Thousands of investors are facing potential losses of up to £7.5m after investing in solar energy bonds that may now be worthless after the issuer fell into administration.
The Guardian reports that Secured Energy Bonds, a subsidiary of Australian-based CBD Energy, was launched in 2013 and marketed its fixed income products as an “environmentally-friendly and locally sensitive” investment, with funds used to install solar panels across the UK.
The bonds promised to pay up to 6.5 per cent interest a year. According to the report, an interest payment due on Monday was unpaid with bond registrar Capita stating the bonds had been suspended.
The investments are treated in the same way as shares and therefore not covered by the Financial Services Compensation Scheme.
CBD Energy went into voluntary administration in November and investors are trying to recover whatever assets are available to recoup losses.
Company owner Gerry McGowan previously owned low-cost airline Impulse Airlines, which he later sold to Qantas. In October last year, McGowan took leave from the firm while a board review was conducted to see if accounts needed restating.
The report also states McGowan sold his £3.6m Sydney apartment around the same time that CBD Energy went into administration.