Following the Annual General Meeting of abrdn European Logistics Income plc ("ASLI" or the "Company"), we wish to set out our position regarding the management of the Company and the execution of its wind-down strategy. As a matter of principle, we support the Company's wind-down strategy, as it reflects the wishes expressed by the majority of shareholders. However, while we support the strategy itself, we have serious concerns regarding the manner in which it has been implemented and managed.
In particular, we are dissatisfied with:
- the repeated failure to meet publicly communicated timelines and milestones;
- the lack of transparent communication regarding the disposal of assets;
- the absence of adequate disclosure concerning the identity of purchasers, transaction values and material terms of asset sales;
- the disposal of assets at values that appear inconsistent with prevailing market valuations; and
- the lack of comprehensive reporting showing the relationship between acquisition cost, current market value and ultimate disposal price of assets sold.
In our view, such practices fall short of the standards of transparency, accountability and corporate governance that investors should reasonably expect from a publicly listed company.
We are also concerned that the current management structure and associated remuneration arrangements have been largely maintained despite the Company's ongoing asset realisation programme and the advanced stage of the wind-down strategy. The failure to implement meaningful cost reductions during this period continues to impose unnecessary costs on shareholders and diminishes the amount of capital ultimately available for distribution.
Furthermore, we note with particular concern:
- the absence of any meaningful consideration or presentation of alternatives that could preserve shareholder value while achieving the Company's stated objectives;
- the failure to provide a substantive response to our proposal regarding the acquisition and continuation of the Company's listed shell structure; and
- the lack of visible initiatives aimed at reducing the costs associated with the implementation of the wind-down strategy.
In our opinion, disregarding solutions that could reduce costs and preserve greater value for shareholders risks causing an unnecessary erosion of shareholder returns.
Accordingly, we expect the Board and the Manager to provide:
- a full explanation of the asset disposal process and the methodology applied in evaluating and approving transactions;
- a detailed timetable for the remaining stages of the wind-down strategy;
- clear disclosure of the measures being implemented to optimise and reduce costs;
- comprehensive reporting on the relationship between acquisition values, current market values and disposal prices of realised assets; and
- a clear plan demonstrating how the Company intends to maximise value returned to shareholders.
We further expect immediate action to align the Company's governance and cost structure with its current stage of operation. The interests of shareholders must remain the primary consideration in all decisions relating to the implementation of the wind-down strategy and the return of capital to investors.
We will continue to monitor developments closely and reserve all rights available to us as shareholders to protect shareholder interests and ensure that appropriate standards of governance, transparency and accountability are maintained throughout the remainder of the wind-down strategy.
