Redemption Announcement (4276N)

TIDMDIVA

RNS Number : 4276N

FRM Diversified Alpha Limited

01 September 2011

FRM DIVERSIFIED ALPHA LIMITED

(the "Company")

REDEMPTION ANNOUNCEMENT

1 September 2011

The Company announces that further to the proposals put forward in the Circular filed on 2 June 2009 and approved at the Extraordinary General Meeting held on 29 June 2009, and further to the cash distributions made to Shareholders in September 2009, August 2010 and March 2011, the Board of Directors has resolved to make a further compulsory redemption of Shares.

This resolution has been prompted by the further realisation of certain of the Company's underlying investments and the Board's decision that, in accordance with the managed wind-down of the Company, the available cash be returned to Shareholders as soon as reasonably practicable.

The Board has resolved to pay out GBP3.25 million to Shareholders (representing approximately 48.6 per cent. of the Company's issued share capital based on the Company's Net Asset Value as at 31 July 2011). This represents a figure that the Directors believe maximises the possible return to Shareholders, whilst also accounting for the future liabilities of the Company and its liquidity profile. The Board, together with its advisers, continues to monitor closely the winding down of the Company's investment portfolio and, following this announcement of a further return of capital, is particularly aware of the need to consider the ongoing running costs of the Company compared to the value of its underlying assets. Over recent months, the Board has considered various options regarding the future of the Company and its current view is that consulting Shareholders with a view to placing the Company into members' voluntary liquidation within the foreseeable future is most likely to yield the best outcome for Shareholders as a whole. A further announcement in this regard will be made in due course and the Board anticipates putting a proposal to Shareholders prior to the end of 2011.

The Record Date for participation in this fourth cash distribution shall be 8 September 2011. The Redemption Date shall be on or around 30 September 2011 and the redemption proceeds will be paid in Sterling through CREST or by cheque (at the recipient's risk) within 30 days of the Redemption Date. The Net Asset Value Date for the calculation of the applicable number of shares to be redeemed shall be 31 August 2011. The 31 August 2011 Net Asset Value shall include the costs associated with the redemption, capped at GBP10,000.

Shareholders wishing to participate in the cash distribution are required to complete and return the Redemption Form in accordance with the instructions printed thereon by 3.00 p.m. on 20 September 2011. At the same time as submitting the Redemption Form, Shareholders holding Shares in certificated form should also enclose share certificates representing 55 per cent. of their shareholding as at the time of submission of the Redemption Form. At the same time as submitting the Redemption Form, Shareholders holding their Shares in uncertificated form through the CREST system should transfer 55 per cent. of their Shares in the Company to a CREST escrow account in accordance with the instructions on the Redemption Form.

If Shareholders do not complete and return their Redemption Form and share certificates (or, for CREST Shareholders, transfer the relevant percentage of their shareholding) in accordance with the instructions printed on the Redemption Form, they will not receive redemption proceeds in respect of the compulsory redemption. Any such proceeds will be transferred to an escrow account established by the Company and distributed to such Shareholders only once the respective valid Redemption Form is received by the Company's Registrar, failing which only in the event of a liquidation of the Company.

Copies of the Redemption Form and Circular dated 2 June 2009 are available on the Company's website: www.frmdiversified.com

Unless otherwise defined, terms used in this announcement have the same or equivalent meaning as in the Circular dated 2 June 2009.

The Board of Directors reserves the right at its discretion to extend or bring forward any of the dates referred to in this announcement. Any revised date will be notified to Shareholders by a further announcement through a Regulatory Information Service provider.

Enquiries:

Financial Risk Management Limited

Chris Brierley 020 7968 6136

J.P. Morgan Cazenove

William Simmonds 020 7588 2828

This information is provided by RNS

The company news service from the London Stock Exchange

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