TIDMMERI
RNS Number : 6406H
Merian Chrysalis Investment Co. Ltd
26 March 2020
The information contained in this announcement is restricted and
is not for publication, release or distribution in the United
States of America, any member state of the European Economic Area,
Canada, Australia, Japan or the Republic of South Africa.
26 March 2020
Merian Chrysalis Investment Company Limited (the "Company")
Statement relating to COVID-19
This is an update due to the market uncertainty relating to
COVID-19 (Coronavirus). The Company would like to highlight that
against this difficult backdrop its strategy remains unchanged and
the Company is well-positioned at this time, in particular:
-- The Company has no leverage in place and has a strong balance
sheet with approximately GBP65 million of cash, after allowing for
the previously disclosed follow-on investment in Embark Group,
which the Company expects to complete later in Q2 2020;
-- Less than 5% of the portfolio operates in business sectors
most directly exposed to COVID-19, such as travel and leisure;
-- The top six positions in the portfolio (Transferwise,
Starling Bank, Graphcore, Klarna, The Hut Group and Embark)
accounting for ca. 87% of invested NAV, in aggregate continue to
trade robustly versus Merian Global Investors (the "Investment
Adviser") expectations, helped by the fact they are typically
on-line based;
-- The majority of portfolio companies are tech-enabled:
typically operating on cloud based systems, these dispersed
business models are well suited to remote working;
-- The portfolio companies typically have no leverage, or have
substantial balance sheet liquidity, and are often backed by other
well-regarded investors;
-- The Investment Adviser has an active management strategy,
with Board rights and/ or representation in certain cases, and so
is closely engaged with portfolio companies' management and their
strategy;
-- A number of the Company's holdings contain downside
protection and / or liquidity preference structures; and
-- The Investment Adviser has activated its own business
contingency plans and has seen minimal impact on its ability to
transact business as a result.
While there will inevitably be some impact on the business plans
of our key positions, the Investment Adviser's current assessment
is that this is likely to be relatively modest for this group of
companies. All of our investee companies have introduced business
continuity programmes that the Investment Adviser considers
appropriate for their organisations, as well as initial mitigation
strategies.
A number of them have also recently raised capital,
including:
-- Graphcore - January 2020 raise of $150m, leaving a cash position of $300m;
-- Klarna - July 2019 raise of $460m, with a further investment
in March 2020; as of December 2019 CET1 ratio was 28.1%;
-- Starling Bank - February 2020 raise of GBP60m, following a
total of GBP205m raised across 2019, including the CIF award;
-- The Hut Group - December 2019 raise of GBP66m of equity, in
addition to substantial amounts of balance sheet liquidity; and
-- Embark Group - GBP84.5m raised over 2H 2019, leaving the
company in a strong liquidity position.
In addition, Transferwise, Klarna and The Hut Group have proven
profit generating capabilities.
Whilst it is early days in terms of the effects of COVID-19, and
the full impact on trading of our investee companies is impossible
to predict at this time, the Board and the Investment Adviser are
closely monitoring the situation and offering support where needed,
with a view to ensuring that any impact is mitigated wherever
possible.
-ENDS-
For further information, please
contact:
Merian Global Investors:
Amelie Shepherd +44 (0) 20 7332 7500
Liberum:
Gillian Martin / Owen Matthews +44 (0) 20 3100 2000
Maitland Administration (Guernsey)
Limited:
Elaine Smeja +44 (0) 1481 749364
LEI: 213800F9SQ753JQHSW24
A copy of this announcement will be available on the Company's
website at https://www.merian.com/chrysalis/. Neither the content
of the Company's website, nor the content on any website accessible
from hyperlinks on its website for any other website, is
incorporated into, or forms part of, this announcement nor, unless
previously published by means of a recognised information service,
should any such content be relied upon in reaching a decision as to
whether or not to acquire, continue to hold, or dispose of,
securities in the Company.
This announcement may include "forward-looking statements". All
statements other than statements of historical facts included in
this announcement, including, without limitation, those regarding
the Company's financial position, business strategy, plans and
objectives of management for future operations (including
development plans and objectives relating to the Company's products
and services) are forward-looking statements.
Forward-looking statements are subject to risks and
uncertainties and accordingly the Company's actual future financial
results and operational performance may differ materially from the
results and performance expressed in, or implied by, the
statements. These factors include but are not limited to those
described in the formal Prospectus. These forward-looking
statements speak only as at the date of this announcement. The
Company expressly disclaims any obligation or undertaking to update
or revise any forward-looking statements contained herein to
reflect actual results or any change in the assumptions, conditions
or circumstances on which any such statements are based unless
required to do so by the Financial Services and Markets Act 2000,
the Listing Rules or Prospectus Rules of the Financial Conduct
Authority or other applicable laws, regulations or rules.
This announcement is for information purposes only and is not an
offer to invest. All investments are subject to risk. Past
performance is no guarantee of future returns. Prospective
investors are advised to seek expert legal, financial, tax and
other professional advice before making any investment decision.
The value of investments may fluctuate. Results achieved in the
past are no guarantee of future results.
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END
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