Recommended Proposals for the Reconstruction and Winding Up of the Company and Notices of General Meetings

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1 THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. IT CONTAINS PROPOSALS RELATING TO THE MEMBERS VOLUNTARY WINDING-UP AND SCHEME OF RECONSTRUCTION OF ECOFIN WATER & POWER OPPORTUNITIES PLC ON WHICH YOU ARE BEING ASKED TO VOTE. If you are in any doubt as to the action you should take, you are recommended immediately to seek your own personal financial advice from an appropriately qualified independent adviser authorised under the Financial Services and Markets Act 2000 (FSMA). If you have sold or otherwise transferred all of your Shares in Ecofin Water & Power Opportunities plc (the Company), please forward this document, together with the accompanying documents (but not the accompanying personalised Forms of Election and Forms of Proxy), as soon as possible to the purchaser or transferee or to the stockbroker, bank or other agent through whom the sale or transfer was effected, for onward transmission to the purchaser or transferee. However, neither the Ecofin Global Prospectus, nor the Supplementary Prospectus thereto, nor the EF Realisation Prospectus should be forwarded to or transmitted in or into the United States, Australia, Canada, Japan, New Zealand or the Republic of South Africa or into any other jurisdictions if to do so would constitute a violation of the relevant laws and regulations in such other jurisdictions. Shareholders who are resident in, or citizens of, territories outside the United Kingdom and the Channel Islands should read the section headed Overseas Shareholders in Part I of this document. Winterflood Securities Limited which is authorised and regulated by the Financial Conduct Authority, acting through its division, Winterflood Investment Trusts (Winterflood), is acting for the Company and no one else in connection with the Reconstruction Proposals. Winterflood is not advising any other person or treating any other person as its clients, including any recipient of this document, and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Winterflood nor for providing advice in connection with the Reconstruction Proposals, the contents of this document and the accompanying documents or any other matter referred to herein or therein. The definitions used in this document are set out on pages 50 to 56. Ecofin Water & Power Opportunities plc (Registered in England & Wales with registered number and registered as an investment company under section 833 of the Companies Act 2006) Recommended Proposals for the Reconstruction and Winding Up of the Company and Notices of General Meetings This document should be read in conjunction with the accompanying Ecofin Global Prospectus relating to Ecofin Global Utilities and Infrastructure Trust plc (Ecofin Global) and the Supplementary Prospectus thereto, and the accompanying EF Realisation Prospectus relating to EF Realisation Company Limited (EF Realisation), each of which has been prepared in accordance with the Prospectus Rules, approved by the Financial Conduct Authority in accordance with section 73A of FSMA, and made available to the public in accordance with the Prospectus Rules. In relation to each of Ecofin Global and EF Realisation, this document is an advertisement and not a prospectus and does not constitute an offer of any securities for sale or subscription. Investors should not subscribe for the Ecofin Global Shares and/or the EF Realisation Shares referred to in this document except on the basis of information provided in the Ecofin Global Prospectus, the Supplementary Prospectus thereto, and the EF Realisation Prospectus, respectively. A copy of each of the Ecofin Global Prospectus, the Supplementary Prospectus thereto, and the EF Realisation Prospectus is enclosed unless the recipient is a Restricted Shareholder. The Reconstruction Proposals described in this document are conditional, inter alia, on Shareholder approval. Your attention is drawn to the letter from the Chairman of the Company set out in Part I of this document which contains the recommendation of the Directors that Shareholders should vote in favour of the EWPO Scheme Resolutions which are to be proposed at the General Meetings of the Company referred to below. A first general meeting of the Company (the First General Meeting) will be held at a.m. on 13 September 2016 to consider and, if thought fit, approve the EWPO Scheme. A second general meeting of the Company (the Second General Meeting) will be held at a.m. on 21 September 2016 to place the Company into members voluntary liquidation and appoint the Liquidators. Notices of the General Meetings are set out at the end of this document. Each of the General Meetings will be held at the offices of Norton Rose Fulbright LLP, 3 More London Riverside, London SE1 2AQ. Shareholders are requested to return the Forms of Proxy accompanying this document for use at the General Meetings. To be valid, the Forms of Proxy must be completed and returned to the Registrars, Capita Asset Services, PXS 1, 34 Beckenham Road, Beckenham, Kent BR3 4ZF as soon as possible and in any event by no later than a.m. on 9 September 2016 in respect of the First General Meeting and by no later than a.m. on 19 September 2016 in respect of the Second General Meeting. A reply-paid envelope is enclosed with this document for your convenience. Alternatively, a

