BlueCrest BlueTrend Limited Recommended proposals for a voluntary winding up (0111D)

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RNS Number : 0111D

BlueCrest BlueTrend Limited

21 October 2015

BlueCrest BlueTrend Limited

21 October 2015

Recommended proposals for a voluntary winding up of the Company

Introduction

BlueCrest BlueTrend Limited (the "Company") is today posting a Circular to Shareholders in connection with proposals for a voluntary winding up of the Company.

The Company announced on 16 October 2015 that it would be putting forward proposals for its Winding Up. The Company is now writing to Shareholders to convene the EGM on 17 November 2015 at 10.00 a.m., the sole business of which will be to consider a proposal for the Winding Up of the Company (the "Proposal").

Background

The Company launched in March 2012 raising net proceeds of GBP163.4m through the issue of 105.2m Sterling Shares and 94.8m US$ Shares. The Company pursues its investment objective by principally investing its assets in the Feeder Funds, which in turn invest in the Master Funds.

At the Company's launch the Directors instigated a discount control policy under which, subject to sufficient portfolio liquidity, the Company would buy back Shares of a particular class if they trade at a discount of two per cent. or more to the latest published Net Asset Value per Share of the relevant class. Under this policy the price at which Shares are repurchased may be at a discount wider than two per cent. to reflect market volatility.

The Company has actively used its repurchase authority to buy back Shares. However, the ability of the Company to repurchase its Shares during the first half of 2014 was limited both by available cash and Shareholder authority. As a result of these limitations and the challenging environment experienced by systematic trading strategies over recent years, which has triggered a sentiment change for the broader systematic trend following universe, the Sterling Shares were trading at a 7.3 per cent. discount to the latest published NAV per Sterling Share and the US$ Shares were trading at a 5.1 per cent. discount to the latest published NAV per US$ Share, each as at 25 April 2014.

Accordingly the Company put forward proposals for a tender offer in June 2014 for up to 100 per cent. of each class of Share in issue at a two per cent. discount to NAV, less costs (the "Tender Offer"). The Tender Offer resulted in the Company repurchasing 63.7 per cent. of its Sterling Shares and 68.0 per cent. of its US$ Shares. The remaining US$ Shares were subsequently converted into Sterling Shares as they no longer satisfied the "public hands" test set out in Listing Rule 6.1.19(4)R.

Following completion of the Tender Offer, the Company had net assets of c. GBP45m, triggering a continuation vote in early 2015 as its average monthly NAV for each of October, November and December 2014 was less than US$100m. The continuation vote was put to Shareholders in March 2015 and subsequently passed.

The Company has traded at a narrow discount, or premium, during the majority of 2015 and its NAV is up 1.1 per cent. year to-date (as at 9 October 2015, the latest practicable date prior to publication of the Circular); the Shares are up 4.5 per cent. (as at 20 October 2015). In 2014, its NAV total return was 16.4 per cent., following negative performance of -11.4 per cent. in 2013.

However, notwithstanding the Company's improved performance since 2013 and general support for Systematica, the investment manager of the Feeder Funds, and the strategy, investors seeking exposure to a systematic trading strategy continue to have concerns about the size of the Company and also the Share discount volatility.

As at the close of business on 9 October 2015 (the latest practicable date prior to the publication of the Circular) the Company's unaudited estimated Net Asset Value was GBP37.07m (equivalent to a Net Asset Value per Share of GBP1.0508.

In light of uncertainty regarding whether the Company's NAV will increase and given that an absence of such an increase will trigger a further continuation vote in 2016, the Directors believe that it is in Shareholders' best interests to now propose that the Company be wound up voluntarily by voluntary winding up.

Winding Up

It is proposed that the Company be wound up voluntarily by voluntary winding up in accordance with section 391(1)(b) of the Companies Law and that Stuart Gardner of Ernst & Young LLP, Royal Chambers, St Julian's Avenue, St Peter Port, Guernsey GY1 4AF and Patrick Brazzill of Ernst & Young LLP, 1 More London Place, London, SE1 2AF be appointed as joint liquidators of the Company (the "Liquidators"). In addition, it is proposed that the remuneration of the Liquidators be fixed on the basis of the time spent by the Liquidators and members of their staff in attending to matters arising prior to and during the Winding Up. The payment of fees and expenses (other than in respect of accrued fees and expenses) to the Directors will cease from the appointment of the Liquidators and no payments for loss of office will be made.

