CQS Rig Finance Fund Limited Statement Re Publication Of Circular

 
TIDMRIG 
 
 
   For immediate release on 18 June 2014 
 
   CQS RIG FINANCE FUND LIMITED (the "Company") 
 
   (a closed-ended investment company incorporated in Guernsey with 
registration number 45805) 
 
   Recommended Proposals for 
 
   Voluntary Liquidation 
 
   of the Company 
 
   On 20 May 2014 the Company announced that it had been informed by the 
Company's largest shareholders, who together hold 65.54 per cent. of the 
issued share capital of the Company, that they would support a 
shareholder voluntary liquidation of the Company. 
 
   The Board confirmed its intention to convene an extraordinary general 
meeting ("GM") to consider proposals to cancel its admission to trading 
on AIM and thereafter to place the Company into members' voluntary 
liquidation, realise the Company's assets and facilitate the return of 
available cash to shareholders. 
 
   Further to that announcement, the Board has today published a circular 
containing a notice convening an EGM, to be held on Wednesday, 16 July 
2014 to consider such proposals. 
 
   The text of the Expected Timetable and Chairman's letter extracted from 
the circular and containing a unanimous recommendation of the Board that 
Shareholders vote in favour of the Resolution is set out below. 
 
   Expected Timetable 
 
 
 
 
Latest time and date for receipt of Proxy Appointments   10:00 a.m. on 14 July 
 for the Extraordinary General Meeting*                                   2014 
Closing of the Company's register and Record Date         6:00 p.m. on 15 July 
 for participation in liquidation distributions                           2014 
Extraordinary General Meeting and, if approved, the      10:00 a.m. on 16 July 
 appointment of the Joint Liquidators                                     2014 
Announcement of the result of the Extraordinary General           16 July 2014 
 Meeting 
Suspension of the listing of the Shares                   7:00 a.m. on 16 July 
                                                                          2014 
Cancellation of the listing of the Shares                 7:00 a.m. on 17 July 
                                                                          2014 
 
 
   * Please note that the latest time for receipt of Proxy Appointments in 
respect of the Extraordinary General Meeting is 48 hours prior to the 
time allotted for the meeting or any adjourned meeting (not taking into 
account any part of a day that is not a working day). 
 
   All references to time in this document are to the time in London. 
 
   Dear Shareholder, 
 
   1.                  Introduction 
 
   The Company has today announced proposals for its voluntary winding-up 
in accordance with the Companies Law and the cancellation of admission 
of its Ordinary Shares to trading on AIM (the "Proposals"). I am writing 
to provide you with details of these Proposals, which are subject to 
Shareholder approval, and to explain why your Board is recommending that 
you vote in favour of the Resolution to be proposed at an extraordinary 
general meeting of the Company to be held at 10:00 a.m. on 16 July 2014 
(the "Extraordinary General Meeting"). Notice of the Extraordinary 
General Meeting is set out at the end of this Circular. 
 
   2.                  Background to the Proposals 
 
   Article 129 of the Articles of Incorporation of the Company required the 
Directors to propose an ordinary resolution at the Company's 2014 annual 
general meeting that the Company continue its investment activities for 
a further five year period. The required resolution was duly put to 
Shareholders at the Company's annual general meeting on 5 March 2014 and 
the Shareholders voted to approve it. 
 
   On 20 May 2014, however, your Board announced that it had been informed 
by the Company's largest Shareholders CQS (UK) LLP, CQS Asset Management 
Limited and CQS Cayman LP, who together hold 65.54 per cent of the share 
capital of the Company (either in their own right or on behalf of 
certain investment vehicles managed or advised by them), that they would 
support a voluntary liquidation of the Company given their concerns over 
the small market capitalisation of the Company and the comparatively 
high operating costs. 
 
   In addition, your Board considers that the current market environment 
for investing in offshore rig infrastructure means that it is unlikely 
that the Company would be in a position to grow from its current asset 
base. 
 