2 proxy may be appointed online at provided that such appointment must be made by no later than a.m. on 9 September 2016 in respect of the First General Meeting and by no later than a.m. on 19 September 2016 in respect of the Second General Meeting. CREST members who wish to appoint a proxy for the General Meetings through the CREST electronic proxy appointment service are referred to Note 6 to the Notice of First General Meeting and Note 6 to the Notice of the Second General Meeting. Completion and return of a Form of Proxy (including online) or the giving of a CREST Proxy Instruction will not preclude a Shareholder from attending the General Meetings in person if he or she so wishes. Proxies submitted via CREST for the General Meetings must be transmitted so as to be received by Capita Asset Services by no later than 48 hours (excluding non-working days) before the time of the relevant General Meeting or (as the case may be) the adjourned meeting. Shareholders who hold their Shares in certificated form (that is, not in CREST) will also find enclosed with this document a personalised Form of Election for use in relation to the EWPO Scheme. To be valid, Forms of Election must be completed and returned, using the enclosed reply-paid envelope, by post to Capita Asset Services or by hand (during normal business hours) to Capita Asset Services, Corporate Actions, 34 Beckenham Road, Beckenham, Kent BR3 4TU, as soon as possible but in any event so as to be received by no later than 1.00 p.m. on 9 September Shareholders who hold their Shares in uncertificated form (that is, in CREST) will not receive a Form of Election for the Cash Exit and, to make an Election under the EWPO Scheme, should elect in accordance with the procedures set out in the section headed Action for holders of Shares in uncertificated form, which can be found in Part II of this document. All Elections will be irrevocable without the consent of the Directors. If you do not return a Form of Election for the Cash Exit or you return of a Form of Election for the Cash Exit which is not validly completed (or, in the case of Shareholders who hold their Shares in uncertificated form, you do not send a valid TTE Instruction), you will receive Ecofin Global Shares and EF Realisation Shares under the EWPO Scheme in respect of your entire holding of Shares. Accordingly, a Shareholder should only submit a Form of Election (or, if the relevant Shares are held in CREST, send a TTE Instruction) if he or she wishes to elect for the Cash Exit for all or part of his/her holding of Shares and need not submit a Form of Election if he/she wishes to receive Ecofin Global Shares and EF Realisation Shares under the EWPO Scheme in respect of their entire holding of Shares. Your attention is drawn to the section entitled Action to be taken in Part I of this document. This document should be read as a whole. Your attention is drawn to the letter from the Chairman of the Company set out in Part I of this document. 2

3 CONTENTS Page Key Features of the EWPO Scheme 4 Risk Factors 6 Action to be taken by Shareholders 8 Expected Timetable 9 Part I Letter from the Chairman 10 Part II Details of the EWPO Scheme 19 Part III The EWPO Scheme 27 Part IV The Rollover Vehicles 36 Part V Additional Information 45 Definitions 50 Notice of the First General Meeting 57 Notice of the Second General Meeting 62 3

4 KEY FEATURES OF THE EWPO SCHEME Background The Board, having consulted with EWPO Shareholders, believes that, in order to create an investment company that is appealing to investors and is likely to trade at a more attractive rating than EWPO does at present, it is important to separate the liquid assets from the illiquid assets currently held by EWPO and to create a vehicle with a refined investment policy, a simplified capital structure and an attractive yield with the illiquid investments being held in a separate vehicle to be realised over time. The EWPO Scheme will result in the creation of two new entities: Ecofin Global, a newly incorporated investment trust that will hold the liquid assets of EWPO and will invest in listed global utilities and infrastructure equities and may hold, to a limited extent, related fixed-income securities. EF Realisation, a newly incorporated Guernsey closed-ended investment company that will hold the illiquid assets currently owned by EWPO and will seek to realise them over an expected period of up to two years. The EWPO Scheme also provides the opportunity for Shareholders to realise a proportion of their holding for cash in lieu of receiving Ecofin Global Shares. Key features The key features of the EWPO Scheme are: Shareholders will receive shares in Ecofin Global on the basis of one Ecofin Global Share for every Share held in EWPO, subject to any Elections made and accepted for the Cash Exit. The Cash Exit will provide an opportunity for Shareholders to realise part of their investment in EWPO for cash in lieu of receiving Ecofin Global Shares. The Cash Exit will be capped at 50 per cent. of EWPO s net assets less the costs of the Reconstruction Proposals (please note that the level of Cash Exit being offered to Shareholders has increased from the 35 per cent. Cash Exit announced previously further details are set out in the Letter from the Chairman below). The Basic Entitlement under the Cash Exit enables Shareholders to realise up to 50 per cent. by value of their shareholding. Shareholders may elect for more than their Basic Entitlement under the Cash Exit, but Elections in excess of the Basic Entitlement will only be satisfied to the extent that other Shareholders elect for less than their Basic Entitlement or not at all. Shareholders will also receive shares in EF Realisation on the basis of one EF Realisation Share for every four Shares held in EWPO (with fractional entitlements rounded down to the nearest whole number) whether or not they make an Election for the Cash Exit. The issue of EF Realisation Shares to all Shareholders ensures equitable treatment in relation to EWPO s illiquid assets as Elections for the Cash Exit will not result in Shareholders who chose not to avail themselves of the Cash Exit having an increased exposure to the illiquid assets. Based on the estimates and figures set out in Part I of this document and for illustrative purposes only, had the calculation date for the EWPO Scheme been 17 August 2016 (being the latest practicable date prior to the publication of this document), for every 100 Shares held, a Shareholder will receive securities and/or cash with a total value on the calculation date of as follows: 25 EF Realisation Shares with a net asset value of 83.41p per EF Realisation Share; up to 100 Ecofin Global Shares (subject to the level of Elections for the Cash Exit made and accepted) with a net asset value of p per Ecofin Global Share; with the option to receive p per Share in cash, in lieu of receiving Ecofin Global Shares on a one for one basis, for up to or such greater amount subject to scaling back of Excess Elections. 4