The Winding Up will commence immediately upon the passing of the Winding Up Resolution to be proposed at the EGM.

If Shareholders vote in favour of the Winding Up Resolution, the Liquidators will set aside sufficient assets in a liquidation fund (the "Liquidation Fund") to meet the Company's liabilities including the costs of the Winding Up. The Liquidation Fund will include a retention fund (the "Retention") which will be set at an amount that the Liquidators consider sufficient to meet any unascertained and unknown liabilities of the Company.

This Retention is currently not expected to exceed GBP25,000. The Retention would be in addition to the costs of the Winding Up as set out in more detail in the section titled "Costs of the Winding Up" below.

In accordance with section 397 of the Companies Law, the Liquidators have a statutory duty to realise the Company's assets and discharge its liabilities before distributing surplus assets to Shareholders. Subject to the Expected Timetable of Events being adhered to in respect of the redemption of the Company's shareholding in the Feeder Funds (the "Redemption") and receipt by the Liquidators of the relevant Redemption proceeds, it is the Liquidators' intention to make an initial distribution to Shareholders by 4 December 2015. Should the Liquidators elect to pay a second and final distribution, the Retention will be retained until such time as the second and final distribution (if any) is paid. The amount and timing of distributions are at the Liquidators' discretion.

Arrangements with the Company's service providers

Assuming the Winding Up Resolution is passed, all arrangements with the Company's service providers will be terminated upon the Company being placed into voluntary winding up or when any services being performed in connection with the Winding Up have been completed. No compensation is payable in connection with the termination of these contracts.

Dealings, settlement and cancellation of listing

The Register will be closed and the Shares disabled in CREST at 5.00 pm on 16 November 2015. The last day for trading in the Shares on the Main Market of the London Stock Exchange for normal settlement (in order to enable settlement prior to the closing of the Register) will be 12 November 2015. As from 13 November 2015, dealings should be for cash settlement only and will be registered in the normal way if the transfer, accompanied by documents of title, is received by the Registrar by 5.00 p.m. on 16 November 2015. Transfers received by the Registrar after 5.00 p.m. on 16 November 2015 will be returned to the person lodging them.

Dealings in Shares on the Main Market of the London Stock Exchange will be suspended at 7.30 a.m. on 17 November 2015, and at the same time, the listing of the Shares on the Official List will be suspended and, subsequently cancelled. Should the Liquidators be appointed, the Shares will no longer be freely transferable without the sanction of the Liquidators.

Shareholders should be aware that, should the Winding Up be implemented, the listing of the Shares on the Official List will then be cancelled with effect from 8.00 a.m. on 11 December 2015.

Costs of the Winding Up

The expenses incurred in relation to the Winding Up (including all printing costs, postage costs, professional advice and the Liquidators' fees) are currently estimated to amount to approximately GBP80,000, or 0.22 pence per Share, which excludes the payment of fees and expenses of the Company's service providers up to the date of the Winding Up in accordance with the terms of their engagement.

Distributions

It is anticipated that the Company will receive Redemption proceeds from the Feeder Funds representing 99.5 per cent. of the Company's holding in such Feeder Funds on 1 December 2015. The costs of the Proposal, and any Retention, will be met out of the balancing 0.5 per cent. of the Company's holdings.

Distributions of cash by the Liquidators pursuant to the Winding Up will take place in the normal course of liquidation and through the usual channels. The amount and timing of distributions is at the Liquidators' discretion. Based on the current timetable, the Liquidators expect to make an initial distribution to Shareholders no later than 4 December 2015. The Liquidators will only be in a position to make a second and final distribution after the conclusion of a creditor notice period, which is generally a period of 3 to 4 weeks following the appointment of the Liquidators. Should any additional creditor claims, of which the Liquidators were not previously aware, arise during the creditor notice period, this may impact on the timing and amount of any such distribution.

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