Edge Performance VCT PLC Publication of Circular and Notice of GM (9051O)
2023年2月3日 - 8:34PM
ＲＮＳを含む英国規制内ニュース （英語）
TIDMEDGH
RNS Number : 9051O
Edge Performance VCT PLC
03 February 2023
Edge Performance VCT public limited company
LEI Number: 213800PAOE1WTGQGSH39
3 February 2023
Publication of Circular
Further to the announcement made by Edge Performance VCT public
limited company (the "Company") on 14 December 2022, the Company
has today published a circular (the "Circular") to the Company's
Shareholders setting out recommended proposals (the "Proposals")
for a members' voluntary liquidation of the Company and an
associated related party transaction.
The Proposals are subject to Shareholder approval and the
Circular contains a notice convening a general meeting of
the Company to be held at the offices of Simons Muirhead Burton
LLP, 87-91 Newman Street, London W1T 3EY at 10.00 a.m. on
28 February 2023 (the "General Meeting").
Introduction
As announced by the Company on 14 December 2022, following
lengthy discussions with Edge Investments Limited (the "Investment
Manager") as to the Company's current position and the overall
market outlook, your Board does not foresee any reasonable
opportunity for the Company to grow in the short term. Accordingly,
after careful consideration, the Board believes that it is
in Shareholders' best interests that the Company be wound
up, with the intention that there will be an orderly winding-down
of the Company, realisation for cash of the Company's assets
and a return of that cash to Shareholders in a manner which
will be intended to preserve VCT tax-reliefs. The Board's
aim in making this recommendation is to seek to ensure the
most efficient and maximum return to Shareholders as is possible.
In order to ensure an efficient realisation process and in
seeking to maximise value for Shareholders, the Board and
the proposed Liquidators have agreed, subject to Shareholder
approval, that the Company enters into an advisory agreement
with the Investment Manager. Under this agreement, the Investment
Manager will be paid a fee, which includes a performance incentive
element, to assist the Liquidators with the asset realisation
process during a period of up to two years (which may be extended
by mutual agreement between the Liquidators and the Investment
Manager) following the commencement of the liquidation. The
entry into this advisory agreement will constitute a related
party transaction under the FCA's Listing Rules (the "Related
Party Transaction") and a summary of its material terms is
set out in Part 2 of the Circular.
Background to the Proposals
As Shareholders will be aware, the Company's Net Asset Value
has reduced significantly since the previous financial year
end, with payments to Shareholders by way of (i) dividends
totalling GBP4,058,489 and (ii) share buybacks totalling GBP888,791,
and contractual performance incentive fees payable in accordance
with the terms of the existing Investment Management Agreement
of GBP2,586,146 paid to the Investment Manager, having depleted
the Company's cash, in addition to market-related reductions
in the portfolio valuations. As a result, the Board and the
Investment Manager are of the opinion that the Company is
sub-scale and that the Company's ongoing charges ratio (being
approximately 17.61 per cent.) renders the ongoing operation
of the Company uneconomic.
In addition, without raising additional capital to invest,
the Company faces the issue of potentially having to make
further investments to meet the requirements of the VCT Rules
which could delay the return of Shareholders' funds whilst
also potentially resulting in the Company having insufficient
cash to operate.
The existing Investment Management Agreement, and the associated
obligations of the parties, including the Company's obligations
to pay the Investment Manager its annual management charge
and performance incentive fee and the Investment Manager's
obligations in respect of the cost cap, will terminate automatically
in accordance with the terms of the relevant agreements on
the Company's entry into liquidation with no further amounts
payable in respect of such arrangements.
However, the Board considers it critical to maximising the
return of funds to Shareholders as a result of any asset realisation
process that the Investment Manager's services be retained
in respect of such process. The Investment Manager made the
investments in the portfolio companies, holds the relationships
with portfolio management teams and possesses full knowledge
of the portfolio companies, the markets in which they operate
and the detailed insight into individual company performance.
The Investment Manager has therefore agreed, pursuant to an
advisory services agreement (the "EIL Advisory Services Agreement")
and subject to Shareholder approval of this appointment as
a related party transaction, to assist the Liquidators with
the realisation of the Company's remaining assets during the
course of the proposed liquidation. Retaining the Investment
Manager whilst removing the Company's listing and reducing
the Board size will minimise the Company's ongoing running
costs and the impact that these would have on Shareholders'
future returns.
Accordingly, after careful consideration, the Board has concluded
that it is in Shareholders' best interests that the associated
Related Party Transaction with the Investment Manager be approved
by Shareholders.
The Board has considered the Proposals in the context of ensuring
periodic distributions will continue to be made to Shareholders.
The Board is satisfied that this will be the case and that
the Liquidators will be able to pay out net realisation proceeds
to Shareholders as part of the liquidation process (although
the timing and quantum of any such distributions will be at
the Liquidators' sole discretion).
The members' voluntary liquidation
The Board is recommending that the Company be placed into
the members' voluntary liquidation. This requires the approval
of Shareholders at the General Meeting.
It is proposed that Paul Cooper and Asher Miller, both licensed
insolvency practitioners of Begbies Traynor (London) LLP,
29th Floor, 40 Bank Street, London, E14 5NR be appointed as
joint liquidators of the Company (the "Liquidators"), and
that their remuneration shall be determined by the Company.
The winding-up of the Company will be a solvent winding-up
in which it is intended that all creditors will be paid in
full. The appointment of the Liquidators becomes effective
immediately upon the passing of Resolution 2 at the General
Meeting, at which point the powers of the Directors will cease.
