22 September 2017

SQN Asset Finance Income Fund Limited

Successful Outcome for SQN

 Finding of Damages by ITC regarding Suniva Investment

The Board of SQN Asset Finance Income Fund Limited (the "Company" or "SQN"), the leading diversified equipment leasing fund listed in the UK, is pleased to provide this positive update for SQN following the portfolio update announcement made by the Company on 19 April 2017 with regard to SQN's holding in Suniva Inc., the U.S. based solar cell and module manufacturer.

In August 2015, SQN entered into a 5-year financing arrangement with Suniva that was secured by its manufacturing and production equipment and supported by a parental guarantee from a Hong Kong-listed public company. In the NAV as at 30 August 2017, being the last published NAV, the amount outstanding to the Company was $29.9m (£24.3m), which represented approximately 6.8 per cent. of the net assets of the ordinary share class.  The Suniva investment is not held by the C shares.

In April 2017, Suniva filed for protection under the Bankruptcy Laws of the United States as a result of an unprecedented decline in the market price of solar cells and modules caused by an excess of foreign imports in circumvention of existing anti-dumping tariffs and WTO rules.

Today, the United States International Trade Commission ("ITC") rendered its decisions on Suniva and Solar World's petition under Section 201 of the Trade Act of 1974, seeking protection for the solar manufacturing industry in the United States. Consistent with the data collected and the presentations made by Suniva and Solar World at the hearing on 15 August 2017, the ITC has found that substantial damage has been caused to the U.S. solar manufacturing industry by the overcapacity of foreign imports. Therefore, the ITC will be making a recommendation to the White House to provide protection for U.S. solar manufacturers by 13 November 2017.

The ITC has set a hearing date of 3 October 2017 to hear arguments for and against the remedies being proposed by Suniva and Solar World. It is anticipated that this will be a very public campaign by those opposed to the ITC's ruling, in an effort to influence the decision-makers in this process from now until the time of the White House's ruling.

Should Suniva be granted a form of the remedies it has proposed, it is expected that profitable operations will recommence in early 2018.

In pursuit of the trade case, the Company expended $4.0m in legal fees and other costs to protect our assets (representing 0.83 % of the ordinary shares). 

This is encouraging news for SQN as it sets the stage for multiple outcomes that can result in a full recovery of the Company's investment, interest due and the fees expended.

The Board of the Company will continue to provide updates as they are publicly available.

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Notes to Editor

The Company invests in equipment lease and asset finance arrangements across a diverse portfolio of assets and industries predominantly in the UK, Northern Europe and US. The Company focuses on business-essential, revenue-producing (or cost saving) equipment and other assets with high in-place value and long economic life relative to the investment term.

The Company's Investment Managers are SQN Capital Management, LLC, a Registered Investment Advisor with the United States Securities and Exchange Commission and its subsidiary, SQN Capital Management (UK) Limited. The principals responsible for managing the portfolio are Jeremiah Silkowski and Neil Roberts.