Net Asset Value Adjustment (unaudited) (9933O)
September 27 2011 - 5:13AM
UK Regulatory
TIDMVEN2
RNS Number : 9933O
Ventus 2 VCT PLC
27 September 2011
Ventus 2 VCT plc
27 September 2011
Further Adjustment to Net Asset Value of Investments in Biomass
Companies (unaudited)
On 6 June 2011, the Company announced that it was recording
write-downs on its investments in three companies building and
operating biomass power plants. The companies were PBM Power
Limited ("PBM"), Sandsfield Heat and Power Limited ("SHPL") and
Twinwoods Heat and Power Limited ("THPL"). The write-downs totalled
GBP2,454,000, with PBM being written down by GBP1,104,000, SHPL
being written down by GBP950,000 and THPL being written down by
GBP400,000. The written-down values, including accrued interest on
mezzanine loan stock, (PBM: GBPnil, SHPL: GBP2,096,000, THPL:
GBP2,045,000) were reflected in the financial statements of the
Company for the year ended 28 February 2011.
For the reasons set out below, the Board believes it is
appropriate at this stage to record write-downs of the remaining
balances of the investments in SHPL and THPL, including the
interest accrued on the mezzanine loan stock. The effect of the
further write-downs of SHPL and THPL is to reduce the Company's NAV
by GBP4,141,000, or 16.87 pence per share.
The financial statements of the Company for the year ended 28
February 2011 outlined the key factors impacting on the valuation
of SHPL and THPL and stated that the valuations were subject to a
high degree of uncertainty. The financial statements also stated
that the validity of the valuation assumptions was dependent on the
completion of renegotiation of contracts and debt finance terms
with third parties which were in progress at the date of
preparation of the financial statements.
Bioflame Limited ("Bioflame"), the technology provider and
contractor for the biomass power plants owned by PBM, SHPL and
THPL, has become insolvent and stopped trading as a result of
withdrawal of support of its principal backer. On 23 September
2011, Bioflame held a meeting with its creditors and shareholders
to consider the appointment of a liquidator. The financial,
technical and operational stability of Bioflame was an important
factor supporting the Company's valuations of SHPL and THPL as at
28 February 2011. Bioflame's ceasing to trade has also resulted in
a suspension of the contract renegotiations referenced above.
The Company's investment manager, Temporis Capital LLP
("Temporis"), is continuing to work with PBM, SHPL and THPL, as
well as with the lending banks to these investee companies and with
external engineering consultants, with a view to developing a plan
for bringing the biomass power plants forward to sustainable
operation. At the present time, the likely outcome of these efforts
is uncertain.
Effective Recovery of GBP530,000 Loaned to PBM Power Limited
The Company disclosed in its financial statements for the year
ended 28 February 2011 that an unsecured loan of GBP530,000 was
made to PBM to fund its operating expenses. This loan was not
approved by the Ventus Investment Committee of Climate Change
Capital Limited (the investment manager at the time) and was
recognised as a realised capital loss in the financial statements
for the year ended 28 February 2011.
In order to reinforce the Company's financial position, Temporis
has agreed to advance GBP530,000 to the Company, interest free.
Temporis has further agreed to rebate to the Company future
management fees amounting to GBP530,000.
Enquiries should be directed to Robin Smeaton at The City
Partnership (UK) Limited on 0131 243 7210.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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