TIDMALF
RNS Number : 4987A
Alternative Liquidity Fund Limited
23 September 2022
ALTERNATIVE LIQUIDITY FUND LIMITED
Registered in Guernsey - Number 60552
LEI NUMBER 213800R5CHD76J3LU713
Registered Office:
Sarnia House, Le Truchot,
St Peter Port, Guernsey, GY1 1GR
23 September 2022
PUBLICATION OF CIRCULAR
The Board of Alternative Liquidity Fund Limited (the "Company")
announces that it has today published a circular (the "Circular")
in respect of the proposed amendments to the Articles of
Incorporation and Renewal of Share Buyback Authority.
The Circular contains a notice convening an extraordinary
general meeting of the Company to be held on Wednesday 19 October
2022 at 9.00 a.m. at Sarnia House, Le Truchot, St Peter Port,
Guernsey GY1 1GR.
The text of the Chairmans's letter, extracted from the Circular
, is set out below.
A copy of the Circular will be submitted to the National Storage
Mechanism and will shortly be available for inspection at:
https://data.fca.org.uk/#/nsm/nationalstoragemechanism and on the
Company's website: https://alternativeliquidityfund.com/ . We
anticipate that a hard copy will be posted to all shareholders next
week.
Terms used and not defined in this announcement bear the meaning
given to them in the Circular published today.
1 Introduction
In April 2022, the Company announced that Waverton Investment
Management Limited had decided not to proceed with the launch of a
new share class. The Company also announced that it would continue
its existing investment policy and realisation strategy and
continue to be advised by Hindsight Solutions Limited (the
"Investment Adviser") in the execution of that strategy. At the
same time, the Board reported that it would examine the options
available to the Company to accelerate the continuing managed
wind-down of the current portfolio within a specified time frame
and propose to and discuss with Shareholders adopting a designated
realisation date with a view to the eventual formal winding-up of
the Company.
The Board and the Investment Adviser have undertaken a detailed
analysis of the Company's remaining portfolio, including the
current and anticipated liquidity profile of the underlying
investments and the likely timeline of that liquidity. As at 23
September 2022, approximately 87 per cent. of the portfolio's NAV
is represented by three investments in Brazil, all controlled by
Vision Brazil Investments. The Board currently expects that these
investments will become liquid within the next 18 months.
As Shareholders are aware, the majority of the balance of the
investment portfolio (in terms of line items) is held at or close
to zero value. The Board believes that there is no material
advantage to be gained in retaining these assets within the
portfolio any longer. The transfer of such nil or de minimis value
assets can take months if not longer to conclude, during which time
the Company continues to incur costs. The Directors therefore
propose to proceed with the sale of this part of the portfolio
which has realistically little or no value and to complete that
process prior to the Company entering formal voluntary liquidation.
A small number of investments with modest value (for example, the
Company's positions with Autonomy, Galileo, ABAX) may be included
in this portfolio disposal in order to generate a wider number of
third-party bids. To date, the Company has approached several
secondary market potential buyers and has received indications of
interest.
Accordingly, the Directors currently expect that most of the
remaining portfolio will have been sold and the resultant cash
distributed to Shareholders prior to the Company's anticipated
formal orderly winding up. The appointment of a liquidator will
therefore be to deal with any remaining assets, effect any final
payments and to formally close the Company. Further detail on the
appointment of a liquidator and to propose the requisite resolution
to Shareholders for the winding-up of the Company will follow in
due course.
Given the illiquid nature of the Company's remaining
investments, it is difficult to provide certainty over the
timeframe for realisation. However, the Board is aware that
Shareholders will expect some guidance on the expected timeline,
and it is the Directors' current estimate, based on its analysis of
the current and anticipated liquidity profile of the underlying
investments, that the Company will be able to target a solvent
voluntary liquidation date prior to 31 December 2023.
To enable the Company to reduce administrative burdens and,
therefore, to enable the Company to make cost savings during the
realisation process prior to the commencement of its eventual
formal winding-up, the Board is proposing that certain amendments
be made to the Articles to assist the Company in its management of
future communications with Shareholders and in its dealings with
untraced Shareholders and unclaimed dividends and other
distributions.
There are several certificated Shareholders on the Register whom
the Company has been unable to trace or contact. The Investment
Adviser and the Registrar have spent considerable time over the
past six years to trace and speak with Shareholders to update their
contact details, to help them dematerialise their Shares, and to
assist them to collect and bank un-cashed dividend cheques.
Unfortunately, despite considerable endeavours, there remain
approximately twenty certificated Shareholders that the Company has
been unable to contact or trace. Although the Investment Adviser
and Registrar will continue to try and resolve these issues and
reach out to such Shareholders, for the Company to be able to
achieve the intended date for the voluntary liquidation, the Board
is proposing certain changes be made to the Articles to reduce the
time periods following which unclaimed dividends and other
distributions may be treated as forfeited and to give the Company
increased flexibility to sell or purchase Shares held by an
untraced Shareholder. A summary of all the changes proposed to the
Articles is set out in paragraph 2 below.
