Proposal for voluntary winding up

 
TIDMTAR 
 
Third Advance Value Realisation Company Limited 
 
Recommended proposal for voluntary winding up 
 
The Company  has today  posted a  circular to  Ordinary  Shareholders 
convening an Extraordinary General Meeting of the Company, to be held 
at 12.00 noon on 12 March  2009, at which Ordinary Shareholders  will 
be asked  to approve  a resolution  to  wind up  the Company  and  to 
appoint James  Robert  Toynton, of  Grant  Thornton Limited,  as  the 
Liquidator  to  liquidate  the  Company  and  settle  the   Company's 
liabilities. 
 
Under the  Listing  Rules  the  Company is  required  to  obtain  the 
approval of at least 75 per cent. of Ordinary Shareholders voting  at 
a general meeting for the  cancellation of listing which will  follow 
the appointment of the Liquidator. 
 
Background 
 
The Company  was launched  in  December 2005  with the  objective  of 
providing value and  liquidity for shareholders  from a portfolio  of 
investments which were acquired  in exchange for 22,836,717  Ordinary 
Shares and 53,285,673 Preference  Shares, in each  case issued at  GBP1 
per share. The  Company acquired  114 investments  with a  mid-market 
value at acquisition of GBP76.1  million. Since its launch the  Company 
has realised its investments and progressively returned the  proceeds 
to  Shareholders  through  purchases  (including  the  tender   offer 
completed in November 2007), redemptions of shares and dividends. The 
redemption or purchase and cancellation of the Preference Shares  was 
completed on 23  March 2007.  In aggregate the  Company has  returned 
GBP63.2 million to Shareholders  since launch. On  20 January 2009  the 
Company realised its last equity investment. At 13 February 2009  the 
Company had  net assets  of  GBP10.9 million  (comprising cash  and  UK 
Treasury Bills  less provisions  for the  remaining expenses  of  the 
Company and  liquidation costs).  This is  equivalent to  74.84p  per 
Ordinary Share. 
 
The aggregate of the amount  returned to Shareholders and the  latest 
net asset value  is GBP74.1  million. This  is equivalent  to 97.4  per 
cent. of  the initial  gross  assets of  the Company.  The  Directors 
consider that, in the context of the markets prevailing over the life 
of the Company and  the nature of the  investments accepted into  the 
portfolio, this is a very satisfactory outcome for Shareholders. 
 
Following the European Court of Justice ruling on 28 June 2007 in the 
VAT case, brought by JP  Morgan Claverhouse Trust plc in  conjunction 
with the AIC,  concerning VAT  exemption on  management expenses  for 
investment trusts,  the  Manager's  group submitted  a  claim  to  HM 
Revenue & Customs for  recovery of VAT  on management fees  including 
those charged  to  the Company.  The  Manager's group  has  paid  the 
Company GBP265,358, equivalent to 1.82p per Ordinary Share, in  respect 
of the principal amount  relevant to the  Company that the  Manager's 
group has received from HM Revenue & Customs. The Manager's group has 
received interest in  respect of  its entire claim  and is  presently 
calculating the amount of interest on the principal which relates  to 
the Company.  The Manager's  group  has agreed  to pay  the  relevant 
amount to  the  Company.  The  interest payable  to  the  Company  is 
expected to be approximately  GBP20,000, which is  less than 0.15p  per 
Ordinary Share.  No  amount in  respect  of such  interest  has  been 
accrued in the Company's net assets as at 13 February 2009. 
 
At the time of the Company's launch the Directors stated that, at  an 
extraordinary general  meeting to  be held  in the  first quarter  of 
2009, Shareholders would  be invited  to consider the  future of  the 
Company. Now  that  the  Company  has  realised  all  of  its  equity 
investments, the Directors  consider that the  most effective way  of 
returning the remaining  net assets to  Ordinary Shareholders is  for 
the Company to  be wound  up. The Directors  recommend that  Ordinary 
Shareholders vote in favour of the  Proposal to put the Company  into 
liquidation. 
 
Amendment of Articles of Association 
 
The Articles of Association  provide in Article 161  for a two  stage 
process to wind up the Company  requiring the passing of an  ordinary 
resolution at  an extraordinary  general meeting  to be  held in  the 
first quarter of 2009  (and if applicable  at each subsequent  annual 
general meeting of the Company) to  request the directors to wind  up 
the Company  and  the  passing  at a  subsequent  meeting  a  special 
resolution for the voluntary  winding up of  the Company. Given  that 
the Company  has  realised  all  of  its  investments  and  to  avoid 
unnecessary delay and expense the Board proposes to amend Article 161 
to enable the Company to be wound up voluntarily upon the passing  of 
a special resolution in accordance  with section 391 of the  Guernsey 
(Companies) Law, 2008. 
 
