Alternative Liquidity Fund Limited Circular and Notice of General Meeting (2999P)

TIDMALF

RNS Number : 2999P

Alternative Liquidity Fund Limited

06 February 2019

 
                NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN 
               PART, IN OR INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD 
              CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION 
              IN PARTICULAR THE UNITED STATES, CANADA, AUSTRALIA, THE REPUBLIC 
                                  OF SOUTH AFRICA AND JAPAN 
 This announcement is an advertisement and not a prospectus. 
  This announcement does not constitute or form part of, and 
  should not be construed as, any offer for sale or subscription 
  of, or solicitation of any offer to buy or subscribe for, 
  any securities in Alternative Liquidity Fund Limited (the 
  "Company") or securities in any other entity, in any jurisdiction, 
  including the United States, nor shall it, or any part of 
  it, or the fact of its distribution, form the basis of, or 
  be relied on in connection with, any contract or investment 
  decision whatsoever, in any jurisdiction. This announcement 
  does not constitute a recommendation regarding any securities. 
  Any investment decision must be made exclusively on the basis 
  of the final prospectus published by the Company and any supplement 
  thereto. 
                                                                            6 February 2019 
                             ALTERNATIVE LIQUIDITY FUND LIMITED 
                            Registered in Guernsey - Number 60552 
                                     Registered Office: 
                                  Sarnia House, Le Truchot, 
                              St Peter Port, Guernsey, GY1 1GR 
                                  PUBLICATION OF CIRCULAR 
 The Proposals 
 The Board stated in the Company's annual report and accounts 
  for the year to 30 June 2018 that it, together with the Company's 
  investment manager, Warana Capital, LLC, (herein referred 
  to as the "Investment Manager" or "Warana Capital") have been 
  exploring various growth strategies for the Company and the 
  scope of the Company to offer new share classes for illiquid 
  assets and portfolios similar to the Company's current illiquid 
  investment portfolio. 
  The Board is pleased to announce its proposals to introduce 
  a new class of ordinary shares (herein referred to as the 
  "Ordinary Shares") pursuant to an Initial Placing, Offer for 
  Subscription and subsequent Placing Programme the net proceeds 
  of which will be used to invest in a diversified portfolio 
  of illiquid funds, funds of funds and other assets including 
  the new segregated portfolio of the Warana SP Master Fund 
  SPC (herein referred to as the "Warana Master Fund"). As part 
  of these proposals it is intended that the Company's existing 
  ordinary shares will be re-designated as realisation shares 
  (the "Realisation Shares") and the Company's existing assets 
  currently held within its existing portfolio would be attributable 
  to the realisation portfolio (the "Realisation Portfolio") 
  which will be realised as rapidly as possible and the proceeds 
  returned to Realisation Shareholders (the "Proposals"). 
  The Company has today published a circular including notice 
  of an extraordinary general meeting to be held at 9 a.m. on 
  25 February 2019 at Sarnia House, Le Truchot, St Peter Port, 
  Guernsey GY1 1GR (the "EGM") to seek authority from the Company's 
  shareholders for the Proposals (the "Circular"). 
 As part of the Proposals the Board is recommending that: 
 
  --    the Company's investment policy be amended in order 
        to allow the Company to create new share classes for 
        separate investment portfolios and to specifically 
        allow the Company to act as a feeder fund and invest 
        the assets of any of its portfolios either directly 
        or indirectly into master funds (including the Warana 
        Master Fund); 
 
  --    the Company's current articles of association be 
        amended and new articles adopted (the "New Articles") 
        in order to inter alia change the name of the 
        existing ordinary shares to Realisation Shares, to 
        provide for the rights of the new class of Ordinary 
        Shares as well as the Realisation Shares and to 
        extend the continuation vote from being held at the 
        annual general meeting of the Company in 2020 to 2023 
        and then every second year thereafter; 
 
  --    Shareholders approve the disapplication of the 
        pre-emption rights contained in the New Articles so 
        that the Board will have authority to allot and issue 
        up to 100 million new Ordinary Shares pursuant to the 
        Initial Placing and Offer for cash on a non 
        pre-emptive basis; and 
 
