TIDMRIG
For immediate release on 18 June 2014
CQS RIG FINANCE FUND LIMITED (the "Company")
(a closed-ended investment company incorporated in Guernsey with
registration number 45805)
Recommended Proposals for
Voluntary Liquidation
of the Company
On 20 May 2014 the Company announced that it had been informed by the
Company's largest shareholders, who together hold 65.54 per cent. of the
issued share capital of the Company, that they would support a
shareholder voluntary liquidation of the Company.
The Board confirmed its intention to convene an extraordinary general
meeting ("GM") to consider proposals to cancel its admission to trading
on AIM and thereafter to place the Company into members' voluntary
liquidation, realise the Company's assets and facilitate the return of
available cash to shareholders.
Further to that announcement, the Board has today published a circular
containing a notice convening an EGM, to be held on Wednesday, 16 July
2014 to consider such proposals.
The text of the Expected Timetable and Chairman's letter extracted from
the circular and containing a unanimous recommendation of the Board that
Shareholders vote in favour of the Resolution is set out below.
Expected Timetable
Latest time and date for receipt of Proxy Appointments 10:00 a.m. on 14 July
for the Extraordinary General Meeting* 2014
Closing of the Company's register and Record Date 6:00 p.m. on 15 July
for participation in liquidation distributions 2014
Extraordinary General Meeting and, if approved, the 10:00 a.m. on 16 July
appointment of the Joint Liquidators 2014
Announcement of the result of the Extraordinary General 16 July 2014
Meeting
Suspension of the listing of the Shares 7:00 a.m. on 16 July
2014
Cancellation of the listing of the Shares 7:00 a.m. on 17 July
2014
* Please note that the latest time for receipt of Proxy Appointments in
respect of the Extraordinary General Meeting is 48 hours prior to the
time allotted for the meeting or any adjourned meeting (not taking into
account any part of a day that is not a working day).
All references to time in this document are to the time in London.
Dear Shareholder,
1. Introduction
The Company has today announced proposals for its voluntary winding-up
in accordance with the Companies Law and the cancellation of admission
of its Ordinary Shares to trading on AIM (the "Proposals"). I am writing
to provide you with details of these Proposals, which are subject to
Shareholder approval, and to explain why your Board is recommending that
you vote in favour of the Resolution to be proposed at an extraordinary
general meeting of the Company to be held at 10:00 a.m. on 16 July 2014
(the "Extraordinary General Meeting"). Notice of the Extraordinary
General Meeting is set out at the end of this Circular.
2. Background to the Proposals
Article 129 of the Articles of Incorporation of the Company required the
Directors to propose an ordinary resolution at the Company's 2014 annual
general meeting that the Company continue its investment activities for
a further five year period. The required resolution was duly put to
Shareholders at the Company's annual general meeting on 5 March 2014 and
the Shareholders voted to approve it.
On 20 May 2014, however, your Board announced that it had been informed
by the Company's largest Shareholders CQS (UK) LLP, CQS Asset Management
Limited and CQS Cayman LP, who together hold 65.54 per cent of the share
capital of the Company (either in their own right or on behalf of
certain investment vehicles managed or advised by them), that they would
support a voluntary liquidation of the Company given their concerns over
the small market capitalisation of the Company and the comparatively
high operating costs.
In addition, your Board considers that the current market environment
for investing in offshore rig infrastructure means that it is unlikely
that the Company would be in a position to grow from its current asset
base.
Your Board therefore considers that, for the reasons given above, it
would be in the best interests of Shareholders as a whole for the
Company to be liquidated. The purpose of this Circular is to provide you
with details of the Proposals and to seek your approval.
The Commission has been notified of the Proposals pursuant to Part 5 of
the Rules.
3. Liquidity Profile and Current Portfolio
On 16 June 2014, the Company announced that, as at the close of business
on 13 June 2014, its unaudited estimated Net Asset Value was
GBP35,281,902, which is the equivalent of 36.22p per Share. The
unaudited estimated NAV is comprised of:
-- investments valued at GBP585,680; and
-- cash and cash equivalents valued at GBP34,696,222.
