Update on Proposals for the Reorganisation (1363B)
February 14 2011 - 2:00AM
UK Regulatory
TIDMVCF
RNS Number : 1363B
Value Catalyst Fund Limited (The)
14 February 2011
14 February 2011
The Value Catalyst Fund Limited
("VCF" or "the Company")
UPDATE ON PROPOSALS FOR THE REORGANISATION OF THE COMPANY
Further to the Company's announcement of 14 December 2010, your
Board wishes to update Shareholders on its proposals for the
reorganisation of the Company. Subject to shareholder approval it
is intended that the Company's portfolio will be divided into two
separate pools of assets - a continuation pool and a realisation
pool - according to Shareholder elections. The proposals will
provide an opportunity for Shareholders to continue being invested
in the Company with regular realisation opportunities at Net Asset
Value ("NAV"), whilst also offering those Shareholders desiring an
earlier potential exit the ability to realise their investment in
accordance with an orderly realisation programme.
Your Board was pleased to note that Shareholders voted in favour
of the continuation of the Company for a further five years at the
last annual general meeting of the Company, but regardless wishes
to offer Shareholders new liquidity options. Historically, the
Ordinary Shares have traded at times on a significant discount to
NAV and despite the size of the Company; the liquidity in the
Ordinary Shares has not been good. As such, the Board would like to
see both continuing and realising Shareholders offered a structure
which reduces any discount to NAV and provides regular realisation
opportunities at around NAV level. The Board has therefore
formulated proposals which the Directors believe will maximise the
options available to Shareholders and these in summary
comprise:
-- an invitation to Shareholders to remain invested in a Company
focussed on generating value from investing in undervalued asset
based companies including closed-ended and property companies and
discounted opportunities, whilst having an opportunity to realise
their investment at NAV on a six monthly basis following the expiry
of an initial twelve month period;
-- an opportunity for Shareholders desiring to exit their
investment in the Company to rollover their investment (being the
assets attributable to such holders' interests in Ordinary Shares)
into a realisation pool of assets, to be realised over time in
accordance with an orderly realisation programme which will seek to
return capital to Shareholders in stages, as soon as is
practicable;
-- the division of the Company's portfolio of assets into two
separate pools of assets - a continuation pool and a realisation
pool - based upon the NAV attributable to the elections for each
pool (subject to the deduction of the costs and expenses of the
reorganisation pool from the realisation pool);
-- the redesignation of Ordinary Shares attributable to the
elections for the realisation pool as Realisation Shares;
-- the adoption of an amended and restated memorandum and
articles of association of the Company to reflect the
reorganisation and, in particular, establishing the rights
attaching to the Realisation Shares; and
-- the cancellation of the admission of Shares to trading on
AIM.
Performance
The Company performed very well ahead of the credit crisis, but
during the credit crisis suffered from being geared and holding
large strategic stakes. As an activist fund such positions are part
of the investment process and your Company was pleased to realise a
substantial position, DouglasBay Capital PLC ("DBAY"), last year
which resulted in an uplift of 22.95 % to the NAV, demonstrating
the hidden value in the portfolio. For the 12 months to 31 December
2010 the NAV increased 19.41%. The full value of DBAY has not been
recognised in the NAV yet as they are awaiting European Commission
competition clearance and there is substantial potential in your
Company's other major investments. Even with the credit crisis
effects and the conservative valuation of certain positions within
the portfolio, the NAV of your Company has increased by 21.02% with
distributions re-invested, since inception until 31 January 2011,
against a fall of 11.58 % in the S&P and a fall of 1.77 % in
the FTSE ($US) over the same period.
A circular containing proposals outlined above will be posted to
Shareholders as soon as practicable.
Enquiries:
Azhic Basirov / Siobhan Sergeant
Smith & Williamson Corporate Finance Limited
Tel +44 (0)20 7131 4000
This information is provided by RNS
The company news service from the London Stock Exchange
END
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