The share price plunge followed the board scrapping its 6p dividend target for the 2023 financial year and not declare a dividend for the second quarter, due to ongoing liquidity and balance sheet pressures.
In light of this, the board said it would begin a formal consultation with its shareholders, starting on 2 October, which would engage on the dividend policy and the future direction of the trust.
The trust also said it had made significant progress in the syndication of one of its holdings - Verne Global - with the terms expected to be announced in the fourth quarter of the year.
Digital 9 Infrastructure withdraws 2023 dividend target as balance sheet pressures mount
Given the "wide range" of possible outcomes across near term events such as the syndication and medium-term outlook "uncertainty" on operating cash flows and dividends, Peel Hunt, DGI9's corporate broker, downgraded its rating from ‘outperform' to ‘under review'.
Pietro Nicholls, portfolio manager at RM Funds, a DGI9 shareholder, said the trust had "destroyed" its credibility with investors after scrapping the dividend target less than three months after the board said it could be maintained.
"The fact they have just done this now after the board confirmed they would not need to, I think really has undermined confidence," he said.
"For some investors, this was probably the straw that broke the camel's back. Not just because of the suspension of the dividend, but because there is material uncertainty around aspects of the company as well."
Nicholls argued there are questions regarding DGI9's ability to executive its future strategy, and that more visibility on the execution of the sale and on the trust's overall capital structure is needed.
In a research note, Numis analyst Colette Ord said that while there had been "positive news" that a syndication is nearing, if a little later than expected, there is still "no clarity on what this realistically means for the returns that DGI9 can make going forward".
Moreover, she argued DGI9's position as a going concern relies upon the transaction concluding successfully, so the performance of the share price is "likely to remain volatile from here".
"While we believe it is correct to accelerate the deleveraging of the business, it is very disappointing that the board has historically insisted on paying a 6p uncovered dividend, even when some investors had been in favour of a cut," she said.
According to Ord, the "main disappointment" is that the 6p target was reiterated again by the board as recently as 18 July this year. Moreover, she noted the consultation about the future direction of the company may lead to "more fundamental changes".
"We expect that investors may see a realisation of the assets as the most appropriate option," she said. "The capital markets day illustrated the quality of the underlying portfolio companies, and we hope that the board can crystallise this value for shareholders."
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Meanwhile, James Carthew, head of investment companies at QuotedData, said that although the dividend omission was not anticipated, it seemed like a "sensible response" by the board to the liquidity problems it faces.
"In hindsight, the previous management team overcommitted the company to supporting a number of capital hungry growing businesses, thinking that DGI9 would be able to carry on issuing vast amounts of equity," he said.
"Shareholders will be disappointed, but the share price already reflects the company's problems."
Selling a large slice of Verne and securing outside funding for that company's investment programme would represent a "significant improvement" to the situation, he argued, potentially acting as a "catalyst for a re-rating" and allowing the restoration of dividends.