Investors in the US Solar Fund (USF ) must sign off a new invesmtent policy if they want experienced Amber Infrastructure to be appointed the new manager. 

In a stock exchange statement published on Tuesday the board of the £150m trust, which has undergone a year-long strategic review, announced proposals to widen the investment policy of the fund. 

Changes would allow the trust to invest up to 15% in late-stage development assets that have planning and grid connection, invest up to 10% in other trusts, as well as removing the minimum power purchase agreement contract length, which currently has a minimum of 10 years.

The board chaired by Gill Nott said the appointment of Amber Infrastructure as new manager was conditional on shareholders approving the change. The group, which manages the £2.2bn infrastructure trust International Public Partnerships (INPP ), intends to buy 5m shares to align with shareholders.

Approval of the proposals would also allow the board to use some excess cash to repay debt, which would leave $18m (£14.8m), which could be repaid to sharehloders. 

However, the amount available to distribute is not fully clear and will be determined by the final transaction costs of repaying debt and planned tax equity repayments, Numis analyst Colette Ord said.

Investors, the largest of which is Liontrust with an 11% stake, will vote on the investment tweaks at the AGM on 17 November in London. 

‘Given the listed fund and infrastructure experience of Amber, we would be optimistic that their appointment will result in at least improved disclosure, and potential for the portfolio mix to be improved over time, given their origination track record,’ Ord said.

If shareholders do not approve the investment policy changes, Amber will not be appointed and the board would continue considering other proposals for the future of the 10%-yielder. However, there is no guarantee that such proposals would deliver a better outcome for shareholders, she added.

Peel Hunt analyst Markuz Jaffe said it was ‘somewhat disappointing’ that after over a year of efforts, the company had failed to solicit a bid worthy of presenting to shareholders publicly, and questioned whether there is further valuation downside risk to come beyond that already reflected in the company’s interim results to end-June 2023.

He added that it was unclear whether the board intend for USF to continue as an ongoing strategy under Amber’s management or if the appointment of Amber is to oversee an orderly disposal of the portfolio and eventual return of capital to shareholders.

‘We would anticipate at least some level of pushback from shareholders if the former,’ he said.

The shares slumped 4% to 53 cents on Tuesday, a 38% discount to the June net asset value of 85.5 cents per share.