SDCL Efficiency Income Trust plc (SEIT), the London-listed investment company that made history as the first UK-listed fund to invest exclusively in energy efficiency, has announced the sale of a diversified global portfolio of 11 operational and yielding energy efficiency infrastructure assets through its subsidiary, SEEIT Holdco Limited. The buyer is Kyotherm SAS, a Paris-headquartered investment company that specialises in financing decarbonised heat and energy efficiency projects worldwide, and the deal carries a total enterprise value of up to approximately £105 million — roughly equivalent to $141 million.
The transaction, which is subject to customary closing conditions, is expected to complete by mid-April 2026. It represents the most significant step yet in SEIT’s ongoing campaign to reduce its elevated debt levels and reposition its portfolio for the long term.
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A Portfolio Spanning Continents and Asset Classes
The disposal encompasses a broad range of energy efficiency infrastructure holdings that span several countries and technology types. According to SEIT’s official regulatory announcement, the portfolio being sold includes the company’s interests in Capshare Future Energy Solutions, Sparkfund, Moy Park Biomass, Tallaght Hospital, Baseload, Lycra, SEEIPL, Northeastern US CHP, CPP Biomass, Supermarket Solar UK, and GET Solutions. These assets cover co-generation, solar and storage, biomass, and process efficiency technologies — a cross-section of SEIT’s broader multi-asset approach.
The sale price was agreed at approximately 9% below the carrying value of the portfolio as recorded at 30 September 2025, which is expected to reduce SEIT’s net asset value (NAV) by roughly 1.2 pence per share. With NAV per share standing at 87.6p as of the most recent half-year results, this discount, while notable, has been described by analysts at Edison Investment Research as reasonably tight given the current difficulties in the private infrastructure market.
Notably, the headline consideration of up to £105 million includes an earnout component of up to £4 million, which SEIT would receive if certain agreed performance targets are met over the next three to five years. On a day-one basis, the net cash proceeds expected at completion are approximately £84 million, after accounting for permitted distributions, transaction costs, and the settlement of debt and debt-like obligations.
The Imperative to Deleverage
The disposal is far from a routine portfolio adjustment — it sits at the heart of an urgent strategic priority for SEIT. The company’s gearing had climbed to 71.9% of NAV as at 30 September 2025, well above its own investment policy limit of 65%. The board had previously instructed the investment manager not to incur further borrowings until gearing was brought back below that ceiling, with reduction of the company’s revolving credit facility identified as the top priority.
With this latest disposal, together with anticipated near-term project-level debt reductions, SEIT is now targeting pro-forma aggregate gearing of approximately 65% of NAV — precisely at the threshold of its policy limit. The company has confirmed that proceeds from the sale will be applied primarily toward reducing drawings under its existing revolving credit facility.
This transaction follows on from the earlier sale of ON Energy at an 18.75% premium to its holding value, a smaller deal that helped demonstrate management’s ability to crystallise value. However, the Kyotherm disposal is considerably larger in scale and scope, and its completion at a discount to book value highlights the challenging conditions that sellers face in the current infrastructure market.
Continuation Vote Looms Large
The urgency behind SEIT’s deleveraging is sharpened by a critical continuation vote scheduled for its 2026 annual general meeting. At a previous AGM in September 2023, shareholders approved the company’s continuation as a closed-ended investment trust through to the conclusion of the 2026 AGM. However, the road since then has been turbulent.
In December 2025, SEIT’s chair Tony Roper issued a stark warning that without material progress on disposals, debt reduction, and returning capital to shareholders, the board would be unlikely to recommend continuation in its current form. This message was delivered against the backdrop of a share price decline from a peak of around 124p in July 2022 to the mid-40s — a steep erosion of shareholder value that has left the stock trading at a discount of approximately 49% to NAV.
Adding further complexity, activist hedge fund Saba Capital disclosed a 5% stake in SEIT in September 2025, shortly after the company’s AGM. Saba, run by New York-based investor Boaz Weinstein, has been an active presence across the UK investment trust sector. Its involvement raised expectations that pressure for a resolution of the discount — whether through accelerated disposals, capital returns, or a structural overhaul — would intensify. By December 2025, reports indicated that Saba had doubled its stake to around 10%, underscoring the activist’s commitment to pushing for change.
