Dear 12J Solar Investors,
We have received several enquiries regarding the process and timing of investor exits from the 12J Fund. As communicated in our newsletter at the end of last year, we are actively working on a strategy to facilitate investor exits while balancing the final phase of capital deployment up to 30 June 2026, together with the ongoing management of the solar portfolio.
As a reminder, 12J shareholders remain free to sell their shares at any time. In practice, however, the secondary market for 12J shares is limited, primarily because its an unlisted share and a new purchaser does not benefit from the original tax deduction associated with the original 12J investment. The most practical way to facilitate investor exits is therefore for Futureneers Capital to repurchase investor shares, funded through the refinancing of the underlying solar assets.
We are actively working on this process and expect to provide more detailed feedback on the proposed exit framework by the end of May, as most investors’ five-year holding period concludes in June 2026, although we do recognise that some investors have already reached their initial five-year holding period at the end of February 2026.
Our intention remains to create sufficient funding to enable investor exits as efficiently as possible. However, based on the refinancing discussions currently underway and the legal matter described below, it is becoming more likely that share repurchases will take place progressively as refinancing transactions are concluded and value is realised from certain assets that may not be refinanced as part of a single transaction.
Importantly our objective remains to repurchase investor shares at the capital value invested less the upfront fees paid at inception (being the original targets), unless there is a permanent devaluation in certain assets. The practical implication is simply that capital may be returned in a number of instalments rather than through a single payment, and we therefore encourage investors to take this into account in their cash planning over the coming period.
Feedback on current portfolio and legal issue
Operationally, the majority of the solar portfolio continues to perform well and largely in line with expectations. The only material matter relates to a dispute with a landlord concerning two major sites (potentially a third) where our preferential supply rights are being challenged. In short, the landlord has challenged our preferential generation agreement and installed its own solar generation within the business park, which has resulted in a material reduction in energy production from our plants and consequently a material reduction in project income.
As an absolute last resort, legal proceedings have been instituted by Futureneers against the landlord and the matter has progressed to a stage where arbitration proceedings may follow. These assets represent meaningful value within the portfolio, and the outcome of the legal process will determine the extent to which full value can be realised. For obvious reasons, these assets are currently not re-financeable until the legal proceedings have been resolved. We will continue to keep investors informed as this matter progresses.
Next Steps
While the exit process may therefore unfold over a slightly longer period than originally anticipated, our focus remains on protecting investor capital and implementing an exit strategy that preserves value for investors. We kindly ask for your continued patience and will provide a further update on the legal matter and the proposed exit process and strategy around May 2026.
We appreciate your continued support and patience as we work through the final phase of the investment and implement the exit strategy.
Kind regards,
Jaco, Deon and the Futureneers Team