The Manager has advised your Board that it hopes to sell all remaining
investments so that, by the date of the Extraordinary General Meeting,
the Company's assets should be held entirely in cash and cash
equivalents.
The Manager has further estimated that the terminal NAV of the Company,
after deduction of the Joint Liquidators' estimated fees, a Retention of
GBP50,000, any expenses properly incurred by the Joint Liquidators in
connection with the liquidation, and provision for all of the Company's
other liabilities will be GBP35,099,324, equivalent to 36.03p per Share.
This sum will be available for distribution to Shareholders in
accordance with the principles stated at section 5 below. To the extent
that your Board has over-provided for the Company's liabilities, or any
part of the Retention is otherwise unutilised, the Company's remaining
assets will also be distributed to Shareholders in accordance with those
principles.
4. Cancellation OF ADMISSION OF THE ORDINARY SHARES TO
TRADING ON AIM
If the Shareholders vote to approve the liquidation of the Company, it
would not be appropriate for the Company's Ordinary Shares to continue
to be admitted to trading on AIM. Accordingly, the Shareholders are
being asked to approve the Delisting by a majority of not less than 75%
of the votes cast at the Extraordinary General Meeting, as required by
the AIM Rules.
5. The Winding-up and distributions to shareholders
If the Proposals are approved by Shareholders, the proposed Joint
Liquidators of the Company will be appointed. The Joint Liquidators will
wind-up the Company by way of voluntary solvent liquidation in
accordance with the Companies Law.
Following appointment, the Joint Liquidators will provide for the
Company's liabilities including their own fees and expenses and
establish a Retention of an amount they consider appropriate to meet the
Company's estimated costs and expenses whilst in liquidation. It is
expected that the Retention will be GBP50,000. For the avoidance of
doubt, the Retention is a provision for, and not an addition to, the
estimated costs and expenses set out in section 3 above, which include
the fees of the Joint Liquidators and those of the Company's advisers in
connection with the winding-up, as well as other costs and expenses.
The Joint Liquidators may, but shall not be obliged to, make any number
of interim liquidation distributions to those Shareholders appearing on
the register of members as at the Record Date, to be followed by a final
distribution. All distributions will be paid by way of cheques drawn
upon a UK clearing bank posted to the registered addresses of each
Shareholder as at the Record Date. Such payments will be at the sole
risk of the Shareholder concerned.
Given that the Company's net assets are expected to comprise cash and
cash equivalents alone at the point of commencement of the winding-up,
your Board has been informed by the Joint Liquidators that they
currently intend to make an initial distribution to Shareholders of an
amount of GBP35,099,324, equivalent to 36.03p per Share, after
approximately two weeks following the commencement of the winding-up in
order to allow sufficient time for the Joint Liquidators to advertise
for creditor claims.
Once the Joint Liquidators have realised the Company's remaining assets
and made one or more interim liquidation distributions, satisfied the
claims of creditors of the Company and paid the costs and expenses of
the winding-up, it is expected that the Joint Liquidators would make a
final distribution of any distributable net proceeds among the
Shareholders according to their respective rights and interests in the
Company.
Your Board has considered the fact that the distribution of any amount
of less than GBP5 per Shareholder would be likely to be nullified by the
administrative costs of making such distribution. Accordingly, your
Board has resolved that any amount of less than GBP5 that would
otherwise be paid to a Shareholder on an interim liquidation
distribution shall be retained until the next interim liquidation
distribution date, if any, on which it would form part of any amount
payable to the Shareholder that is in excess of GBP5. If, at the date of
the final liquidation distribution, there remains any amount of less
than GBP5 that would otherwise be paid to a Shareholder, your Board has
resolved that such amount will be donated to charity.