5 The EWPO Scheme is conditional, amongst other things, on Shareholder approval being given at the First and Second General Meetings, notices of which are set out at the end of this document. Full details of the action to be taken by Shareholders are set out in Parts I and II of this document and in the instructions on the Forms of Proxy and the Form of Election. 5

6 RISK FACTORS The risks referred to in this section are the material risks known to the Directors as at the date of this document which the Directors believe Shareholders should consider prior to deciding how to cast their votes on the EWPO Scheme Resolutions to be proposed at the General Meetings and whether (and if so, on what basis) to make an Election for the Cash Exit. Shareholders who are in any doubt about the action they should take should consult their stockbroker, bank manager, solicitor, accountant or other financial adviser authorised under the Financial Services and Markets Act RISKS ASSOCIATED WITH THE EWPO SCHEME Implementation of the EWPO Scheme is conditional, inter alia, upon the EWPO Scheme Resolutions being passed at the General Meetings. In the event that any of the EWPO Scheme Resolutions to be proposed at the General Meetings is not passed, or any other condition of the EWPO Scheme is not met, the EWPO Scheme will not be implemented. If the EWPO Scheme is not implemented, the Directors will consider the most appropriate course of action for the Company at that time. There may be no certainty under any new proposals formulated by the Directors as to the realisation value of a Shareholder s investment in the Company or the timing of distributions to Shareholders, and such proposals may not provide for a tax efficient roll-over alternative for Shareholders. The maximum amount of cash that will be paid to all Shareholders who elect for the Cash Exit will be, in aggregate, an amount equal to 50 per cent. of the net asset value of the Company less the costs of the Reconstruction Proposals. If the aggregate Elections for the Cash Exit would, based on the Residual Net Asset Value per Share as at the Calculation Date, exceed this maximum amount, then Elections for the Cash Exit in excess of a Shareholder s Basic Entitlement will be scaled back and to the extent they are scaled back such Shareholders will receive Ecofin Global Shares, in addition to EF Realisation Shares, in accordance with the EWPO Scheme. This may result in Shareholders receiving less cash than they elect for. RISKS ASSOCIATED WITH THE ROLLOVER VEHICLES An investment in Ecofin Global and EF Realisation will involve exposure to those risks normally associated with investments in stocks and shares. As such, the price of their shares can go down as well as up and an investor may not get back the full amount invested. There is no assurance that the investment objective of Ecofin Global or EF Realisation will actually be achieved or provide the returns sought by them. The market price of Ecofin Global Shares and/or EF Realisation Shares may not fully reflect their underlying net asset value. Any investment in the Rollover Vehicles will be governed by the Ecofin Global Prospectus, the Supplementary Prospectus thereto, and the EF Realisation Prospectus which accompany this document. Accordingly, Shareholders should read the Ecofin Global Prospectus, the Supplementary Prospectus thereto, and the EF Realisation Prospectus, including the risk factors contained therein, prior to deciding how to cast their votes on the EWPO Scheme and whether or not (and to what extent) they wish to make an Election for the Cash Exit. Discounts The price of shares in an investment trust is determined by the interaction of supply and demand for such shares in the market as well as by the net asset value per share. The share price can therefore fluctuate and may represent a discount or premium to net asset value per Ecofin Global Share or EF Realisation Share, as applicable. This discount or premium is itself variable as conditions for supply and demand for Ecofin Global Shares or EF Realisation Shares change. This can mean that the Ecofin Global Share price or the EF Realisation Share price can fall when the net asset value per share rises, or vice versa. Liquidity Ecofin Global and EF Realisation are closed-ended vehicles. Accordingly, Shareholders will have no right to have their Ecofin Global Shares or EF Realisation Shares repurchased at any time. Shareholders wishing to realise their investment in Ecofin Global or EF Realisation may therefore be required to dispose of their Ecofin Global Shares or EF Realisation Shares in the market. There can 6

7 be no guarantee that a liquid market in the Ecofin Global Shares or the EF Realisation Shares will exist or be maintained. Accordingly, Shareholders may be unable to realise their Ecofin Global Shares or EF Realisation Shares at the quoted market price (or at the prevailing net asset value per Ecofin Global Share or net asset value per EF Realisation Share). TAXATION Representations in this document concerning the taxation of Shareholders are based on current law and practice, which are subject to change. The information in this document relating to taxation law and practice is given by way of general summary and does not constitute legal or tax advice to Shareholders. The Board has been advised that the EWPO Scheme should be treated as a scheme of reconstruction for the purposes of UK taxation of capital gains. Prior to the Board s decision to increase the level of the Cash Exit to 50 per cent. of the Company s nets assets less the cost of the Reconstruction Proposals, clearance was granted by HMRC under section 138 of the TCGA that section 136 of the TCGA will not be prevented from applying to the EWPO Scheme by virtue of section 137 of the TCGA and that no notice under section 698 of the Income Tax Act 2007 (cancellation of tax advantages from certain transactions in securities) ought to be given in respect of that version of the EWPO Scheme. Subsequent to the receipt of that clearance, the Board has decided to increase the level of the Cash Exit to 50 per cent. of the Company s net assets less the cost of the Reconstruction Proposals. Accordingly, in respect of the updated EWPO Scheme, clearance has been applied for (but not yet received) from HMRC pursuant to section 138 of the TCGA for confirmation that section 137 of the TCGA will not apply so as to result in the exchange of Shares for Ecofin Global Shares and EF Realisation Shares giving rise to a disposal of the Shares for the purposes of taxation of chargeable gains and that section 698 of the Income Tax Act 2007 should not apply to the updated EWPO Scheme. Receipt of cash pursuant to an Election for the Cash Exit or a subsequent disposal of Ecofin Global Shares or EF Realisation Shares will constitute a disposal for tax purposes and may, depending on a Shareholder s particular circumstances, give rise to a liability to UK taxation of capital gains. The Directors have been advised that the manner in which it is proposed to carry out the Company s liquidation and to implement the EWPO Scheme is such that the Company should remain eligible to retain approval as an investment trust for the accounting period which includes the date on which the Company s assets in the Rollover Funds are transferred to the Rollover Vehicles pursuant to the Transfer Agreements and the period during which the Company s assets in the Cash Fund and the Liquidation Fund are expected to be realised. Accordingly, the transfer of the Company s assets in the Rollover Funds and the realisation of the Company s assets comprised in the Cash Fund and the Liquidation Fund under the EWPO Scheme should not give rise to a liability to UK taxation of chargeable gains for the Company. However, there can be no absolute assurance that investment trust status will be preserved and the absence of such status in any accounting period would mean the Company would be liable to pay UK taxation on its net capital gains in that period. 7

