Saba urges Gore Street investors to back wind-up

Saba Capital, which owns about 17% of Gore Street Energy Storage Fund, has called on shareholders to support proposals to wind up the £244 million investment trust and to demand full disclosure of the sale of two Irish battery projects.

In an open letter ahead of Gore Street’s annual general meeting on 16 September, Saba requested the transaction price and documentation for the auction run by adviser Alexa Capital for the Kilmarnock and Mucklagh projects. The assets were sold to GS EU, a vehicle managed by Gore Street Investment Management.

The fund challenged the board’s assurance that the sale price was “at least equal to the assets’ most recently published net asset values,” arguing that comparison is limited because Gore Street has been writing down carrying values across its portfolio.

Saba highlighted recent balance-sheet moves, saying group net asset value fell about 15% in the latest quarter and that NAV is down roughly 27% over the past year. The fund noted Gore Street shares trade at about a 35% discount to the reduced NAV and pointed to weak dividend coverage from operating earnings of around 0.28 times.

Earlier this year Saba approached the board privately twice, first proposing a search for a new investment manager and later criticising the recovery plan published in March. That plan envisaged selling assets and reinvesting proceeds into existing battery-storage projects to try to raise revenue and support a targeted dividend of 7p per share; Saba argued it would not close the trust’s discount to NAV.

The board warned that shareholder approval of a wind-up could force a rapid disposal of assets that might depress prices. Saba countered that approval of its resolutions would leave the board responsible for selecting an appropriate timetable to return capital to investors rather than triggering an immediate distressed sale.

Shareholders will vote on Saba’s proposals and the board’s responses at the AGM on 16 September. The result will determine whether Gore Street continues under its current recovery plan and management or begins steps that could lead to liquidation and capital return to investors.