TIDMALSL
RNS Number : 3342L
Alternative Liquidity Solutions Ltd
03 September 2012
ALTERNATIVE LIQUIDITY SOLUTIONS LIMITED
(The "Company")
(Registered in Guernsey - Number 46912)
Registered Office:
2(ND) FLOOR, REGENCY COURT, GLATEGNY ESPLANADE,
ST PETER PORT, GUERNSEY GY1 3NQ
TELEPHONE: +44 1481 720321
FACSIMILE: +44 1481 716117
E-MAIL: Funds@bfgl.com
For immediate Release 3 September 2012
---------------------- -----------------
Alternative Liquidity Solutions Limited
Update on Run-Off Shares and Estimated Timing of
Distributions
Further to the announcement by Alternative Liquidity Solutions
Limited (the "Company") of its interim results on 29 August 2012,
the Board is hereby providing certain additional information to
shareholders. This information relates to the liquidity profile of
the Company's portfolio and to the anticipated mechanism for
returning capital to those shareholders who elect to receive
Run-Off Shares pursuant to the proposed reconstruction of the
Company and comprises:
1. the expected timing and quantum of redemption proceeds from
Redeemable Funds and distributions to shareholders arising from
these and the Company's free cash;
2. further detail in relation to the valuation of the Long Lock
Funds and Liquidation Share Classes, including the assumptions made
by the Company's independent valuation advisers as to the timing of
realisations of these investments; and
3. clarification of the mechanics for the creation of the
Run-Off Shares and how this interrelates with the Company's
proposed fund raising.
The Company's investment portfolio comprises three categories of
funds:
-- funds which have stated redemption dates (of varying length
and frequency) which are currently being honoured at the managers'
stated net asset values ("Redeemable Funds");
-- funds which were established as closed ended entities with
capital returned when the underlying investments of those funds are
realised ("Long Lock Funds"); and
-- funds which were originally open-ended but have become
illiquid and suspended redemptions and have created liquidating
share classes, with capital returned when the underlying
investments are realised and capital distributed ("Liquidation
Share Classes").
The Board engaged independent specialist valuation experts, Time
2 Recover Limited ("T2R"), to assist with the valuation of the
investment portfolio as at 30 June 2012. The table below provides
an analysis of the valuation of the investment portfolio, based on
the Revised Valuation Methodology described in the interim results.
This methodology utilises a present value approach, discounting
expected future recoveries at an appropriate rate, reflecting the
uncertainty over quantum and timeframe of such recoveries:
Investments Expected future Weighted Discount Present
at managers' recovery average rate value
valuations estimated (unaudited)
recovery
period
GBP GBP Years GBP
Redeemable Funds 7,881,392 7,868,387 0.4 20% 7,234,799
Long Lock Funds 6,051,153 6,043,129 3.5 20% 3,122,355
Liquidation Share
Classes 1,494,727 1,440,955 1.8 30% 900,818
Total 15,427,272 15,352,471 11,257,972
============== ================ ==============
The expected future recoveries and weighted average recovery
periods set out in the table above are based on a detailed
assessment by T2R of each of the Company's underlying portfolio
holdings. This assessment involved qualitative analytic reports on
each underlying investment as well as a quantitative valuation to
capture the time horizon and recovery value of all underlying
investments. The methodology used involves the following
principles:
-- where available, recent transactions by third parties in the
same securities or fund interests;
-- qualitative analytic reports on each underlying fund that
seek to identify materially negative effects and reasons for
impairment;
-- the present value of expected future cash recoveries from
investments, discounted at a rate which the Board believes
sufficiently compensates investors for the illiquidity and risk
associated with the uncertainty of timing and quantum; and
-- the nominal value where fair market value is deemed consistent with the stated NAV.
Shareholders should note that, notwithstanding that the
estimated present values incorporated within the Company's accounts
are considerably more conservative than the valuations provided by
the underlying managers, such figures are only estimates as to the
quantum and timing of recovery on each of the Company's assets.
There can be no assurance that the eventual recovery values will
equal these estimated values, nor any assurance that recoveries
will occur within the estimated timeframes. Actual results,
performance or events may differ materially from those expressed or
implied in these estimates.