8 ACTION TO BE TAKEN BY SHAREHOLDERS Full details of the action to be taken by Shareholders are set out in Parts I and II of this document and in the instructions on the Forms of Proxy and the Form of Election. The attention of Overseas Holders is drawn to the section headed Overseas Holders in Part I of this document. TO VOTE ON THE PROPOSALS To vote on the EWPO Scheme Complete and return the blue Form of Proxy for the First General Meeting so as to be received as soon as possible, but in any event by no later than a.m. on 9 September 2016, being 48 hours (excluding non-working days) before the time of the First General Meeting and/or attend and vote at the First General Meeting at a.m. on 13 September AND Complete and return the pink Form of Proxy for the Second General Meeting so as to be received as soon as possible, but in any event by no later than a.m. on 19 September 2016, being 48 hours (excluding non-working days) before the time of the Second General Meeting and/or attend and vote at the Second General Meeting at a.m. on 21 September TO MAKE AN ELECTION To elect for the Cash Exit If you hold your Shares in certificated form (that is, not in CREST) you MUST complete the Form of Election (in particular by inserting the relevant number of Shares in Box 2 for which you wish to make an Election for the Cash Exit) and sign and return it (together with the relevant share certificate(s) and/or document(s) of title) so as to be received as soon as possible, but in any event by no later than 1.00 p.m. on 9 September If you hold your Shares in uncertificated form (that is, in CREST) you must send a TTE Instruction in respect of any Shares for which you wish to make an Election for the Cash Exit by no later than 1.00 p.m. on 9 September If you have any questions relating to completion and return of your Forms of Proxy and/or the Form of Election, please contact Capita Asset Services on Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. The helpline is open between 9.00 a.m p.m., Monday to Friday excluding public holidays in England and Wales. Please note that Capita Asset Services cannot provide any financial, legal or tax advice and calls may be recorded and monitored for security and training purposes. 8

9 EXPECTED TIMETABLE Latest time and date for receipt of Forms of Proxy or CREST Proxy Instructions from Shareholders in respect of the First General Meeting Latest time and date for receipt of Forms of Election or TTE Instructions from Shareholders First General Meeting Shares disabled in CREST (1) Record Date Calculation Date Date from which it is advised that dealings in the Shares should only be for cash settlement and immediate delivery of documents of title Latest time and date for receipt of Forms of Proxy or CREST Proxy Instructions from Shareholders in respect of the Second General Meeting a.m. on 9 September 1.00 p.m. on 9 September a.m. on 13 September 6.00 p.m. on 13 September 6.00 p.m. on 13 September 6.00 p.m. on 13 September 14 September a.m. on 19 September Announcement of the Cash Fund Cap and the number of Shares 19 September 2016 to be reclassified as Shares with A rights and Shares with B rights Ordinary Shares reclassified as Reclassified Shares in the Official List and dealings in Reclassified Shares commence (2) Suspension of listing of Reclassified Shares and Company s Register closes Second General Meeting EWPO Scheme Effective Date and Transfer Agreements executed and implemented CREST accounts credited with Ecofin Global Shares and EF Realisation Shares Cheques expected to be despatched and CREST payments made to Shareholders in respect of Elections for the Cash Exit Certificates despatched in respect of the Ecofin Global Shares and the EF Realisation Shares held in certificated form Cancellation of listing of Reclassified Shares on the Official List (2) 8.00 a.m. on 20 September 7.30 a.m. on 21 September a.m. on 21 September (1) For the avoidance of doubt the Company s Register will remain open until the EWPO Scheme Effective Date. 26 September 26 September week commencing 3 October week commencing 3 October by 31 October (2) Reclassified Shares are a technical requirement of the EWPO Scheme and will be created if the resolutions to be proposed at the First General Meeting are passed and become effective. Each of the times and dates in the expected timetable may (where permitted by law) be extended or brought forward without further notice. If any of the above times and/or dates change, the revised time(s) and/or date(s) will be notified to Shareholders by an announcement through a Regulatory Information Service. All references to times in this document are to London time. 9