The Liquidators will then assume responsibility for the winding-up
of the Company, including the realisation of the remaining
assets of the Company, the payment of fees, costs and expenses,
the discharging of the liabilities of the Company, obtaining
and, where they consider it appropriate, acting upon advice
from the Investment Manager in its advisory capacity (if appointed)
and the distribution of the Company's surplus assets to Shareholders.
The net proceeds of the realisation of the Company's assets
will be distributed to Shareholders after the Company's outstanding
liabilities and the costs of implementing the Proposals, including
the Liquidators' and the Investment Manager's fees, have been
met. Cash held by the Company will be distributed to Shareholders
through one or more distributions in accordance with the provisions
of the Articles.
In order to facilitate the implementation of the Proposals,
the Shares will be suspended from listing on the Official
List and from trading on the London Stock Exchange with effect
from 7.30 a.m. on 28 February 2023, being the date of the
General Meeting.
If Resolution 2 is subsequently passed at the General Meeting,
this will also result in the cancellation of the listing of
the Shares on the Official List and the Shares ceasing to
trade on the London Stock Exchange. It is expected that the
cancellation of listing and trading would take effect from
8.00 a.m. on 1 March 2023.
Distributions to Shareholders
Assuming Resolution 2 is passed, the Liquidators expect to
make an initial capital distribution to Shareholders in May
2023 (the "Initial Distribution"). It is estimated that the
value of the Initial Distribution will be not less than 5
pence per Share and this is in place of the previously announced
intention pay a dividend of 5 pence per Share prior to the
Company's entry into liquidation.
As the Liquidators realise the Company's assets, and once
they have satisfied the claims of creditors of the Company
and paid the costs and expenses of the liquidation, it is
expected that the Liquidators will make further periodic distributions
to Shareholders.
All Shareholders on the Register as at 6.00 p.m. on 27 February
2023 will be entitled to any distributions made during the
course of the liquidation.
Related Party Transaction
As noted above, the Board believes it is critical to maximising
the return of funds to Shareholders, and ensuring this is
achieved in an orderly manner, that the Investment Manager's
services are retained in respect of the asset realisation
process. Accordingly, the Company has entered into the EIL
Advisory Services Agreement with the Investment Manager and
the Liquidators pursuant to which the Investment Manager has
agreed to provide discretionary investment advisory services
to the Company for the two years immediately following the
Company's entry into members' voluntary liquidation. The EIL
Advisory Services Agreement will not become effective unless
and until Shareholders pass both Resolutions at the General
Meeting.
Under the terms of the EIL Advisory Services Agreement and
in consideration for providing such services, the Investment
Manager will be entitled to the following fees, payable by
the Company:
1. a fixed management fee of GBP150,000 per annum payable
for each of the first two years following the Company's entering
liquidation; and
2. a performance incentive fee of 20 per cent. of any increase
in cash realised for the Company, from realisations of the
Company's Qualifying Portfolio which are completed or legally
committed to during the Investment Manager's appointment,
over the Net Asset Value of the Company's Qualifying Portfolio
as at 24 February 2023, subject to a 6 per cent. annual hurdle.
For the avoidance of doubt, no performance incentive fee will
be paid to the Investment Manager until the Company has received,
in cash, an amount equal to the NAV of the Qualifying Portfolio
as at 24 February 2023 plus the hurdle amount and any such
amount will be calculated on total Qualifying Portfolio returns
and not on an asset by asset basis.
The Investment Manager is a related party of the Company and
the entry into the EIL Advisory Services Agreement constitutes
a related party transaction for the purposes of LR11.1.5(1).
As such, the Company will seek the approval of the Independent
Shareholders for the Company's entry into the EIL Advisory
Services Agreement.
It will be at the sole discretion of the Liquidators to extend
the two year term of the EIL Advisory Services Agreement if
they believe that to do so would be in Shareholders' best
interests at the relevant time.
Once in liquidation, the Company will not make any further
investments other than a follow-on investment in an existing
Qualifying Portfolio Company which is intended to help facilitate
the Company's sale or other disposal of such investment.
Expected Timetable
Notice of General Meeting 3 February 2023
Last day of dealing in the Shares 23 February 2023
through CREST on a normal rolling
two-day settlement basis
Deadline for receipt of Forms 10.00 a.m. on 24 February 2023
of Proxy
Close of Register and Record 6.00 p.m. on 27 February 2023
Date for participation in the
members' voluntary liquidation
Suspension of Shares from listing 7.30 a.m. on 28 February 2023
on the Of cial List and from
trading on the London Stock
Exchange
General Meeting 10.00 a.m. on 28 February 2022
Appointment of Liquidators 28 February 2023
Expected date of cancellation 8.00 a.m. on 1 March 2023
of the listing of the Shares
on the Of cial List and of the
trading of the Shares on the
London Stock Exchange
Note: All references to time in this announcement are to
UK time. Each of the times and dates in the above expected
timetable (other than in relation to the General Meeting)
may be extended or brought forward. If any of the above times
and/or dates change, the revised time(s) and/or date(s) will
be noti ed to Shareholders by an announcement through a Regulatory
Information Service.
General
This announcement does not contain all the information which
is contained in the Circular and Shareholders should read
the Circular before deciding what action to take in respect
of the Proposals.
Defined terms used in this announcement have the meanings
given in the Circular unless the context otherwise requires.
A copy of the Circular will be submitted to the Financial
Conduct Authority and will be available for inspection at
the National Storage Mechanism which is located at https://data.fca.org.uk/#/nsm/nationalstoragemechanism
and on the Company's website at https://edge.vc/investor-portal/
.
Enquiries
ISCA Administration Services edgevct@iscaadmin.co.uk
Limited
(Company Secretary)
Edge Investments Limited info@edge.vc
(Investment Manager)
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END
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February 03, 2023 06:34 ET (11:34 GMT)
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