Voluntary liquidation commences on the passing of the Resolution. Upon
the appointment of the Joint Liquidators at the Extraordinary General
Meeting, all powers of your Board will cease and the Joint Liquidators
will be responsible for the affairs of the Company until it is wound up.
Subject to the approval of the proposed Resolution by Shareholders,
Michael Salter, Gavin Strachan, Jonathan Gamble and Bruce Appelbaum
intend to resign as Directors at the conclusion of the EGM. In order to
comply with the Companies Law and to facilitate a smooth transfer to the
Joint Liquidators, Mr Trevor Ash will remain as a Director until the
Company is struck off from the Register of Companies, which is expected
to occur three months following the conclusion of the liquidation.
The Management Agreement and the Investment Advisory Agreement
The Management Agreement continues in effect until the Company is wound
up. In view of the Manager's expectation that, by the date of the
Extraordinary General Meeting, the Company's remaining investments will
be sold and its assets will be held entirely in cash and cash
equivalents, the Company will not require the services of the Manager
from the date of the Extraordinary General Meeting if the Resolution is
passed. In that event, the Manager has agreed to waive any fees payable
to it under the Management Agreement with effect from the date of the
Joint Administrators' appointment until the date that the winding-up of
the Company becomes effective, and to procure that the Investment
Advisor shall do the same.
The Investment Advisory Agreement will terminate on written notice from
the Manager (or Investment Adviser) on the termination of the Management
Agreement and the Manager has indicated that it will serve such notice
upon the termination of the Management Agreement. In such circumstances
the Company has no obligation to pay any fees or expenses due to the
Investment Advisor under the Investment Advisory Agreement.
If the Resolution is passed, to the extent that the Company still holds
any investments at the date of the Extraordinary General Meeting, the
Manager has indicated that it is willing to continue to manage the
Company's investment non-cash Portfolio on a discretionary basis in
consideration for a fixed ad-valorem fee only, and to procure that the
Investment Advisor does the same.
The Administration Agreement
On entering liquidation, the Company may terminate the Administration
Agreement with immediate effect by giving written notice to the
Administrator. If the Resolution is approved, the Company will
immediately give written notice to the Administrator and will make
payment to the Administrator of all fees and other moneys that accrued
under the Administration Agreement prior to its termination.
The Sub-Administration Agreement terminates automatically on the
termination of the Administration Agreement and the Company has no
obligation to pay any fees or expenses due to the Sub-Administrator
under the Sub-Administration Agreement.
The Administrator will continue to hold the books and records of the
Company for a period of six years in exchange for a fixed fee of
GBP1,500.
6. Benefits of the Proposals
As stated above, in view of the small market capitalisation of the
Company and its comparatively high operating costs, your Board considers
that the current market environment for investing in offshore rig
infrastructure means that the Company is unlikely to grow from its
current asset base.
Since the Company's asset base is unlikely to grow, your Board considers
the winding-up of the Company and a return of surplus capital to
Shareholders to be in their best interests.
7. The Resolution
The Proposals are the subject of a single Resolution, to be approved by
the Shareholders at the Extraordinary General Meeting.
At the Extraordinary General Meeting, Shareholders will be asked to
approve the following matters pursuant to the Resolution:
(a) the admission of the Company's Ordinary Shares to trading on
AIM be cancelled in accordance with Rule 41 (Cancellation) of the AIM
Rules for Companies (the "Delisting");
(b) the Directors of the Company be and hereby are authorised to
take any and all steps which are necessary or desirable in order to
effect the Delisting;
(c) the Company be wound up voluntarily pursuant to section
391(1)(b) of the Companies (Guernsey) Law, 2008, as amended, and that
John Clacy and Alex Adam of Deloitte LLP be and hereby are appointed as
joint liquidators (the "Joint Liquidators") for the purposes of such
winding-up, including realising and distributing the Company's assets,
and any power conferred on them by law or by this Resolution may be
exercised by them jointly or by either of them alone;
(d) the remuneration of the Joint Liquidators be determined by
reference to the time properly given by them and their staff in
attending to matters prior to and during the winding-up, and they be and
hereby are authorised to draw such remuneration as they may determine
and to pay any expenses properly incurred by them, subject always to any
prior agreement or quotation made between the Company and the Joint
Liquidators;
(e) after 6 years, or (if earlier) on completion of the
liquidation, the Joint Liquidators be and hereby are authorised to
donate any distribution, or part distribution, that has been declared
but remains unclaimed to charity; and
(f) the Company's books and records be held by Kleinwort Benson
(Channel Islands) Fund Services Limited, in its capacity as the
Company's secretary, to the order of the Joint Liquidators for a period
of six years from the date of conclusion of the liquidation.