10 Directors: Ian Barby (Chairman) Iain McLaren Lord Myners Martin Nègre David Simpson To Shareholders PART I LETTER FROM THE CHAIRMAN Ecofin Water & Power Opportunities plc (Registered in England & Wales with registered number and registered as an investment company under section 833 of the Companies Act 2006) Registered Office: 10 Harewood Avenue London NW1 6AA 22 August 2016 Recommended proposals for the reconstruction and winding up of the Company Background to the Reconstruction Proposals On 19 February 2016, the Company announced that, in advance of the Continuation Vote, the Board would be considering the structure of the Company going forward including its investment policy, capital structure and levels of gearing. The Board set out the reconstruction proposals it would implement in the event that the Continuation Vote was passed (the Reconstruction Proposals) in an announcement on 23 May 2016 and, further, in a continuation vote circular published by the Company on 31 May 2016 (the Continuation Vote Circular). The Continuation Vote Circular set out the Company s intention, if the Continuation Vote was passed, to propose a scheme of reconstruction under s110 of the Insolvency Act 1986 (as amended) with Shareholders being: (i) (ii) (iii) issued with shares in Ecofin Global Utilities and Infrastructure Trust plc (Ecofin Global), a newly incorporated investment trust that would invest in listed global utilities and infrastructure equities and which additionally may hold, to a limited extent, related fixed-income securities (adjusted for any Elections made and accepted for the Cash Exit); issued with shares in EF Realisation Company Limited (EF Realisation), a newly incorporated Guernsey closed-ended investment company that would hold the illiquid assets currently owned by Company; and offered a cash exit for up to 35 per cent. of the Company s net assets less the costs of the Reconstruction Proposals. The Continuation Vote was passed at a general meeting of the Company held on 24 June 2016 and accordingly the Company is now seeking to implement the EWPO Scheme, save that the Board has decided to increase the level of Cash Exit offered to Shareholders to 50 per cent. of the Company s net assets less the cost of the Reconstruction Proposals for the reasons set out in the section titled The EWPO Scheme below. This document explains and provides information on the proposed scheme of reconstruction of the Company (the EWPO Scheme) and the actions required to be taken in order for the EWPO Scheme to be implemented. It also convenes the general meetings of Shareholders to approve the EWPO Scheme. Shareholders approval is required to implement the EWPO Scheme which will necessitate the reclassification of the Shares to give effect to Elections for the Cash Exit, the voluntary winding-up of the Company and the appointment of the Liquidators. Further details of the General Meetings are set out in the section entitled General Meetings in this Part I and in Part II below. Notices of the General Meetings are set out at the end of this document. The Continuation Vote Circular also stated that the Company expected to be able to offer the opportunity for ZDP Shareholders to roll over their investment in ZDP Shares into Ecofin Global Shares pursuant to a separate scheme of reconstruction which would be undertaken by EW&PO Finance plc, 10

11 the wholly-owned subsidiary of the Company that is the issuer of the ZDP Shares (the Subsidiary Scheme). A separate circular was sent to ZDP Shareholders on 6 July 2016 (the Subsidiary Scheme Circular) in relation to the Subsidiary Scheme and the resolutions to approve the Subsidiary Scheme were passed at a separate class meeting of the ZDP Shareholders held on 22 July 2016 and at two general meetings of the Subsidiary held on 22 July 2016 and 29 July 2016 respectively. Summary details of the Subsidiary Scheme are set out below. Subject to Shareholder approval and the satisfaction of certain other conditions, the EWPO Scheme is expected to become effective on 26 September The EWPO Scheme Under the EWPO Scheme, Shareholders will receive shares in Ecofin Global, a newly incorporated investment trust that will invest in listed global utilities and infrastructure equities and which additionally may hold, to a limited extent, related fixed-income securities, on the basis of one Ecofin Global Share for every Share held in the Company, subject to any Elections made and accepted for the Cash Exit. The Cash Exit will provide an opportunity for Shareholders to realise part of their investment in the Company for cash, in lieu of receiving Ecofin Global Shares. The level of the Cash Exit will be subject to scaling back as described in Part II of this document. At the time of the Continuation Vote, the Board proposed to offer Shareholders a cash exit for up to 35 per cent. of the net assets of the Company less the cost of the Reconstruction Proposals, which was based on the Company s NAV at that time and was designed to reflect an appropriate balance between providing an exit for those Shareholders seeking to realise their holdings and maintaining sufficient scale within Ecofin Global post the implementation of the EWPO Scheme. As announced on 12 August 2016 since the Continuation Vote Circular was published, the Board has noted that the Company s net assets have increased and a number of ZDP Shareholders have elected to roll over their holdings into Ecofin Global. Taking all of these elements into account the Board decided to increase the level of cash exit offered to Shareholders from 35 per cent. to 50 per cent. This will provide those Shareholders seeking a cash exit a greater opportunity to realise their holdings, while still retaining sufficient assets within Ecofin Global for it to remain relevant to investors. Shareholders will also receive shares in EF Realisation, a newly incorporated Guernsey closed-ended investment company that will hold the illiquid assets currently owned by the Company, on the basis of one EF Realisation Share for every four Shares held in the Company (with fractional entitlements rounded down to the nearest whole number). Details of Ecofin Global and EF Realisation are set out below under the heading The Rollover Vehicles and in Part IV of this document. Overseas Shareholders are referred to the section below in this Part I headed Overseas Shareholders. Further information on the entitlements of Shareholders under the EWPO Scheme, including the basis on which Elections for the Cash Exit may be subject to scaling back and the basis on which the amount payable in respect of any Shares for which an Election for the Cash Exit has been made and accepted will be determined and paid, are set out below in this Part I and in Part II under the sections headed Shareholder Entitlements. To enable the roll-over of Shareholders investments in the Company into Ecofin Global Shares and EF Realisation Shares in a tax efficient manner, the EWPO Scheme will be effected through a scheme of reconstruction and winding-up of the Company. Details on how the EWPO Scheme will be implemented are set out in Part II of this document under the section headed Implementation of the EWPO Scheme. In order to consider and approve the EWPO Scheme, general meetings have been convened for 13 September 2016 (the First General Meeting) and 21 September 2016 (the Second General Meeting). The purpose of this document is to provide you with details of the EWPO Scheme and the reasons why the Directors recommend that you vote in favour of the EWPO Scheme Resolutions to be proposed at the General Meetings. 11

