2012 Continuation Resolution (1088Y)

TIDMDTL

RNS Number : 1088Y

Dexion Trading Limited

24 February 2012

Dexion Trading Limited

2012 Continuation Resolution

Introduction

The Company is today posting a Circular to Shareholders in connection with the 2012 Continuation Resolution.

Over the 12 month period ended 20 February 2012, the Shares traded, on average, at a discount to estimated NAV of 10.33 per cent.. Accordingly, the Board is required under the Articles to propose the 2012 Continuation Resolution within 4 months of the discount floor provision being triggered.

Notice convening the Meeting of Shareholders to be held at 2.00 p.m. on 21 March 2012 is set out in the Circular. At the Meeting an ordinary class resolution will be proposed that the Shares continue in issue.

Rationale for Continuation

The Board believes that the Company has a number of attractive features that support a vote in favour of the 2012 Continuation Resolution, in particular:

-- the Company continues to be a unique offering for investors in the listed hedge fund sector, providing access to a single hedge fund strategy (namely global macro) through a liquid and diversified fund of funds portfolio;

-- investing in global macro via a diversified portfolio of funds has generated low volatility returns and generally performs well during recessionary periods compared to other investment approaches; strategies within global macro are generally agnostic with respect to market direction and portfolios can be repositioned quickly as they are highly liquid; and global macro does not have the same level of market beta associated with some other hedge fund strategies;

-- the Company's total return of 14.48 per cent. over the period from 30 September 2007 (the Company become a feeder fund of Permal Macro on 1 October 2007) to 31 January 2012 is the highest in the London listed funds of hedge funds peer group (source: Dexion Capital);

-- the Company's active stance in managing the discount to NAV through its share buyback policy during 2011; the Board is cognisant of Shareholders' sensitivity to Share price volatility and intends to continue to actively use the Company's share repurchase authority in 2012; and

-- the Company's broad Shareholder communication and investor relations efforts provide a high degree of transparency for investors.

Portfolio redemptions and portfolio liquidity

The Company may currently realise any or all of its holding of class A GBP shares in Permal Macro by giving not less than 20 days' notice to Permal, such notice to expire on any monthly Redemption Date.

Accordingly, given the expected timing of any Redemption Proposal which may be required to be put forward, the Company currently expects that it would be able to realise all or any part of its investment in Permal Macro within approximately 2 months after the closing of a Redemption Proposal and pay redemption monies to Redeeming Shareholders shortly thereafter. By way of example, if a Redemption Proposal closed for acceptance on 28 May 2012, the Company would expect to be able to distribute redemption monies to Shareholders by reference to a 30 June 2012 NAV Calculation Date by the end of July 2012.

Upon any realisation of PMH class A GBP shares by the Company to fund a Redemption Proposal where less than nine months' notice of realisation is given, the Company is required, pursuant to its investment advisory agreement with the Investment Adviser and the Investment Manager, to pay to the Investment Adviser an amount equivalent to thirty three per cent. of the management fees that would otherwise have been payable in respect of the class A GBP shares so realised (at a rate of 2 per cent. per annum) if the full nine months' notice had been given. Such additional fees would be borne solely by Redeeming Shareholders.

Recommendation and voting intentions

Your Board considers that a vote in favour of the 2012 Continuation Resolution to be proposed at the Meeting is in the best interests of Shareholders as a whole. Accordingly, your Board unanimously recommends Shareholders to vote in favour of the 2012 Continuation Resolution.

Your Directors intend to vote (or, as the case may be, procure the voting of) their beneficial holdings in favour of the 2012 Continuation Resolution in respect of their aggregate holding of 337,000 Shares (representing approximately 0.34 per cent. of the Company's issued Shares (excluding Shares held in treasury)).

Further Information

Further details of the indicative nature of any Redemption Proposal to be put forward where the 2012 Continuation Resolution is not passed, together with detailed performance information for the Company, an investment review for 2011 and an investment outlook are set out in the Circular.

The Circular also contains further information which Shareholders should take into consideration in deciding whether to vote for or against the 2012 Continuation Resolution including certain risk factors (which are not intended to be exhaustive) which may be relevant generally and/or to the 2012 Continuation Resolution being passed and/or to a Shareholder electing to redeem Shares pursuant to a Redemption Proposal.

Expected Timetable

 
 Latest time and date for receipt of   2.00 p.m. on 19 March 2012 
  Forms of 
  Proxy for the Meeting 
 Meeting of the Company                2.00 p.m. on 21 March 2012

Enquiries:

 
 Robin Bowie / Ana Haurie     Tel: +44 (0) 20 7832 0900 
  Dexion Capital Plc 
 Carol Kilby                  Tel: +44 (0) 1481 743 940 
  Dexion Capital (Guernsey) 
  Limited 
 Stuart Klein                 Tel: +44 (0) 20 7678 8000 
  RBS Hoare Govett Limited

Terms used in this announcement shall, unless the context otherwise requires, bear the meanings given to them in the Circular dated 24 February 2012.

A copy of the Circular will shortly be submitted to the National Storage Mechanism and will shortly be available for inspection at: www.Hemscott.com/nsm.do

This information is provided by RNS

The company news service from the London Stock Exchange

END

MSCBUGDDXDDBGDS

Dexion Trading (LSE:DTL)
Historical Stock Chart
From Jun 2024 to Jul 2024