proposed investment strategy, relevant investment experience and track record, resources available to the Company, prospective returns, risks and risk management, marketing capabilities and whether, overall, the proposal offers a compelling investment proposition for both existing and prospective investors to enable the Company to scale up its size significantly over time. Once the analysis has been completed, the Board anticipates inviting a shorter list of potential investment managers to submit final proposals early in 2024.

The Board expects to conclude the Strategic Review by the end of the first quarter of 2024.  At this stage, based on the information currently available, the most likely outcome of the Strategic Review is a proposal for either the relaunch of the Company or a managed wind-down. The latter, if proposed, would seek to achieve an optimal balance between maximising shareholder value and timely return of cash to shareholders, before a formal winding up once substantially all of the Company's assets have been realised.

The Board will continue to consult and update shareholders at key stages of the Strategic Review process.

REASONS WHY THE BOARD RECOMMENDS shareholders VOTE AGAINST THE RESOLUTION

If the Resolution is passed, the listing of the Company's shares is expected to be permanently suspended

Under the Listing Rules, the FCA may suspend the listing of an investment trust's shares if it is winding-up. It is standard practice for the listing of an investment trust's shares to be suspended if it is winding-up. Accordingly, it is expected that, if the Resolution is passed, the Suspension will not be lifted or, if it has been lifted prior to the General Meeting, that the listing of the Company's shares will again be suspended, this time permanently and the liquidators may be required to seek a cancellation of the listing.

To enable the Strategic Review to be completed

As noted above, the Board is progressing its Strategic Review and, once completed, the optimal proposal for the future of the Company should be clear. The Board expects, having delivered on the immediate priorities referred to above, to complete the outcome of the Strategic Review by the end of the first quarter of 2024. Voting against winding-up the Company at the General Meeting will allow the additional time needed to complete the Strategic Review.

Shareholders will have a further opportunity to vote on the Company's future following completion of the Strategic Review

If the outcome of the Strategic Review is a recommendation to relaunch the Company, the Board will put forward a further Continuation Resolution to shareholders for their approval before implementing that outcome. Alternatively, in the event of the Board recommending a managed-down, material changes will be required to the Company's current investment policy and such changes would require to be approved by an ordinary resolution of shareholders (the same level of approval as is required for the Continuation Resolution).

If the Company is relaunched following the Strategic Review, there will be further opportunities to vote on its continuation

The Articles require a further Continuation Resolution to be proposed at the Company's annual general meeting in 2027 (being the first annual general meeting of the Company held following the fifth anniversary of the completion of its IPO). If that Continuation Resolution is passed, the Articles require that a further Continuation Resolution be proposed at every fifth annual general meeting thereafter. If any Continuation Resolution is not passed, the Directors must put forward proposals for the reconstruction, reorganisation or winding-up of the Company to shareholders for their approval within four months of the date of the general meeting at which the resolution was not passed.

The liquidators would have a narrower mandate than an investment manager and would be focussed primarily on the realisation of assets

The liquidators would have an explicit sale mandate and would not be acting in line with the Company's investment and impact policies; rather their mandate would be a simpler realisation focussed process.

Conclusion

For the reasons set out above, the Directors unanimously recommend shareholders vote against the Resolution being proposed at the General Meeting.

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