   Your Board therefore considers that, for the reasons given above, it 
would be in the best interests of Shareholders as a whole for the 
Company to be liquidated. The purpose of this Circular is to provide you 
with details of the Proposals and to seek your approval. 
 
   The Commission has been notified of the Proposals pursuant to Part 5 of 
the Rules. 
 
   3.                  Liquidity Profile and Current Portfolio 
 
   On 16 June 2014, the Company announced that, as at the close of business 
on 13 June 2014, its unaudited estimated Net Asset Value was 
GBP35,281,902, which is the equivalent of 36.22p per Share. The 
unaudited estimated NAV is comprised of: 
 
 
   -- investments valued at GBP585,680; and 
 
   -- cash and cash equivalents valued at GBP34,696,222. 
 
 
   The Manager has advised your Board that it hopes to sell all remaining 
investments so that, by the date of the Extraordinary General Meeting, 
the Company's assets should be held entirely in cash and cash 
equivalents. 
 
   The Manager has further estimated that the terminal NAV of the Company, 
after deduction of the Joint Liquidators' estimated fees, a Retention of 
GBP50,000, any expenses properly incurred by the Joint Liquidators in 
connection with the liquidation, and provision for all of the Company's 
other liabilities will be GBP35,099,324, equivalent to 36.03p per Share. 
This sum will be available for distribution to Shareholders in 
accordance with the principles stated at section 5 below. To the extent 
that your Board has over-provided for the Company's liabilities, or any 
part of the Retention is otherwise unutilised, the Company's remaining 
assets will also be distributed to Shareholders in accordance with those 
principles. 
 
   4.                  Cancellation OF ADMISSION OF THE ORDINARY SHARES TO 
TRADING ON AIM 
 
   If the Shareholders vote to approve the liquidation of the Company, it 
would not be appropriate for the Company's Ordinary Shares to continue 
to be admitted to trading on AIM. Accordingly, the Shareholders are 
being asked to approve the Delisting by a majority of not less than 75% 
of the votes cast at the Extraordinary General Meeting, as required by 
the AIM Rules. 
 
   5.                  The Winding-up and distributions to shareholders 
 
   If the Proposals are approved by Shareholders, the proposed Joint 
Liquidators of the Company will be appointed. The Joint Liquidators will 
wind-up the Company by way of voluntary solvent liquidation in 
accordance with the Companies Law. 
 
   Following appointment, the Joint Liquidators will provide for the 
Company's liabilities including their own fees and expenses and 
establish a Retention of an amount they consider appropriate to meet the 
Company's estimated costs and expenses whilst in liquidation. It is 
expected that the Retention will be GBP50,000.  For the avoidance of 
doubt, the Retention is a provision for, and not an addition to, the 
estimated costs and expenses set out in section 3 above, which include 
the fees of the Joint Liquidators and those of the Company's advisers in 
connection with the winding-up, as well as other costs and expenses. 
 
   The Joint Liquidators may, but shall not be obliged to, make any number 
of interim liquidation distributions to those Shareholders appearing on 
the register of members as at the Record Date, to be followed by a final 
distribution. All distributions will be paid by way of cheques drawn 
upon a UK clearing bank posted to the registered addresses of each 
Shareholder as at the Record Date. Such payments will be at the sole 
risk of the Shareholder concerned. 
 
   Given that the Company's net assets are expected to comprise cash and 
cash equivalents alone at the point of commencement of the winding-up, 
your Board has been informed by the Joint Liquidators that they 
currently intend to make an initial distribution to Shareholders of an 
amount of GBP35,099,324, equivalent to 36.03p per Share, after 
approximately two weeks following the commencement of the winding-up in 
order to allow sufficient time for the Joint Liquidators to advertise 
for creditor claims. 
 
   Once the Joint Liquidators have realised the Company's remaining assets 
and made one or more interim liquidation distributions, satisfied the 
claims of creditors of the Company and paid the costs and expenses of 
the winding-up, it is expected that the Joint Liquidators would make a 
final distribution of any distributable net proceeds among the 
Shareholders according to their respective rights and interests in the 
Company. 
 