8. Extraordinary General Meeting
The Proposals are subject to Shareholder approval. Under Part XXII of
the Companies Law, for the Company to be placed into voluntary
liquidation, a special resolution is required to be passed and filed in
the Guernsey Registry. A Notice convening the Extraordinary General
Meeting, to be held at 10:00 a.m. on 16 July 2014 at Dorey Court,
Admiral Park, St Peter Port, Guernsey GY1 2HT, is set out at the end of
this Circular. The Notice includes the full text of the Resolution.
The quorum for the Extraordinary General Meeting will be two
Shareholders present in person or by proxy. If, within half an hour
after the time appointed for the Extraordinary General Meeting (or such
longer period as the chairman of the Extraordinary General Meeting may
think fit to allow), a quorum is not present, or if during the meeting a
quorum ceases to be present, the Extraordinary General Meeting shall
stand adjourned for seven days at the same time and place or to such
other time and place or to such other day and at such other time and
place as your Board may determine and no notice of adjournment need be
given. At the adjourned Extraordinary General Meeting, those
Shareholders who are present in person or by proxy shall be a quorum.
The Notice of Extraordinary General Meeting containing the Resolution is
set out at the end of this Circular. The Resolution is proposed as a
special resolution and, as such, requires approval by at least 75% of
the votes cast by those entitled to vote, whether in person, by proxy or
by corporate representative. If the Resolution is approved, cancellation
is expected to take effect at 7:00 a.m. on 17 July 2014, being a date at
least 20 business days from the date of notification of cancellation as
required by the AIM Rules.
9. Action to be Taken
Whether or not you intend to be present at the Extraordinary General
Meeting, you should ensure that your Proxy Appointment (and any relevant
supporting documentation) is completed in accordance with the
instructions printed thereon and returned to the Company's Registrar,
addressed to Capita Asset Services, PXS 1, 34 Beckenham Road, Beckenham,
Kent BR3 4ZF as soon as possible, but in any event not later than 10:00
a.m. on 14 July 2014.
10. Recommendation
Your Board considers that the Proposals and the Resolution are in the
best interests of the Company and of Shareholders as a whole.
Accordingly, your Board unanimously recommends Shareholders to vote in
favour of the Resolution at the Extraordinary General Meeting as they
intend to do in respect of their beneficial holdings of Shares,
amounting to 213,446 Shares in aggregate, held as follows:
Michael Salter: 88,964
Dr Bruce Appelbaum: 15,000
Gavin Strachan: 109,482
Yours faithfully
Michael Salter
A copy of the circular will be available to view shortly on the
Company's website in accordance with AIM Rule 26: www.cqsrigfinance.com
Enquiries:
Secretary
Kleinwort Benson (Channel Islands) Fund Services Ltd
Tel: +44 (0)1481 710 607
Alastair Moreton/Hannah Young/Darren Vickers
NOMAD and Broker
Westhouse Securities Limited
Tel: +44 (0)20 7601 6118
This announcement is distributed by NASDAQ OMX Corporate Solutions on
behalf of NASDAQ OMX Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the information
contained therein.
Source: CQS Rig Finance Fund Ltd via Globenewswire
HUG#1795611
http://www.cqsrigfinance.com/
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