10 December 2014
Crystal Amber Fund Limited
(the "Fund" or the "Company")
Potential placing and proposed new dividend policy
Potential placing
The Board is considering a secondary issue of new ordinary shares in the
Company ("Shares") (the "Placing") to facilitate further investment
opportunities, in the light of the Company's recent performance. By way of
background, the Company delivered a 68.5 per cent NAV total return in the three
year period to 4 December 2014 and a 85.1 per cent. increase in the Share price
over the same period.
Accordingly, the Board, the investment manager and investment adviser believe
that the Fund is appropriately positioned to continue to deliver attractive
returns, through its focus on special situation holdings which are more
dependent upon self-help and active engagement than upon macroeconomic
recovery. Preliminary discussions have therefore been initiated with certain of
the major shareholders regarding the potential to finance further investment
opportunities through a secondary issue of Shares. The Board believes that by
increasing the size of the Fund, it will be able to acquire larger holdings
offering the potential to increase its influence, invest in larger companies
with increased liquidity and help drive down further the Fund's total expense
ratio.
In light of positive feedback from these discussions, the Board has instructed
the Fund's advisers to give consideration to the implementation of the Placing.
The Board intends that any such secondary issue would be priced at a price
equal to at least the prevailing NAV per share. As at 30 November 2014, the NAV
per share was 150.07p, which equated to a market capitalisation of
approximately £113 million. The Board also intends to continue the discount
management policy, through the implementation of the Fund's Share buyback
programme, for the foreseeable future, subject to the Board's discretion and
the requirements of the AIM Rules.
The Fund's advisers intend to discuss the potential for a secondary issue of
Shares with other holders of Shares ("Shareholders") and with potential new
investors and a further announcement in relation to the Placing and the
obtaining of the requisite approval of Shareholders will be made in due course.
Proposed new dividend policy
The Company's dividend policy is to distribute to Shareholders as a dividend a
proportion of the income received from the Company's portfolio holdings, with
the level of dividend receipts therefore expected to vary based on the
composition of the portfolio from time to time. In respect of each of the two
financial years ended 30 June 2014, the Board declared a dividend of 0.5p per
Share.
The dividend policy, however, also states that the Company will in certain
circumstances also have the ability to make distribution payments out of
realised investments if considered to be in Shareholders' interests.
At 30 June 2014, the Company had retained earnings of £41.8 million. In view of
the accumulated realised gains of the Company, the Board has now resolved to
modify the dividend policy such that it now intends to increase the level of
dividends paid to Shareholders with effect from 1 January 2015 for the
foreseeable future. Accordingly, subject to the conditions set out below, the
Board intends to recommend a dividend of 2.5p per Share in respect of the six
months ending 30 June 2015, which will be payable in or around September 2015
and an interim dividend of 2.5p per Share in respect of the six months ending
31 December 2015, making a total of 5p per share for the 2015 calendar year,
which on the basis of the current NAV would represent a dividend yield of
approximately 3.3 per cent. At the time of the declaration of any future
dividend, the Board will take account of the accumulated retained earnings as
well as the unrealised gains and losses at the time.
Before recommending any dividend, the Board will also consider the capital and
cash position of the Company and the impact on such capital and cash by virtue
of paying that dividend. Before paying any dividend, the Board must resolve and
certify that the Company will, immediately after payment, satisfy the solvency
test prescribed by Guernsey Company law.
The projected dividends set out above are intentions only and do not comprise
profit forecasts. There can be no assurance that these intentions can or will
be met and they should not be seen as an indication of the Company's expected
or actual results or returns. Accordingly investors should not place any
reliance on these intentions in deciding whether to invest in or acquire Shares
nor assume that the Company will make any distributions at all.
For further enquiries please contact:
Crystal Amber Fund Limited
William Collins (Chairman)
Tel: 01481 716 000
Sanlam Securities UK Limited - Nominated Adviser
David Worlidge/Simon Clements
Tel: 020 7628 2200
Numis Securities Limited - Broker
Nathan Brown/Hugh Jonathan
Tel: 020 7260 1426
Crystal Amber Advisers (UK) LLP - Investment Adviser
Richard Bernstein
Tel: 020 7478 9080