12 The EWPO Scheme Resolutions to be proposed at the General Meetings, on which all Shareholders may vote, are required to obtain certain Shareholder authorities in accordance with the Companies Act 2006, the Insolvency Act 1986, as amended, and the Listing Rules, as follows: (i) (ii) at the First General Meeting, amongst other things: (a) to approve the terms of the EWPO Scheme set out in Part III of this document; (b) to amend the Articles of Association to give effect to the EWPO Scheme; and (c) to authorise the Liquidators to enter into and give effect to the Transfer Agreements with each of Ecofin Global and EF Realisation, to distribute Ecofin Global Shares and EF Realisation Shares to Shareholders in accordance with the EWPO Scheme, to purchase the interests of any Dissenting Shareholders to the EWPO Scheme and to authorise the Liquidators to apply for and cancel the listing of the Shares, with effect from such date as the Liquidators may determine; and at the Second General Meeting, among other things, to appoint the Liquidators and to wind-up the Company. The EWPO Scheme is conditional, amongst other things, on those Shareholder approvals being given at the General Meetings. Notices of the First General Meeting and the Second General Meeting are set out at the end of this document. The Subsidiary Scheme Under the terms of the Subsidiary Scheme, which became effective on 1 August 2016, ZDP Shareholders were given the opportunity to roll over all or part of their investment in ZDP Shares into Ecofin Global Shares. To the extent that ZDP Shareholders have elected to roll over their investment in ZDP Shares, they will be issued new shares in Ecofin Global and Ecofin Global s net assets will be larger than they would otherwise have been. Those ZDP Shareholders who have elected to roll over their investment pursuant to the Subsidiary Scheme will have the value attributable to their holdings of ZDP Shares as at 31 July 2016 (being 8.1 million, the amount equal to the Final Capital Entitlement for each ZDP Share in respect of which an Election for the ZDP Rollover Option has been made and accepted) rolled over into Ecofin Global Shares at the Ecofin Global Issue Price on the EWPO Scheme Effective Date. The Ecofin Global Issue Price at which Ecofin Global Shares will be issued will equal the Residual Net Asset Value per Share calculated as at the Calculation Date. The issue of Ecofin Global Shares to Qualifying ZDP Shareholders who have made an election under the ZDP Rollover Option will only become effective if the EWPO Scheme itself becomes unconditional and effective in accordance with its terms. In the event that the EWPO Scheme does not become effective, the ZDP Rollover Option under the Subsidiary Scheme will not be implemented. In these circumstances, Qualifying ZDP Shareholders who have made an election for the ZDP Rollover Option will instead receive the Final Capital Entitlement in respect of their entire holding of ZDP Shares. Benefits of the EWPO Scheme The Directors consider that the EWPO Scheme should have the following benefits for Shareholders as compared to their current position: The liquid assets currently within the Company s portfolio will be transferred to Ecofin Global, providing Shareholders with: (i) exposure to a portfolio of listed, liquid investments in the global utilities and infrastructure sectors that will not be co-joined with the illiquid assets currently held by the Company; (ii) shares in a company with a simple capital structure consisting of only ordinary shares and flexible bank debt; (iii) an attractive dividend yield at a time of record low interest rates; and (iv) shares in a company that the EWPO Board believes will trade at a more attractive rating than the Company; The illiquid assets, including the Lonestar Investment, currently within the Company s portfolio will be transferred to EF Realisation providing all Shareholders with: (i) a separate realisation vehicle for the illiquid investments currently held by the Company; and (ii) cash from any disposal of the illiquid assets achieved by the Investment Manager over the expected realisation period of up to two years; and Shareholders are provided with the opportunity to exit a proportion of their holding (up to 50 per cent. or a greater amount, subject to the level of Elections for the Cash Exit) for cash, in lieu of receiving Ecofin Global Shares. 12