In announcing the Kyotherm transaction, Roper called the disposal a positive outcome resulting from months of disciplined execution. However, he struck a cautionary note, observing that the sale of a high-yielding asset portfolio at even a modest discount, and one which had taken longer than expected, illustrated the difficulties of executing disposals at reasonable valuations in the current environment. He also warned that the board considers it unlikely that other individual asset sales would deliver equivalent value in the near to medium term, suggesting that further downward adjustments to NAV may be reflected in the company’s year-end valuation in June.
Despite these headwinds, SEIT confirmed there would be no change to its target dividend of 6.36p per share for the current financial year, which places the stock on a yield of approximately 14% at recent share price levels.
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Kyotherm: A Strategic Buyer With Growing Ambitions
On the other side of the transaction, Kyotherm represents a strategic and well-capitalised acquirer with deep roots in the energy efficiency space. Founded in 2011 and headquartered in the Paris suburb of Villennes-sur-Seine, Kyotherm has grown over more than a decade into a significant player in the financing of decarbonised heat and energy efficiency projects. The company currently manages a portfolio of 84 projects across 16 countries, with a net installed capacity of approximately 290 MW.
Kyotherm’s business model centres on an “as-a-service” approach: it invests equity, structures bank financing, and mobilises subsidies to support the development of decarbonisation projects, allowing its industrial and commercial customers to reduce their carbon footprints without bearing the upfront capital costs and operational risks themselves. The company works across a range of technologies including geothermal, biomass, solar thermal, waste heat recovery, heat pumps, and energy flexibility.
A pivotal moment in Kyotherm’s growth trajectory came in November 2024, when the company announced the successful completion of its 14th round of financing, led by InfraVia Capital Partners, a leading European infrastructure investor managing approximately €15 billion in capital. InfraVia became Kyotherm’s reference shareholder through this transaction, joining long-standing backer Andera Partners. This backing has significantly expanded Kyotherm’s capacity to pursue larger-scale acquisitions — a dynamic that is clearly reflected in its ability to execute the £105 million SEIT portfolio purchase.
In December 2024, the company also secured €17 million in long-term senior debt from Crédit Agricole Transitions & Énergies to finance a portfolio of 25 energy efficiency projects across Europe and the United States, further demonstrating its ambitions to scale.
The acquisition of SEIT’s portfolio adds 11 assets spanning multiple jurisdictions to Kyotherm’s existing holdings, providing geographic and technological diversification as well as a base of operational, yielding infrastructure that is already generating revenues.
Advisory Team and Market Significance
The transaction has drawn on significant advisory firepower. Goldman Sachs International acted as sole financial adviser to the SEIT entity involved in the disposal, while international law firm Orrick is advising SEEIT Holdco on the transaction. Orrick has a longstanding relationship with SDCL and SEIT, having previously advised on the company’s revolving credit facility arrangements and on the 2024 disposal of SEEIT Sol Limited to UK Power Networks Services Holdings Limited.
Ravinder Sandhu, a partner at Orrick, remarked that the disposal spans multiple energy efficiency asset classes across several jurisdictions, reflecting both the breadth of SEIT’s portfolio and the depth of strategic interest in the sector. Adam Smith, Orrick’s client relationship partner to SDCL and SEIT, added that the transaction positions SEIT’s portfolio for greater focus and long-term value creation in the energy efficiency space.
A Streamlined Future for SEIT
Following the completion of this disposal, SEIT’s remaining portfolio will be increasingly concentrated on commercial and industrial customers and district energy solutions — two segments where the company and its investment manager, Sustainable Development Capital LLP (SDCL), see the most compelling opportunities for long-term value. SDCL, which is headquartered in London with a global presence, has nearly two decades of experience investing in energy efficiency and decentralised generation projects across key markets.
The transaction also serves as an important signal to the broader infrastructure investment community. Despite the headwinds facing sellers of private infrastructure assets — including elevated interest rates, tighter credit conditions, and lower transaction volumes — the deal demonstrates that well-managed, yielding energy efficiency portfolios can still attract committed strategic buyers at valuations that, while below book value, are not dramatically distressed.
For SEIT’s shareholders, the months ahead will be defined by the interplay between further balance sheet repair, the trajectory of asset valuations, and the approaching continuation vote. Whether this disposal ultimately proves to be a turning point or merely a step on a longer and more complex journey will depend on management’s ability to execute its remaining strategic priorities under significant time pressure and market uncertainty.
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