Voluntary winding up 
 
The liquidation of the Company,  which will be a solvent  liquidation 
in which all creditors will be paid in full, will involve the passing 
of the Resolution to  approve the liquidation of  the Company and  to 
appoint the Liquidator. The appointment of the Liquidator will become 
effective immediately upon  the passing of  the Resolutions. At  this 
point, the powers  of the  Directors would cease  and the  Liquidator 
would assume  responsibility  for  the liquidation  of  the  Company, 
including the payment of fees, costs and expenses, the discharging of 
the liabilities of the Company and the distribution of the  remaining 
assets. 
 
The Directors have served notice to terminate all material contracts. 
The net asset  value of  GBP10.9 million as  at 13  February 2009  (the 
latest practicable date prior to the publication of this document) is 
stated after  provision for  costs  (including the  fees due  to  the 
Manager) arising  under  such  contracts  and  in  respect  of  their 
termination. The net  asset value  includes the  recovered VAT  noted 
above but not any interest thereon. 
 
The Directors propose  that James Robert  Toynton, of Grant  Thornton 
Limited, be  appointed as  Liquidator. He  has agreed  to accept  the 
appointment in the event that the Resolution is passed. 
 
Estimated net proceeds of the liquidation 
 
As stated  above,  the net  asset  value  per Ordinary  Share  on  13 
February 2009 (the latest practicable  date prior to the  publication 
of this document) was 74.84p. This is calculated after providing  for 
the estimated net  expenses to be  incurred by the  Company prior  to 
liquidation and for the estimated costs of the liquidation. The total 
costs of the Proposal (including the Liquidators costs, tax, advisory 
and regulatory fees and printing)  are estimated to be  approximately 
GBP50,000. If the Company  had been wound up  on that day, an  Ordinary 
Shareholder could have expected to  receive a distribution of  74.84p 
per Ordinary Share, subject to any adjustments made by the Liquidator 
in confirming the assets and liabilities of the Company. 
 
The Liquidator  will  begin the  process  of settling  the  Company's 
liabilities as  soon as  practicable after  the Resolution  has  been 
passed. Subject to the passing of the Resolution, it is expected that 
the Liquidator  will make  an initial  distribution equal  to 80  per 
cent. of the Company's  net assets. It is  expected that the  initial 
distribution will  be  made by  14  April 2009.  A  subsequent  final 
distribution will be made once  all the Company's affairs,  including 
its tax affairs, have been settled and all its liabilities paid. 
 
Under the terms of appointment the  Liquidator will be paid at  their 
normal  rates  until  all  surplus  funds  have  been  realised   and 
distributed to Shareholders.  The Liquidator has  estimated that  the 
total amount payable to him will be GBP17,500 plus disbursements. 
 
Dealings and settlement 
 
It is expected that the register of Ordinary Shareholders will  close 
for transfers of Ordinary Shares at the start of business on 12 March 
2009. Transfers lodged  with the  UK Registration  Agent before  this 
time, accompanied by documents  of title, will  be registered in  the 
normal way. Transfers received  after that time  will be returned  to 
the person  lodging  them  and,  if the  Proposal  is  sanctioned  by 
Ordinary Shareholders, the original holder will receive any  proceeds 
from distributions made by the Liquidator. 
 
The Company has made an application  to the UK Listing Authority  and 
the London Stock Exchange for the  listing of Ordinary Shares on  the 
Official List  and  dealings  on  the London  Stock  Exchange  to  be 
cancelled, subject to the Resolution  being passed, with effect  from 
20 March 2009. It is expected that the listing of Ordinary Shares  on 
the Official List and dealings on  the London Stock Exchange will  be 
suspended at the start of business on 12 March 2009 and, provided the 
Resolution is passed, will be cancelled with effect from the start of 
business on 20 March 2009. The  last date for dealings on the  London 
Stock Exchange on a normal settlement basis is expected to be 6 March 
2009. 
 
Expected timetable 
 
 
                                                                 2009 
Last day for dealings on the London Stock 
Exchange on a normal settlement basis                         6 March 
 
Last time and date for receipt of Forms of     12.00 noon on 
Proxy                                                        10 March 
 
Dealings in Ordinary Shares suspended pending  7.30 a.m. on  12 March 
the result of the Extraordinary General 
Meeting 
 
Register closes                                              12 March 
 
Extraordinary General Meeting of the Company   12.00 noon on 12 March 
 
Proposed cancellation of listing on the                      20 March 
Official List and dealings on the London Stock 
Exchange 
 
Initial distribution to Ordinary Shareholders       By       14 April 
 
 
If any of these times change  an announcement will be made through  a 
Regulatory Information Service. 
 
17 February 2009 
 
 
 
For further information please contact: 
 
 
 
Robert Legget/Ross Courtier          020 7566 5550 
Progressive Value Management Limited 
 
John Webb/Robert Luetchford          020 7490 3788 
Marshall Securities Limited 
 
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