RM Infrastructure Inocme (RMII) has published a circular convening a meeting to approve its managed winddown.

In September, the manager’s run-off profile of the portfolio showed a forecasted weighted average remaining life of about 1.7 years from end-October 2023, with a liquidation of the company occurring in the second half of 2027. The manager has since then discussed with the board an incentive structure to accelerate capital repayments. It thinks that the maturity profile of the run-off portfolio could be reduced and the weighted average remaining life reduced to less than one year (as of 31 October 2023). Shareholders would benefit from such acceleration as follows:

• circa £72m of loans returned quicker (about 70% of the loan portfolio);
• potential shorter maturity to December 2026;
• a significant amount of capital returned during 2024;
• a positive net present value to shareholders versus the previous schedule of about £7.5m (assuming a discount rate of 9%); and
• a reduction of forecasted management fees of about £0.77m.

Shareholders would need to approve revisions to the investment objective and policy of the company, and there will be a new objective of an orderly realisation of the assets.

The management fee will continue to be calculated at the rate of 0.875 per cent. of NAV per annum (payable monthly in arrears), but subject to a minimum fee of £33,300 payable monthly in arrears, subject to renegotiation with the board, until the earlier of (i) the company’s liquidation; (ii) the value of the portfolio (excluding cash and other liquid assets) being less than or equal to £35m; or (iii) 31 December 2026.

Dividends will still be paid until the process starts. Thereafter, the company expects not to be able to keep paying dividends at the current rate. The company will instead pay dividends only as required to maintain investment trust status.

RMII : More detail on RM Infrastructure Income winddown proposals