1. Estimated distribution timetable of free cash and redemption
proceeds from Redeemable Funds
The table below sets out the Company's cash as at 30 June 2012
net of outstanding capital commitments ("Free Cash"), the Board's
current estimation of the timing of receipts from the Redeemable
Funds and the distributions the Board would anticipate being able
to make to redeeming shareholders from these sources. The table
also shows other estimated future recoveries from the Long Lock
Funds, Liquidating Share Classes and outstanding capital
commitments, the timing of which is not currently known. The
assumptions upon which these estimates are provided are set out
below the table.
Free cash Redemptions Distributions Per share
(GBPm) (GBPm) (GBPm) (p)
---------------------------------- ---------- ------------ -------------- ----------
Cash & Funds where redemptions
have been placed
---------------------------------- ---------- ------------ -------------- ----------
September 2012 3.67 1.98
---------------------------------- ---------- ------------ -------------- ----------
October 2012 1.58
---------------------------------- ---------- ------------ -------------- ----------
November 2012 1.45 (7.28) 20.3
---------------------------------- ---------- ------------ -------------- ----------
December 2012 -
---------------------------------- ---------- ------------ -------------- ----------
January 2013 0.41
---------------------------------- ---------- ------------ -------------- ----------
February 2013 0.40 (1.89) 5.3
---------------------------------- ---------- ------------ -------------- ----------
March 2013 0.07
---------------------------------- ---------- ------------ -------------- ----------
April 2013 0.29
---------------------------------- ---------- ------------ -------------- ----------
May 2013 0.40 (0.89) 2.5
---------------------------------- ---------- ------------ -------------- ----------
June 2013 -
---------------------------------- ---------- ------------ -------------- ----------
July 2013 0.86
---------------------------------- ---------- ------------ -------------- ----------
August 2013 0.40 (1.47) 4.1
---------------------------------- ---------- ------------ -------------- ----------
September 2013 -
---------------------------------- ---------- ------------ -------------- ----------
Total - Cash & Redeeming
Funds 3.67 7.86 32.2
---------------------------------- ---------- ------------ -------------- ----------
Other expected recoveries
- uncertain timing
---------------------------------- ---------- ------------ -------------- ----------
Cash reserved for uncalled
commitments 1.19
---------------------------------- ---------- ------------ -------------- ----------
Long Lock Funds 6.04
---------------------------------- ---------- ------------ -------------- ----------
Liquidation Funds 1.44
---------------------------------- ---------- ------------ -------------- ----------
Total - Recoveries with
Uncertain Timing 8.68 - - 24.2
---------------------------------- ---------- ------------ -------------- ----------
The following assumptions have been made compiling the
distribution timetable:
A. The redemption terms of the underlying Redeemable Funds are
honoured in full and no additional gating or suspension of
redemptions is imposed
B. Amounts are based on the valuation of the underlying fund
holdings and prevailing exchange rates as at 30 June 2012 and are
therefore subject to fluctuations in valuation based on underlying
manager performance and foreign currency movements.
C. The first capital return will be made in November 2012 and
thereafter will be made quarterly to the extent that there is
sufficient cash to justify a distribution.
D. No distributions are assumed from Long Lock Funds or
Liquidating Share Classes, although in practice the Board expects
that redemption proceeds will continue to be received and will be
distributed.