The Board has always been conscious of the Company's running
costs and as the portfolio becomes smaller and the work involved in
the final stages of the Company's life starts to decrease, the
Board will seek to reduce fees and service provider costs. The
Board and Investment Adviser have examined the possibility of
de-listing the Company immediately. However, the additional
anti-money laundering and KYC-related costs involved substantially
outweigh the exchange-related and regulatory listing fees and offer
no significant costs savings.
The purpose of this document is to provide Shareholders with
details of the Proposals, including the proposed amendments to the
Articles. The notice convening the Extraordinary General Meeting at
which resolutions will be proposed to adopt the amended articles as
the new articles of incorporation of the Company and to renew the
Company's authority to make purchase of its own shares is set out
at the end of this document. This document also explains the
reasons why the Board believes that the Resolutions are in the best
interests of Shareholders as a whole.
2 Amendments to the Articles and renewal of share buyback authority
If Resolution 1 is passed at the EGM, the Articles will be
amended to:
(i) reduce the time after which unclaimed dividends and other
distributions shall be forfeited, and shall revert to the Company,
from seven years after the date of payment, to six months;
(ii) reduce the time after which the Company may start to take
steps to sell the Shares of an untraceable Shareholder, and record
such Shareholder as a creditor of the Company in respect of such
sale proceeds, from 12 years to six months and to provide that the
proceeds of such sale shall be forfeited and will belong to the
Company if no valid claim for such proceeds is received within six
months of the date of sale;
(iii) provide the Company with an alternative process to deal
with the Shares of an untraceable Shareholder, by providing that
the Company is permitted, having taken certain steps prescribed by
the Articles, to purchase those Shares at a price equal to the
market bid price of the Shares at the time of purchase, and to
provide that the aggregate purchase price payable for such Shares
shall be forfeited and will belong to the Company if no valid claim
for the same is received within six months of the date of
purchase;
(iv) permit all future communications from the Company to
Shareholders to be made by electronic means, unless notified
otherwise by a Shareholder in writing.
(v) reflect the admission to trading of the Shares on the Specialist Fund Segment; and
(vi) update for changes in legislation.
A copy of the Articles (containing the full terms of the
amendments proposed to be made) will be available at the venue for
the EGM for at least 15 minutes prior to and during the meeting and
are available during normal business hours (Saturdays, Sundays and
public holidays excepted) at the offices of Stephenson Harwood LLP,
1 Finsbury Circus, London EC2M 7SH until the close of the EGM.
At the Company's annual general meeting held on 8 December 2021,
Shareholders voted in favour of a resolution to authorise the
Directors to make market purchases of Shares. That authority will
expire at this year's annual general meeting. As explained above,
one of the amendments proposed to be made to the Articles to deal
with untraceable Shareholders is to provide a process for the
Company to be able to buy-back those Shares. The Directors are
proposing to renew the Company's share buyback authority at the
EGM, with the authority to expire on 31 December 2023, to support
the amendments being made to the Articles to deal with untraceable
Shareholders in the period through to the eventual liquidation of
the Company. Any Shares bought back pursuant to this authority may
be cancelled or held in treasury.
3 Benefits associated with the Proposals
The Board believes that the Proposals offer the following
benefits to Shareholders:
-- Continuing a managed realisation of assets, including a sale
of a substantial part of the portfolio, rather than placing the
Company in liquidation immediately, is expected to enable the
Company to reduce the eventual costs associated with a
liquidation.
-- The on-going costs and fees of the Company are expected to
reduce during the realisation process as a result of the proposed
changes to the Articles.
-- Addressing Shareholder issues now should aid the liquidation
process in both time and cost.
4 Risks associated with the Proposals
Although Shareholders are only being asked to vote on the
proposed amendments to the Articles and to renew the Company's
share buyback authority and not on the Proposals as a whole,
Shareholders should still have regard to the following:
-- There can be no guarantee that the Board will be able to
realise a substantial part of the remaining portfolio within the
indicated timeline or at all.
-- At the point the Company enters voluntary liquidation, it is
likely to be uncertain how long it will take until full realisation
is achieved. On entering voluntary liquidation, it is expected that
the Company will cease to maintain its admission to the Specialist
Fund Segment, and Shareholders should thereafter no longer expect
to be able to buy and sell Shares through the London Stock
Exchange.
5 Recommendation
The Board considers that the Resolutions are in the best
interests of Shareholders taken as a whole and accordingly
unanimously recommends that Shareholders vote in favour of the
Resolutions to be proposed at the Extraordinary General Meeting.
The Directors who hold Shares intend to vote in favour of the
Resolutions in respect of their own beneficial holdings amounting,
in aggregate, to 100,000 Shares (representing approximately 0.07
per cent. of the Company's issued share capital as at the date of
this document).
For further information, please contact:
Enquiries
Tim Gardner, Hindsight Solutions Limited
Tel. + 44 7917 630 460
Email: timgardner@hindsightsolutions.co.uk
Website: https://alternativeliquidityfund.com/
Sanne Fund Services (Guernsey) Limited
Telephone: (44) 1481 737600
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END
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