   Your Board has considered the fact that the distribution of any amount 
of less than GBP5 per Shareholder would be likely to be nullified by the 
administrative costs of making such distribution. Accordingly, your 
Board has resolved that any amount of less than GBP5 that would 
otherwise be paid to a Shareholder on an interim liquidation 
distribution shall be retained until the next interim liquidation 
distribution date, if any, on which it would form part of any amount 
payable to the Shareholder that is in excess of GBP5. If, at the date of 
the final liquidation distribution, there remains any amount of less 
than GBP5 that would otherwise be paid to a Shareholder, your Board has 
resolved that such amount will be donated to charity. 
 
   Voluntary liquidation commences on the passing of the Resolution. Upon 
the appointment of the Joint Liquidators at the Extraordinary General 
Meeting, all powers of your Board will cease and the Joint Liquidators 
will be responsible for the affairs of the Company until it is wound up. 
Subject to the approval of the proposed Resolution by Shareholders, 
Michael Salter, Gavin Strachan, Jonathan Gamble and Bruce Appelbaum 
intend to resign as Directors at the conclusion of the EGM.  In order to 
comply with the Companies Law and to facilitate a smooth transfer to the 
Joint Liquidators, Mr Trevor Ash will remain as a Director until the 
Company is struck off from the Register of Companies, which is expected 
to occur three months following the conclusion of the liquidation. 
 
   The Management Agreement and the Investment Advisory Agreement 
 
   The Management Agreement continues in effect until the Company is wound 
up. In view of the Manager's expectation that, by the date of the 
Extraordinary General Meeting, the Company's remaining investments will 
be sold and its assets will be held entirely in cash and cash 
equivalents, the Company will not require the services of the Manager 
from the date of the Extraordinary General Meeting if the Resolution is 
passed. In that event, the Manager has agreed to waive any fees payable 
to it under the Management Agreement with effect from the date of the 
Joint Administrators' appointment until the date that the winding-up of 
the Company becomes effective, and to procure that the Investment 
Advisor shall do the same. 
 
   The Investment Advisory Agreement will terminate on written notice from 
the Manager (or Investment Adviser) on the termination of the Management 
Agreement and the Manager has indicated that it will serve such notice 
upon the termination of the Management Agreement. In such circumstances 
the Company has no obligation to pay any fees or expenses due to the 
Investment Advisor under the Investment Advisory Agreement. 
 
   If the Resolution is passed, to the extent that the Company still holds 
any investments at the date of the Extraordinary General Meeting, the 
Manager has indicated that it is willing to continue to manage the 
Company's investment non-cash Portfolio on a discretionary basis in 
consideration for a fixed ad-valorem fee only, and to procure that the 
Investment Advisor does the same. 
 
   The Administration Agreement 
 
   On entering liquidation, the Company may terminate the Administration 
Agreement with immediate effect by giving written notice to the 
Administrator. If the Resolution is approved, the Company will 
immediately give written notice to the Administrator and will make 
payment to the Administrator of all fees and other moneys that accrued 
under the Administration Agreement prior to its termination. 
 
   The Sub-Administration Agreement terminates automatically on the 
termination of the Administration Agreement and the Company has no 
obligation to pay any fees or expenses due to the Sub-Administrator 
under the Sub-Administration Agreement. 
 
   The Administrator will continue to hold the books and records of the 
Company for a period of six years in exchange for a fixed fee of 
GBP1,500. 
 
   6.                  Benefits of the Proposals 
 
   As stated above, in view of the small market capitalisation of the 
Company and its comparatively high operating costs, your Board considers 
that the current market environment for investing in offshore rig 
infrastructure means that the Company is unlikely to grow from its 
current asset base. 
 
   Since the Company's asset base is unlikely to grow, your Board considers 
the winding-up of the Company and a return of surplus capital to 
Shareholders to be in their best interests. 
 
   7.                  The Resolution 
 
   The Proposals are the subject of a single Resolution, to be approved by 
the Shareholders at the Extraordinary General Meeting. 
 