Shareholders should note in relation to the estimates provided
in the distribution timetable above the reservations as to the
quantum and timing of expected future recoveries previously
expressed. Shareholders should also note that the Board reserves
the right in its absolute discretion to change the indicated
distribution timetable and to alter the quantum of future
distributions. Consequently no assurance can be given that
distributions will be made, either as to quantum or timing, in
accordance with this timetable,
2. Recovery assumptions for the Long Lock Funds and Liquidation Share Classes
The timing of recoveries from the Long Lock Funds and
Liquidation Share Classes is uncertain. However, for the purposes
of arriving at the estimated present fair value of these funds as
set out in the interim accounts for the period ended 30 June 2012,
the following assumptions have been made on the quantum and timing
of recoveries for each of the underlying holdings:
Investments Expected Weighted Discount Present
at managers' future recovery average rate value (unaudited)
valuation estimated
recovery
period
-------------------------- --------------- ------------------ ----------- --------- -------------------
Long- Lock Funds
-------------------------- --------------- ------------------ ----------- --------- -------------------
Apollo European
Principal Finance GBP2,759,546 GBP2,759,546 3.26 20% GBP1,521,979
-------------------------- --------------- ------------------ ----------- --------- -------------------
Ffenics GBP1,207,654 GBP1,207,654 2.42 20% GBP776,856
-------------------------- --------------- ------------------ ----------- --------- -------------------
OCM European
Principal Opportunities
Fund GBP2,045,200 GBP2,037,655 5.14 20% GBP797,780
-------------------------- --------------- ------------------ ----------- --------- -------------------
SISU Capital GBP38,753 GBP38,273 2.18 20% GBP25,740
-------------------------- --------------- ------------------ ----------- --------- -------------------
Sub-Total GBP6,051,153 GBP6,043,129 3.50 20% GBP3,122,355
-------------------------- --------------- ------------------ ----------- --------- -------------------
Liquidation Shares
Classes
-------------------------- --------------- ------------------ ----------- --------- -------------------
ADM Gladius GBP132,910 GBP126,264 1.69 30% GBP80,956
-------------------------- --------------- ------------------ ----------- --------- -------------------
Cognis GBP50,487 GBP19,418 1.13 30% GBP14,439
-------------------------- --------------- ------------------ ----------- --------- -------------------
Fortelus Special
Stiatuions (SPV) GBP452,619 GBP452,619 3.39 30% GBP186,069
-------------------------- --------------- ------------------ ----------- --------- -------------------
Ironshield Special
Situations Side
Pocket GBP300,068 GBP300,008 1.13 30% GBP223,116
-------------------------- --------------- ------------------ ----------- --------- -------------------
Kind Street Europe
Side Pocket GBP163,159 GBP155,001 1.13 30% GBP115,252
-------------------------- --------------- ------------------ ----------- --------- -------------------
OCM European
Credit Opportunities
Fund GBP29,534 GBP29,475 2.80 30% GBP14,123
-------------------------- --------------- ------------------ ----------- --------- -------------------
Tisbury Europe GBP9,295 GBP5,949 0.56 30% GBP5,130
-------------------------- --------------- ------------------ ----------- --------- -------------------
Trafalgar Discovery GBP5,262 GBP828 1.02 30% GBP634
-------------------------- --------------- ------------------ ----------- --------- -------------------
Trafalgar Kahala
Jet GBP351,394 GBP 351,394 1.13 30% GBP261,101
-------------------------- --------------- ------------------ ----------- --------- -------------------
Sub-Total GBP1,494,727 GBP1,440,955 1.80 30% GBP900,818
-------------------------- --------------- ------------------ ----------- --------- -------------------
3. Mechanics for returning capital to shareholders
As part of the Company's proposed reconstruction, Shareholders
who do not wish to maintain their investment in full in the ongoing
vehicle may elect to have some or all of their Ordinary Shares
redesignated as Run-Off Shares. This election is expected to take
place at or around the same time as the publication of the
prospectus in connection with the proposed Equity Fundraising, and
will in any event take place before the end of October.
Upon redesignation of the Company's share capital, the assets of
the Company will be allocated pro rata between Ordinary
Shareholders and Run-Off Shareholders. Accordingly, any cash
proceeds received from the redemption or liquidation of the
Company's underlying investments will be available on the same pro
rata basis either for distribution to Run-Off Shareholders or for
reinvestment on behalf of continuing Ordinary Shareholders.
If either the Equity Fundraising is not completed in accordance
with its terms on or before 31 December 2012 or the Directors
announce publicly that there is no realistic prospect of the Equity
Fundraising being completed by 31 December 2012, all of the
Ordinary Shares will be automatically redesignated as Run-Off
Shares.
The Run-Off Shares will not be listed in order to keep expenses
to a minimum.
The information contained herein is not an offer of securities
for sale in the United States. Securities may not be offered or
sold in the United States absent registration or an exemption from
registration. Any public offering of securities to be made in the
United States will be made by means of a prospectus that may be
obtained from the issuer or selling security holder and that will
contain detailed information about the company and management, as
well as financial statements.
For further information, please contact:
Jon Macintosh
Saltus Partners LLP
+ 44 20 7499 0200
Harry Stein
FTI Consulting
+44 20 7269 7141
This information is provided by RNS
The company news service from the London Stock Exchange
END
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