Reconstruction Capital II Ltd Proposed acquisition & change of investing policy (7710B)
January 12 2018 - 8:33AM
UK Regulatory
TIDMRC2
RNS Number : 7710B
Reconstruction Capital II Ltd
12 January 2018
12 January 2018
Reconstruction Capital II Limited
Proposed acquisition of indirect shareholding in Policolor S.A.,
change to Investment Objective and Policy, termination of Annual
Buyback Programme, and Continuation of the Life of the Company
Reconstruction Capital II Ltd ("RC2" or the "Company"), a
closed-end investment company incorporated in the Cayman Islands
admitted to trading on the AIM market of the London Stock Exchange,
today announces that it has signed conditional agreements for the
purchase of a shareholding in two Romanian-focussed investment
funds whose main underlying asset is a 60% shareholding in
Policolor S.A. ("Policolor"), a Romanian producer of paints and
coatings, resins and chemicals with a substantial real estate
portfolio in which RC2 already owns the balance of 40%.
Further investment in Policolor
The Company has entered into an agreements to acquire 22 per
cent. of the issued share capital of Reconstruction Capital plc
("RC") for EUR 1.6 million and 10 per cent. of the issued share
capital of The Romanian Investment Fund Limited ("RIF") for EUR 1.7
million, both acquisitions being subject to RC2 shareholder
approval (the "Acquisition").
The main objective of the Acquisition, which will give RC2 a
further 15.36 per cent. indirect shareholding in Policolor in
addition to the already held direct interest of 40%, is to provide
RC2 with greater control over the exit process from this asset.
Consistent with the current policy, Policolor will continue not to
be consolidated into the accounts of the Company. For the year
ended 31 December 2016, RC had a loss of US$ 701,348 and RIF had a
loss of US$ 970,622. The total cost of the Acquisition is EUR 3.35
million, and the shares are being acquired at an overall discount
of 35 per cent. to their net asset values. The total net asset
values of RC and RIF as at 30 November 2017 were US$ 15.1 million
and US$ 27.4 million, respectively. The consideration is being
satisfied from the Company's existing cash balances.
RIF's 60% shareholding in Policolor represents over 97% of its
total assets and RC's only substantial asset is a 69.2%
shareholding in RIF.
Proposal to revise the existing Investing Objective and
Policy
RC2 also intends to propose to its shareholders that RC2's
investment objective and policy be amended so that new investments
will be permitted, but only in assets based in Romania, and with a
primary focus on real estate assets.
If the proposed change to the investment policy is approved by
shareholders, the Board intends to distribute any net income
received from such investments to Shareholders, whilst re-investing
any realised capital, including capital gains, in further
investments.
Furthermore, if Shareholders approve the proposed change to the
Company's investment policy, the Board will end the Company's
annual buyback programme pursuant to which any annual realised
profits are to be returned to Shareholders by way of tender offers
to repurchase Shares at NAV.
Proposal to continue the life of the Company
Conditional on the proposed change to the Company's investment
policy, the Board intends to propose to Shareholders that the life
of the Company be extended so that the Company's next continuation
vote be held in 2023.
RC2 will shortly be issuing a Circular providing further details
on the proposed Acquisition, the proposed change to the investment
objective and policy, the proposed termination of the annual
buyback programme and the proposed continuation of the life of the
Company. The Circular will contain a notice of an Annual General
Meeting.
For further information, please contact:
Reconstruction Capital II Limited
Ion Florescu/Anca Moraru
Tel: +40 21 3167680
Grant Thornton UK LLP (Nominated Adviser)
Philip Secrett/Carolyn Sansom
Tel: + 44 (0) 20 7383 5100
finnCap Limited (Broker)
William Marle / Giles Rolls
Tel: +44 20 7220 0500
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulations (EU) No. 596/2014. Upon the publication of this
announcement, this inside information is now considered to be in
the public domain.
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCEAAFAFSEPEFF
(END) Dow Jones Newswires
January 12, 2018 08:33 ET (13:33 GMT)
Reconstruction Capital Ii (LSE:RC2)
Historical Stock Chart
From Sep 2024 to Oct 2024
Reconstruction Capital Ii (LSE:RC2)
Historical Stock Chart
From Oct 2023 to Oct 2024