13 The Directors also consider that Shareholders will not suffer the full dealing costs that would be incurred on the realisation of the Company s portfolio in the event of a simple winding-up. Shareholders who are in any doubt as to the contents of this document or as to the action to be taken should immediately seek their own personal financial advice from an appropriately qualified independent adviser authorised pursuant to FSMA. Conditions to the EWPO Scheme The EWPO Scheme is conditional, amongst other things, upon: (i) (ii) (iii) (iv) the passing of all the EWPO Scheme Resolutions to be proposed at: (a) the First General Meeting; and (b) the Second General Meeting (or, in each case, any adjournment thereof) and all conditions to such EWPO Scheme Resolutions (excluding any condition relating to the passing of any other EWPO Scheme Resolution) being fulfilled; the UK Listing Authority having agreed to admit the Ecofin Global Shares to the premium segment of the Official List and the London Stock Exchange having agreed to admit the Ecofin Global Shares to trading on the main market for listed securities of the London Stock Exchange; the London Stock Exchange having agreed to admit the EF Realisation Shares to trading on the specialist fund segment of the main market of the London Stock Exchange (the Specialist Fund Segment); and the Directors not resolving to abandon the EWPO Scheme. In the event that condition (i)(a), (ii), (iii) or (iv) fails to be satisfied, the Second General Meeting will be adjourned indefinitely and the EWPO Scheme will lapse. In these circumstances the Directors will consider the most appropriate course of action for the Company at that time. The Rollover Vehicles A. Ecofin Global Utilities and Infrastructure Trust plc Shareholders will be issued with new Ecofin Global Shares on a one-for-one basis pursuant to the EWPO Scheme, adjusted for any Election made and accepted for the Cash Exit. Ecofin Global is a newly incorporated investment trust that will be admitted to the premium segment of the Official List and to trading on the main market for listed securities of the London Stock Exchange. Ecofin Global will invest in listed global utilities and infrastructure equities and additionally may hold, to a limited extent, related fixed-income securities. The investment objective of Ecofin Global will be consistent with that of the Company, that is to achieve a high, secure dividend yield on its investment portfolio and to realise long-term growth in the capital value of the portfolio for the benefit of Ecofin Global Shareholders while taking care to preserve Ecofin Global Shareholders capital. In order, however, to achieve this objective, the existing investment policy of the Company has been changed to modify the investment universe in which Ecofin Global can invest. Ecofin Global intends to focus solely on investments in the global utilities and infrastructure sectors (excluding social infrastructure), principally in developed, OECD countries. It will invest in the listed equity, equity-related and, to a limited extent, the fixed interest securities of companies in those sectors. For the purposes of investment, utility companies are those involved in the generation, transmission and distribution of electricity including the production of electricity from renewable sources; the transport, storage and distribution of gas; the abstraction, treatment and supply of water and the treatment of waste water; and the provision of environmental services such as recycling and waste management. Infrastructure companies are those that own and operate assets which are essential to the functioning of developed economies and to economic development and growth, notably transportation-related assets such as roads, railways, ports and airports. The investment manager (the Investment Manager), Ecofin Limited, believes that Ecofin Global will provide investors with international diversification, principally in OECD developed markets, exposure to a sector which is under-represented in the UK domestic equity market and investment company universe, and a sustainable and attractive dividend yield with the prospects of real dividend growth. It also believes that spending on infrastructure in the developed economies will grow strongly over the next decade and that the investment universe in which Ecofin Global will invest offers investors lower than average equity market risk, higher than average dividend yield and reasonable earnings growth (as compared to the MSCI World Index of developed country equity markets). 13

14 In addition to the modification of the Company s investment universe, the following investment restrictions will apply to Ecofin Global: Ecofin Global will not invest in unquoted investments, save for bond and derivative instruments, which are typically not listed; Ecofin Global will not invest in telecommunications companies nor in companies which own or operate social infrastructure assets funded by the public sector such as schools, hospitals or correctional facilities; Ecofin Global will not invest in early stage listed companies which involve significant technological or business risk; the Company s existing limit on investing in fixed-income instruments will be reduced from 15 per cent. of investments to 10 per cent. of investments at the time of investment; and the Company s existing limit on investing in non-oecd countries will be reduced from 20 per cent. of investments to 10 per cent. of investments at the time of investment. Ecofin Global will not have any structural gearing but will utilise a flexible gearing policy with the ability to borrow amounts up to 25 per cent. of its net assets. Jean-Hugues de Lamaze, who has worked at the Investment Manager for eight years, will have responsibility for the management of Ecofin Global s portfolio. The Board as a whole has been disappointed with EWPO s NAV performance; however, the Ecofin Global Board has confidence in the ability of Jean-Hugues de Lamaze and his team at Ecofin to deliver strong performance in the future. The Board has been pleased with the performance of EWPO s portfolio since Jean-Hugues assumed responsibility for the management of the Company s liquid assets on 6 April The Ecofin Global Board comprises the existing directors of EWPO other than Lord Myners. The reduced size of the Ecofin Global Board will assist in managing the ongoing charges of Ecofin Global; in addition, the directors fees paid by Ecofin Global will be ten per cent. lower than the comparable directors fees currently paid by EWPO. Further details on Ecofin Global including its management arrangements, management fees, target yield, continuation vote and discount control are set out in Section A of Part IV of this document. Including the elections for the ZDP Rollover Option under the Subsidiary Scheme but assuming no Dissenting Shareholders under the EWPO Scheme and that the Cash Exit is taken up in its entirety, on the basis of valuations as at 17 August 2016, it is expected that Ecofin Global will have net assets of approximately million. This would increase up to approximately million if no Shareholders elect for the Cash Exit. B. EF Realisation Company Limited Shareholders will be issued with one new EF Realisation Share for every four Shares pursuant to the EWPO Scheme, with fractional entitlements rounded down to the nearest whole number. This ensures equitable treatment in relation to EWPO s illiquid assets as Elections for the Cash Exit will not result in Shareholders who chose to roll over their entire investment increasing their existing exposure to the illiquid assets. EF Realisation is a newly incorporated, Guernsey-domiciled investment company which will be admitted to trading on the Specialist Fund Segment. All the unquoted equity investments and illiquid assets, including the Lonestar Investment (the Illiquid Portfolio), held by the Company on the EWPO Scheme Effective Date, plus an amount in cash necessary for working capital purposes, will be transferred to EF Realisation pursuant to the EF Realisation Transfer Agreement. EF Realisation will make no new investments and, following EF Realisation Admission, will seek to achieve an orderly realisation of the Illiquid Portfolio with the assets sold over a period of time and the net proceeds being distributed to EF Realisation Shareholders. As it is expected that the orderly realisation of the Illiquid Portfolio will take no more than two years, the EF Realisation Board does not consider it appropriate for EF Realisation to have an indefinite life. A liquidation resolution will therefore be proposed by no later than the second anniversary of EF Realisation Admission that EF Realisation be wound-up voluntarily pursuant to The Companies (Guernsey) Law, 2008 (as amended). Prior to 14

