UPDATE: Saba denies blame for Gore Street German asset sale failure
Saba Capital Management LP on Thursday denied it was to blame for the failed sale of Gore Street Energy Storage Fund PLC's German assets.
Earlier on Thursday, Gore Street Energy said it had halted the sale of its project in Cremzow, Germany, after the prospective buyer significantly lowered its offer despite the transaction being at an advanced stage.
The energy storage fund, which holds assets across the UK, Ireland, Western Europe and the US, said the revised offer did not represent fair value for shareholders and that it would re-engage with other potentially interested parties.
Gore Street Energy said the reduction was not driven by market conditions, noting that the asset generated revenue of £17.19 per megawatt-hour in the first quarter. Instead, it blamed resolutions requisitioned by Saba, which it said had created "uncertainty" over Gore Street Energy's future.
New York-based Saba, which holds an 18% stake in Gore Street Energy, had previously proposed resolutions 16 and 17 calling for the company to wind down as an investment company. The resolutions are due to be put to shareholders at Gore Street Energy's annual general meeting on Wednesday next week.
On Thursday, Saba urged shareholders to vote in favour of its resolutions and said it would vote against the chair election at the general annual meeting, on the grounds that the chair failed to take accountability for the stalled sale. It invited shareholders to do the same.
Saba said the sale of the German asset was scheduled for June, while its resolutions were made public on July 30. It noted Gore Street Energy had revalued the asset and raised the discount rate, which analysts put at around half.
Saba said: "Two months later the board says a buyer cutting its price has no obvious market rationale. Its own accounts said otherwise." It added: "Shareholders are being asked to believe that a buyer in a competitive process, for an asset the board says is trading well, has materially cut its price because of a pending shareholder vote. If it truly did, the problem is the process, not the vote."
On Thursday, Gore Street Energy urged shareholders to vote against the resolutions, noting that its position was supported by two UK advisory bodies, ISS Corporate Solutions Inc and Pensions & Investment Research Consultants Ltd.
Shares in Gore Street Energy were up 0.3% at 47.40 pence on Thursday afternoon in London.
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