2010 Continuation Resolution


 

TIDMDTL 
 
RNS Number : 7032H 
Dexion Trading Limited 
25 February 2010 
 

25 February 2010 
 
Dexion Trading Limited 
 
2010 Continuation Resolution 
 
Introduction 
 
The Company is today posting a Circular to Shareholders in connection with the 
2010 Continuation Resolution. 
 
The Company's discount management provisions were triggered for the first time 
in February 2009 and, at the relevant class meeting held on 27 May 2009, the 
2009 Continuation Resolution was passed.  Approximately 72.3 per cent. of the 
issued Shares were voted on the 2009 Continuation Resolution of which 91.7 per 
cent. were voted in favour of continuation. 
Notwithstanding (i) the improvement in the NAV performance of the Shares (the 
NAV of the Shares rose by 7.43 per cent. over the 12 month period ended 29 
January 2010) and (ii) the continued recovery of the Share price (which rose by 
12.35 per cent. over the same period), over the 12 month period ended 17 
February 2010, the Shares traded, on average, at a discount to NAV of 11.61 per 
cent.  Accordingly, the Board is required under the Articles to propose the 2010 
Continuation Resolution within 4 months of the discount floor provision being 
triggered. 
The Board, having consulted with the Investment Manager, believes that it is in 
the best interests of Shareholders for such 2010 Continuation Resolution to be 
considered as soon as reasonably practicable. 
Notice convening the Meeting of Shareholders to be held at 10.00 a.m. on 24 
March 2010 is set out in the Circular. At the Meeting an ordinary class 
resolution will be proposed that the Shares continue in issue. 
 
Share price rating and Share buybacks 
As at 24 February 2010, the Company's Shares were trading at a discount to their 
prevailing estimated NAV of 8.0 per cent., amongst the narrowest discounts to 
NAV across the London listed fund of hedge funds sector. 
Over the period from 27 May 2009 (the date of the 2009 Continuation Resolution) 
to 24 February 2010, the Company repurchased 1,495,966 Shares, representing 1.32 
per cent. of the Company's outstanding issued Shares as at the date of the 
Company's last Annual General Meeting in June 2009. 
The Board intends to continue to actively use the Company's share repurchase 
authority in attempting to manage the share price discount in the future 
utilising its credit facility or other suitable cash resources (which may be 
restricted by Settlement Obstructions). 
Portfolio redemptions and portfolio liquidity 
The Company may currently realise any or all of its holding of class A GBP 
shares in Permal Macro by giving not less than 20 days notice to Permal, such 
notice to expire on any monthly Redemption Date. 
Accordingly, given the expected timing of any Redemption Proposal which may be 
required to be put forward in the event that the 2010 Continuation Resolution is 
not passed, the Company currently expects that it would be able to realise all 
or any part of its investment in Permal Macro within approximately 2 months 
after the closing of a Redemption Proposal and pay redemption monies to 
Redeeming Shareholders shortly thereafter. 
Upon any realisation of PMH class A GBP shares by the Company to fund a 
Redemption Proposal where less than nine months' notice of realisation is given, 
the Company is required, pursuant to its investment advisory agreement with the 
Investment Adviser and the Investment Manager, to pay to the Investment Adviser 
an amount equivalent to thirty three per cent. of the management fees that would 
otherwise have been payable in respect of the class A GBP shares so realised (at 
a rate of 2 per cent. per annum) if the full nine months' notice had been given. 
Such additional fees would be borne solely by Redeeming Shareholders. 
Recommendation 
In view of (i) the positive NAV performance of the Company's Shares during 2009; 
(ii) the continued recovery of the market price of the Shares during 2009 (and 
into 2010); and (iii) the Investment Adviser's confidence in the ability of the 
Company's investment in PMH to continue to deliver attractive risk-adjusted 
returns, the Board considers that a vote in favour of the 2010 Continuation 
Resolution to be proposed at the Meeting is in the best interests of 
Shareholders as a whole. Accordingly, the Board unanimously recommends 
Shareholders to vote in favour of the 2010 Continuation Resolution. 
Further Information 
Further details of the indicative nature of any Redemption Proposal to be put 
forward where the 2010 Continuation Resolution is not passed, together with 
detailed performance information for the Company, an investment review for 2009 
and an investment outlook are set out in the Circular. 
The Circular also contains further information which Shareholders should take 
into consideration in deciding whether to vote for or against the 2010 
Continuation Resolution including certain risk factors (which are not intended 
to be exhaustive) which may be relevant generally and/or to the 2010 
Continuation Resolution being passed and/or to a Shareholder electing to redeem 
Shares pursuant to a Redemption Proposal. 
 
Expected Timetable 
 
+---------------------------------------+--------------------------+ 
| Latest time and date for receipt of   |   10.00 a.m. on 22 March | 
| Forms of                              |                     2010 | 
| Proxy for the Meeting                 |                          | 
|                                       |                          | 
+---------------------------------------+--------------------------+ 
| Meeting of the Company                |   10.00 a.m. on 24 March | 
|                                       |                     2010 | 
+---------------------------------------+--------------------------+ 
 
Enquiries: 
 
+---------------------------+--------------------------------------+ 
| Robin Bowie / Ana Haurie  | Tel: +44 (0) 20 7822 2260            | 
| Dexion Capital Plc        |                                      | 
|                           |                                      | 
|                           |                                      | 
+---------------------------+--------------------------------------+ 
| Carol Kilby               | Tel: +44 (0) 1481 743 943            | 
| Dexion Capital (Guernsey) |                                      | 
| Limited                   |                                      | 
|                           |                                      | 
|                           |                                      | 
+---------------------------+--------------------------------------+ 
| Stuart Klein              | Tel: +44 (0) 20 7678 8000            | 
| RBS Hoare Govett Limited  |                                      | 
|                           |                                      | 
+---------------------------+--------------------------------------+ 
Terms used in this announcement shall, unless the context otherwise requires, 
bear the meanings given to them in the Circular dated 25 February 2010. 
A copy of the Circular will shortly be available for public inspection at the 
Document Viewing Facility, the Financial Services Authority, 25 North Colonnade, 
Canary Wharf, London E14 5HS. 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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