Close Enhanced Commodities Fund II Statement re Redemption Payment (6232L)
August 13 2013 - 12:10PM
UK Regulatory
TIDMCED2
RNS Number : 6232L
Close Enhanced Commodities Fund II
13 August 2013
FOR IMMEDIATE RELEASE
CLOSE ENHANCED COMMODITIES FUND II LIMITED (the "Company")
The directors regret to advise that the initial Final
Entitlement announced by RNS dated 14 June 2013 of GBP1.39 was
overstated. The revised Final Entitlement is GBP1.37 per share.
Following discussions with the Company's investment advisor Close
Brothers Asset Management (CBAM) they agreed to give up their
entitlement to the part-pence surplus above GBP1.37 which means a
rounding up of the Final Entitlement to GBP1.378 per share. This
sum was distributed to investors on 8 July 2013.
1. Reason for the shortfall
One of the five Medium Term Note providers, Italian based
Mediobanca SpA have deducted 20% Italian withholding tax on the
surplus excess of the GBP1 initial capital investment. This amounts
to GBP712,000 being 1.57 pence per share.
At their own cost, CBAM engaged Herbert Smith Freehills, a
highly respected London law firm, backed up by a similar Italian
Fund Tax specialist firm of lawyers to investigate the tax
deduction. The legal advice conclusion is that the deduction of
Italian withholding tax has been made correctly.
Investigations continue to be made and we apologise for the
delay in being able to respond more fully. The situation is complex
and it will take time to unravel and determine if there is any
possibility of reclaiming any or all of the Italian tax
deducted.
2. Redemption Value Averaging Reconciliation
Some investors have queried the monthly redemption value
averaging that was announced by the Company on a monthly basis
during the redemption period. Please note that the RNS releases
were estimates calculated by CBAM. The actual final entitlement was
always going to be calculated by JP Morgan which was the
contractual binding value. In discussion with CBAM, the directors
can advise that the issue relates to an "averaging" provision
within the Prospectus of the Fund that provides "for the price of
each MTN being aggregated of the average official closing price of
each Commodity Portfolio on the last Business Day of each month in
the Calculation Period". The basis of the JPM calculation was that
the averaging would be conducted over a 12 month period comprising
13 month end observations. This corresponds with the original Final
Entitlement issued of 139p per share (subject to the amendment
given the withholding tax issue noted in 1 above). After
investigation it appears that during the Calculation Period (the
past 12 months) the monthly RNS price estimates were produced by
CBAM using averaging over 12 month end observations.
We would point out that each RNS feed released stated "This is
not a forecast nor is a reflection of the net asset value per Share
and takes no account of any unforeseen circumstances and is
provided for informational purposes only and should not be relied
upon for investment decisions".
We would also point out that at the end of each RNS feed there
is a second caveat that states "Close Investments Limited accepts
no responsibility or liability for the accuracy of data sourced
from such third parties. All data in this document has been
procured and may have been acted upon by Close Investments Limited
for its own purpose. The results are being made available to you
for information only and incidentally. This data is provided purely
for information purposes only and should not be relied upon".
For further information contact:
Close Brothers Asset Management
Investment Manager
Tel: 02074 264060
Anson Fund Managers Limited
Secretary
Tel: 01481 722260
13 August 2013
END OF ANNOUNCEMENT
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