15 such liquidation resolution being proposed, EF Realisation will have the flexibility to extend its life for further successive periods of one year, subject to the approval of EF Realisation Shareholders. On the basis of valuations as at 17 August 2016, the Illiquid Portfolio represents approximately 41.4 million (being 12.3 per cent. of the Company s NAV). Shareholders should note that EF Realisation s investment in Lonestar is expected to constitute approximately 68.2 per cent. of EF Realisation s assets as at EF Realisation Admission (based on the expected valuation of the EF Realisation Portfolio as at 17 August 2016). Further details of the Illiquid Portfolio, based on the Company s holdings of illiquid assets as at the date of this document, are set out in Part II of the EF Realisation Prospectus. In addition, further detailed information about the Lonestar Investment, including financial information for the three years ending 31 December 2013, 2014 and 2015 and for the six month period ending 30 June 2016, and the specific risks that are considered to be material to Lonestar and the Lonestar Group, are set out in Annex 1 to the EF Realisation Prospectus. Further details of EF Realisation, including the board and the management and fee arrangements are set out in Section B of Part IV of this document Shareholder Entitlements Under the EWPO Scheme, Shareholders will receive one Ecofin Global Share for every Share held in the Company, subject to adjustment for any Elections made and accepted for the Cash Exit. Shareholders will also receive EF Realisation Shares on the basis of one EF Realisation Share for every four Shares held in the Company (with fractional entitlements rounded down to the nearest whole number). The EWPO Scheme also provides an opportunity for Shareholders to realise part of their investment in the Company for cash in lieu of receiving Ecofin Global Shares, subject to scaling back as described under the heading Scaling back of Elections for the Cash Exit in Part II of this document. Details of the settlement arrangements in respect of the Cash Exit are set out in Part II of this document in the section headed Settlement of Elections for the Cash Exit and details of the issue of Ecofin Global Shares and EF Realisation Shares are set out in Part II of this document in the section headed Dealings and settlement in Ecofin Global Shares and EF Realisation Shares. Shareholders are also referred to the section headed Implementation of the EWPO Scheme in Part II which explains the mechanics of the EWPO Scheme and how it will be implemented including the reclassification of Shares to reflect Elections which have been made and accepted for the Cash Exit. The full terms and conditions of the EWPO Scheme are set out in Part III of this document. Under section 111(2) of the Insolvency Act 1986, as amended, any Shareholder who does not vote in favour of the resolutions to approve the EWPO Scheme to be proposed at the First General Meeting may, within seven days of the resolutions at the First General Meeting being passed, express his dissent in writing to the proposed Liquidators at the registered office of the Company, at 10 Harewood Avenue, London NW1 6AA for the attention of the proposed Liquidators (such Shareholder being a Dissenting Shareholder). The purchase price for such Dissenting Shareholders Shares will not exceed that which the Dissenting Shareholder(s) would receive on a straightforward winding-up of the Company and will be paid once all liabilities have been settled or provided for to the Liquidators satisfaction. The decision as to whether to elect for cash under the Cash Exit is a matter for each Shareholder and will be influenced by his or her individual financial and tax circumstances and investment objectives. Accordingly, Shareholders should read the whole of this document and the accompanying Ecofin Global Prospectus, the Supplementary Prospectus thereto, and the EF Realisation Prospectus carefully before deciding how to vote on the EWPO Scheme Resolutions and whether or not to make an Election for the Cash Exit. The Directors cannot, and do not, offer any advice or recommendation to Shareholders as to whether to make, or the extent of, an Election for the Cash Exit. If you need advice, you should consult your stockbroker, bank manager, solicitor, accountant or other financial adviser authorised under FSMA without delay. Shareholders should refer to the risk factors set out on pages 6 to 7 of this document. Costs of the Reconstruction Proposals The total costs of implementing the Reconstruction Proposals (save as described below), which will be borne by the Company and paid out of the Liquidation Fund, are expected to be approximately 1.6 million (exclusive of irrecoverable VAT). 15