Foresight Environmental Infrastructure (FGEN ) has sold its entire portfolio of rooftop solar assets for more than £20m, which will be used to reduce its debts.

The £466m investment company, which rebranded from JLEN Environmental Assets in September after surviving a continuation vote, hopes the move will help restore investor confidence.

A difficult year, with interest rates not falling as fast as hoped, was made more challenging last month when the collapse of German green hydrogen developer HH2E wiped out £19.3m of investment and knocked 2.6% off net asset value (NAV).

In its latest transaction, FGEN sold more than 1,000 operational rooftop solar assets to AtmosClear Investments for £21.2m, a modest but unspecified premium to their last valuation. The assets are spread across domestic, commercial and ground installations throughout the country.

FGEN will receive £20.5m on completion with a further £700,000 payable based on post-sale conditions.

The closed-end fund, which invests in multiple renewable technologies, from wind and solar energy to battery storage, waste and hydropower, bought the rooftop portfolio in 2015. It was its only investment in this area and was considered ‘non-core’, although the portfolio still holds 11 ground-mounted solar parks across five investments that make up 13% of the portfolio by value.

The rooftop sale generated an internal rate of return of 4.2% and a multiple on invested capital of 1.3 times and was the second divestment this year following the £68.1m sale of FGEN’s interest in anaerobic digestion assets in August.

The cash raised will further reduce FGEN’s revolving credit facility, which was £113.4m drawn at 30 September.

Chair Ed Warner said the sale provided ‘substantial funds from a non-core, low-yielding asset’.

‘Capital allocation remains a key priority for the board and proceeds will be used to strengthen our balance sheet through a further reduction in debt,’ he said.

There was no mention of share buybacks. The company repurchased £20m of shares following the anaerobic digestion asset sale.

The write-down of HH2E left NAV per share at 109.8p for 30 September, down from 113.6p in June, delivering a flat quarterly total return with a dividend of 0.04%.

At 71.4p, the shares have fallen 30% this year and trail on a 35% discount to NAV, which Deutsche Numis analyst Colette Ord said was a ‘record wide’ with a dividend yield of 10%.

‘Recent results contained lots of additional portfolio data including Ebitda [earnings before interest, tax, depreciation and amortisation], which is commendable and should help investors to scrutinise in more detail the risk-return profile, which differs from a pure-play generator,’ she said.

Although the fund’s outlook is cautious given the macro backdrop, Ord said the portfolio ‘has some organic growth potential as construction assets complete over the next 12 to 24 months’.