  --    Shareholders grant the Board the discretion to buy 
        back up to 14.99 per cent of the Ordinary Shares in 
        issue on the admission of the Ordinary Shares to the 
        UK Listing Authority's official list and to trading 
        on the main market of the London Stock Exchange. 
 In addition, Sunrise Partners Limited Partnership ("Sunrise 
  Partners") and LIM Advisers Limited the manager of the LIM 
  Asia Special Situations Master Fund Limited ("LIM"), both substantial 
  shareholders in the Company, have indicated that they may subscribe 
  for new Ordinary Shares under the Initial Placing and/or the 
  Placing Programme. The further issue of Ordinary Shares to 
  Sunrise Partners and LIM under the Initial Placing and/or the 
  Placing Programme would constitute related party transactions 
  for the purpose of the UK Listing Authority's Listing Rules 
  and accordingly the Company is seeking approval for these transactions 
  from the relevant independent shareholders at the EGM. 
 If the Proposals are approved by shareholders, the Company 
  intends to publish a prospectus, introduce the Initial Placing, 
  Offer for Subscription and subsequent Placing Programme the 
  net proceeds of which will be attributable to the Ordinary 
  Portfolio and will be used to invest in a diversified portfolio 
  of investments in line with the new investment policy, including 
  the Warana Master Fund. The Supplemental Agreement to the 
  Investment Management Agreement, is proposing to introduce 
  the new management fee that will be payable to the Investment 
  Manager in relation to this new Ordinary Portfolio. It will 
  also extend Warana Capital's initial term of management and 
  provide that either party may give to the other not less than 
  12 months' notice to terminate the management arrangements 
  provided that such notice will only be able to be given after 
  the conclusion of the Company's annual general meeting in 
  2023. Under the Investment Management Agreement the initial 
  term currently runs until 30 September 2020. The extension 
  is being proposed to allow the new Ordinary Portfolio enough 
  time to mature and realise its maximum return. The entering 
  into of the Supplemental Agreement to the Investment Management 
  Agreement by the Company 
  will constitute a related party transaction for the purpose 
  of the Listing Rules and accordingly the Company is also seeking 
  approval for this transaction from the relevant independent 
  shareholders at the EGM. 
 If the Proposals become effective, the Realisation Portfolio's 
  strategy will be to realise the underlying assets in the Realisation 
  Portfolio as quickly as possible while also seeking to preserve 
  value. It is not currently intended that the assets held within 
  the Realisation Portfolio will be sold on a fire sale basis. 
  The Company has already made six capital distributions and 
  has announced a seventh in the form of redeemable B shares 
  totalling US$0.20 per existing share. 
  It is unlikely that any new investments will be acquired by 
  the Realisation Portfolio and, as a result of this portfolio 
  going into wind down, it is expected that it will become more 
  concentrated over time as assets are sold. 
  In the event that the Proposals are not approved by the Company's 
  shareholders, the Proposals will not become effective. The 
  Company's existing shares will not be reclassified, the Company 
  will not publish a prospectus and no new Ordinary Shares will 
  be issued nor will it enter into the Supplemental Agreement 
  to the Investment Management Agreement. In such an event, 
  the Company will continue with its existing investment strategy 
  and the Investment Manager may deem that additional capital 
  might be needed to be added to certain assets in order to 
  preserve longer term value. 
 Benefits of the Proposals 
 The Board believes that the Proposals offer the following 
  benefits for the Company's shareholders: 
 
  --    the Company's existing portfolio (to be renamed the 
        Realisation Portfolio) will be realised as rapidly as 
        is optimal and the proceeds returned to the Company's 
        existing shareholders (to be renamed the Realisation 
        Shareholders); 
 
  --    increasing the Company's issued share capital through 
        the Initial Placing, Offer for Subscription and 
        subsequent Placing Programme should result in the 
        fixed costs of the Company being spread over a larger 
        asset base and the ongoing expense ratio in respect 
        of the Company's existing portfolio being lower than 
        would otherwise be the case; 
 
  --    the automatic conversion rights included in the New 
        Articles provide Realisation Shareholders with the 
        potential for higher capital returns over a 
        longer-term recovery period as opposed to a portfolio 
        liquidation driven by size and cost constraints; and 
 
