Posting of Shareholder Circular
January 20 2009 - 2:00AM
UK Regulatory
TIDMAGCV
RNS Number : 9022L
Arc Growth Company VCT plc
20 January 2009
For Immediate Release 7.00am 20 January 2009
Arc Growth Company VCT plc
("Arc VCT" or "the Company")
Posting of Shareholder Circular
Proposed appointment of Investment Manager
Proposed change of Name
The directors of the Arc VCT announce that on 19th January 2009 they posted a
Circular to Shareholders setting out some proposed changes to the Company.
The Board proposes to appoint Elderstreet Investments Limited ("Elderstreet
Investments") as the Company's Investment Manager with immediate effect. This
constitutes a Related Party Transaction and accordingly requires Shareholder
approval. This is due to David Lowe, a former Director of the Company, having an
interest of 33.3% in the issued share capital of Elderstreet Holdings Limited
which in turn holds 100% of Elderstreet Investments, the proposed investment
manager. At the same time, and to reflect the change of Investment Manager, the
Company proposes to change the name from Arc Growth Company VCT plc to Bedford
Row VCT Plc which also requires Shareholder approval.
Prior to the appointment, the Directors considered three options following the
resignation of Arc Fund Management as Investment Manager on 18 July 2008. These
three options were: the Directors continue to manage the Company; merge with
another VCT; or appoint a replacement Investment Manager. The Board explored all
three options, including a number of approaches to merge with other VCT's. The
Directors considered these approaches but felt that none of them were in the
best interests of the Shareholders. A search was commenced for a replacement
Investment Manager and after discussions with several potential candidates, the
Board chose Elderstreet Investments as the Directors felt that they offered the
nearest approach to the Company's current investment philosophy and strategy. In
addition the Board has been reviewing its costs structure and the composition of
its Board and therefore it is the Board's objective to keep such operational
costs below GBP100,000 for the financial year ending 28 February 2010. The
Directors believe the appointment of Elderstreet Investments should help achieve
this.
Elderstreet Investments is an experienced VCT investment manager. In 2008 at the
Growth Company Investor awards it was shortlisted for VCT Fund Manager of the
year. It currently manages the Elderstreet Venture Capital Trust plc,
Elderstreet Capital Partners and the Kleinwort Capital Trust plc. The investment
management team comprises of 4 key executives with extensive industry background
and in aggregate more than 50 years of venture capital experience: Michael
Jackson MA FCA, David Taylor BSc DipM, MBA William Horlick and David Lowe FCA.
There will be no change in the Company's investing strategy as a result of the
proposed appointment of Elderstreet Investments as Investment Manager.
Subject to the Resolutions being passed, the Company and Elderstreet Investments
will enter into the Investment Management Agreement. Under the Investment
Management Agreement, Elderstreet Investments will agree (subject to the overall
policy and supervision of the Directors and such directions as the Directors may
give from time to time) to manage or procure the management of the Company's
investments in return for an annual management fee (payable quarterly in
advance) of GBP45,000 (plus VAT, if any, at the applicable rate) plus a
performance fee detailed below.
The Company will agree to indemnify Elderstreet Investments, as is customary,
against all or any actions, proceedings, losses, claims, demands and liabilities
whatsoever arising out of the proper performance of the Elderstreet
Investments's duties. There is no value or time limit attached to the indemnity
other than the statutory time limit of six years.
Elderstreet Investments will manage, without additional fee, the monies received
by the Company from investors pending investment in investee companies. In the
event of Elderstreet Investments managing more than one VCT or EIS Fund
("Managed Funds") it shall afford the Company the opportunity of co-investing in
any company in which its Managed Funds invest pro rata to its net asset value
and it shall report to the Board monthly confirming all of its Managed Funds
investments. Elderstreet Investments will not be entitled to any additional
benefits on termination of its appointment.
The Company shall pay to the Manager a fee (the "Performance Fee") by way of the
issue of new shares at the then Net Asset Value equal to 20 per cent. of the
amount by which the aggregate of all Distributions plus the then Net Asset Value
exceeds GBP1 per share subject to a cap of 5% of the then issued share capital
of the Company.
Woodside Secretaries Limited will continue to provide administrative and
accounting services to the Company.
The General Meeting of the Company will be held at 32 Bedford Row, London WC1R
4HE on 12 February 2009 at 11.00 am.
Copies of the Circular are available for inspection by the public at the
Document Viewing Facility, 25 The North Colonnade, Canary Wharf, London, E14
5HS.
Contact: Richard Hargreaves, Chairman, Arc VCT on 07957 861786
Graham Urquhart, Company Secretary, Arc VCT on 0203 216 2000
William Horlick, Elderstreet Investments on 0207 831 9088
Roland Cornish, Beaumont Cornish Limited on 020 7628 3396.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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