Acencia Share Discussion Threads

[skyship] 10/2/2012 14:45

Thanks to SeekerofValue for finding this one, or at least directing a few of us here having posted it on the SL thread. Looks like another RECP to me - a good & loyal servant that one; and hopefully this will prove to be another one in the same line of business. Also like GLIF I suppose, though I don't hold that one.

A 426k sale @ 79p today - presumably a chunk to be absorbed by the buybacks - another RNS on Monday perhaps...

[skyship] 10/2/2012 13:44

HEADER UPDATE: Feb’16 - Everything changed for ACD shareholders at the end of 2014. Whereas before there had always been the protection of a near-term redemption at the slowly rising NAV; post that redemption there was to be no such protection until the end of 2017. Also, in H2 2015 the debt & high yield markets entered a rabid bear market with the good being laid low with the bad due to Mark-to-Market regulations.

The Circular below lays out the terms for ACD’s continuation post the Feb’16 Tender @ 111.06p
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ACD - Continuation Proposals

CIRCULAR:

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5 September 2014

Introduction

Further to the Company's announcement of 21 August, in which it was noted that plans were being formulated to allow for investors to maintain their investment in the Company after 31 December 2014 (by which date the Company is currently required by its articles of incorporation to have entered into liquidation), the Board of Directors is pleased to announce that those proposals have now been finalised. A circular is being sent today to all Shareholders setting out the full terms of the proposals and convening a General Meeting of the Company on 25 September 2014 at which approval will be sought from Shareholders for implementation of the proposals.

The Proposals

Under the terms of the proposals:

- The Company's articles will be amended to remove the requirement for a winding-up vote to be held this year, and to include a provision that a winding-up vote must instead be held in September 2017 for the Company to be wound up with effect from 31 December 2017

- The continuing vehicle will amend its investment policy and strategy to allow the Manager to run a more high-conviction and concentrated portfolio, and to remove the currency hedging currently employed

- The continuing vehicle will have an amended fee structure, with the performance fee calculated (i) on the basis of a US Dollar per Share NAV rather than a Sterling per Share NAV, (ii) by reference to the lower of NAV and market capitalisation (rather than solely by reference to NAV as at present) and (iii) by reference to a five per cent. compounding hurdle (rather than the current hurdle of three per cent. over the immediately preceding accounting period)

- The continuing vehicle will implement a new discount control policy, adopting a maximum discount target of 5 per cent.; undertaking share buybacks to support this target; and putting forward a continuation vote at each annual general meeting

- Those Shareholders not wishing to maintain their full investment in the ongoing vehicle will be able to tender all or some of their shares for repurchase pursuant to a tender offer which the Company will undertake. The tender price will be the Company's NAV per Share as at 31 December 2014 less 0.05 per cent. of such NAV to reflect a fair contribution to the costs of the proposals

- If more than 78,000,000 of the Company's 114,061,949 Shares in issue are tendered by Shareholders in the tender offer, the Company will instead move straight to a winding-up
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Subsequently, on 12th Feb’15, it was confirmed that 51% of shareholders accepted the Tender and the issued equity was reduced to 55.665m shares.

For a short time the shares traded at a premium to the Tender price, peaking @ 116p in May’15; but thereafter the Debt bear market took its toll on valuations. In £Sterling terms the share price was mercifully cushioned by the strong US$, so the fall of 27.7% from $1.80 in May’15 to $1.30 in Feb’16, translates in Sterling terms to just 19.8% from 116p to 93p.

At the time of this update there is beginning to be talk (Goldman Sachs for one) that the fall in the debt market may have been overdone. If that proves to be the case, then with the Company again facing a wind-up in 22months time, the 14%+ NAV discount will begin to have some attraction.

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