  --    the Proposals provide an improved investment 
        proposition by diversifying the Company's investment 
        base and offering new Ordinary Shareholders exposure 
        to the wide range of assets within the Warana Master 
        Fund with the aim of providing investors with 

        attractive risk-adjusted returns over a multi-year 
        period. 
 Indicative timetable 
 An indicative timetable of principal events is as follows: 
 Event                                                                                      Indicative Timing 
 EGM 
 Latest time and date for receipt of                                                         9 a.m. on 21 February 
  Forms of Proxy for use at the EGM 
 EGM                                                                                        9 a.m. on 25 February 
 Issue of Ordinary Shares under the 
  Initial Placing and Offer 
 Latest time and date for receipt of                                                        11.00 a.m. on 17 April 
  application forms under the Offer 
 Latest time and date for receipt of                                                        3.00 p.m. on 17 April 
  commitments under the Initial Placing 
 Results of Initial Placing and Offer                                                       18 April 
  announced 
 Admission to listing and dealings commence                                                 8.00 a.m. on or around 
  in the Ordinary Shares issued under                                                        23 April 
  the Initial Placing and Offer 
 General 
 In deciding whether or not to vote in favour of the Resolutions 
  at the EGM to implement the Proposals, Shareholders should 
  rely only on the information contained in, and should follow 
  the procedures described in, the Circular. 
 Copies of the Circular will shortly be available for inspection 
  at the National Storage Mechanism which is located at http://www.morningstar.co.uk/uk/nsm.do. 
 Copies of the Circular are also available in electronic form 
  on the Company's website at www.waranacap.com and are available 
  for collection, free of charge, during normal business hours 
  on any working day (Saturday, Sunday and public holidays excepted) 
  until 25 February 2019 from the offices of Dickson Minto W.S., 
  Broadgate Tower, 20 Primrose Street, London EC2A 2EW. 
 For further information please contact: 
 Warana Capital, LLP                                                                      [phone] 
  Tim Gardner                                                                             [e-mail] 
 Praxis Fund Services Limited                                                             [phone] 
                                                                                           [e-mail] 
 Notes: 
 The information contained within this announcement is deemed 
  by the Company to constitute inside information as stipulated 
  under the Market Abuse Regulation (EU) No. 596/2014. Upon the 
  publication of this announcement via a Regulatory Information 
  Service this information is now considered to be in the public 
  domain. 
 This announcement is for information purposes only and does 
  not purport to be full or complete and any decision regarding 
  the Proposals should be made only on the basis of the Circular. 
 Neither the contents of the Company's website nor the contents 
  of any website accessible from hyperlinks on the Company's 
  website (or any other website) is incorporated into, or forms 
  part of, this announcement 
 This announcement may include statements that are, or may be 
  deemed to be, "forward-looking statements". These forward-looking 
  statements can be identified by the use of forward-looking 
  terminology, including the terms "believes", "estimates", "anticipates", 
  "expects", "intends", "may", "will" or "should" or, in each 
  case, their negative or other variations or comparable terminology. 
  All statements other than statements of historical facts included 
  in this announcement, including, without limitation, those 
  regarding the Company's financial position, strategy, plans, 
  proposed acquisitions and objectives, are forward-looking statements. 
 Forward-looking statements are subject to risks and uncertainties 
  and, accordingly, the Company's actual future financial results 
  and operational performance may differ materially from the 
  results and performance expressed in, or implied by, the statements. 
  These forward-looking statements speak only as at the date 
  of this announcement and cannot be relied upon as a guide to 
  future performance. The Company, Warana Capital, LLC, Praxis 
  Fund Services Limited and Dickson Minto W.S. expressly disclaim 
  any obligation or undertaking to update or revise any forward-looking 
  statements contained herein to reflect actual results or any 
  change in the assumptions, conditions or circumstances on which 
  any such statements are based unless required to do so by the 
  Financial Services and Markets Act 2000, the Prospectus Rules 
  of the Financial Conduct Authority or other applicable laws, 
  regulations or rules. 
 
 

LEI: 213800R5CHD76J3LU713

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February 06, 2019 11:48 ET (16:48 GMT)