   At the Extraordinary General Meeting, Shareholders will be asked to 
approve the following matters pursuant to the Resolution: 
 
   (a)        the admission of the Company's Ordinary Shares to trading on 
AIM be cancelled in accordance with Rule 41 (Cancellation) of the AIM 
Rules for Companies (the "Delisting"); 
 
   (b)       the Directors of the Company be and hereby are authorised to 
take any and all steps which are necessary or desirable in order to 
effect the Delisting; 
 
   (c)        the Company be wound up voluntarily pursuant to section 
391(1)(b) of the Companies (Guernsey) Law, 2008, as amended, and that 
John Clacy and Alex Adam of Deloitte LLP be and hereby are appointed as 
joint liquidators (the "Joint Liquidators") for the purposes of such 
winding-up, including realising and distributing the Company's assets, 
and any power conferred on them by law or by this Resolution may be 
exercised by them jointly or by either of them alone; 
 
   (d)       the remuneration of the Joint Liquidators be determined by 
reference to the time properly given by them and their staff in 
attending to matters prior to and during the winding-up, and they be and 
hereby are authorised to draw such remuneration as they may determine 
and to pay any expenses properly incurred by them, subject always to any 
prior agreement or quotation made between the Company and the Joint 
Liquidators; 
 
   (e)        after 6 years, or (if earlier) on completion of the 
liquidation, the Joint Liquidators be and hereby are authorised to 
donate any distribution, or part distribution, that has been declared 
but remains unclaimed to charity; and 
 
   (f)        the Company's books and records be held by Kleinwort Benson 
(Channel Islands) Fund Services Limited, in its capacity as the 
Company's secretary, to the order of the Joint Liquidators for a period 
of six years from the date of conclusion of the liquidation. 
 
   8.                  Extraordinary General Meeting 
 
   The Proposals are subject to Shareholder approval. Under Part XXII of 
the Companies Law, for the Company to be placed into voluntary 
liquidation, a special resolution is required to be passed and filed in 
the Guernsey Registry. A Notice convening the Extraordinary General 
Meeting, to be held at 10:00 a.m. on 16 July 2014 at Dorey Court, 
Admiral Park, St Peter Port, Guernsey GY1 2HT, is set out at the end of 
this Circular. The Notice includes the full text of the Resolution. 
 
   The quorum for the Extraordinary General Meeting will be two 
Shareholders present in person or by proxy. If, within half an hour 
after the time appointed for the Extraordinary General Meeting (or such 
longer period as the chairman of the Extraordinary General Meeting may 
think fit to allow), a quorum is not present, or if during the meeting a 
quorum ceases to be present, the Extraordinary General Meeting shall 
stand adjourned for seven days at the same time and place or to such 
other time and place or to such other day and at such other time and 
place as your Board may determine and no notice of adjournment need be 
given. At the adjourned Extraordinary General Meeting, those 
Shareholders who are present in person or by proxy shall be a quorum. 
 
   The Notice of Extraordinary General Meeting containing the Resolution is 
set out at the end of this Circular. The Resolution is proposed as a 
special resolution and, as such, requires approval by at least 75% of 
the votes cast by those entitled to vote, whether in person, by proxy or 
by corporate representative. If the Resolution is approved, cancellation 
is expected to take effect at 7:00 a.m. on 17 July 2014, being a date at 
least 20 business days from the date of notification of cancellation as 
required by the AIM Rules. 
 
   9.                  Action to be Taken 
 
   Whether or not you intend to be present at the Extraordinary General 
Meeting, you should ensure that your Proxy Appointment (and any relevant 
supporting documentation) is completed in accordance with the 
instructions printed thereon and returned to the Company's Registrar, 
addressed to Capita Asset Services, PXS 1, 34 Beckenham Road, Beckenham, 
Kent BR3 4ZF as soon as possible, but in any event not later than 10:00 
a.m. on 14 July 2014. 
 
   10.              Recommendation 
 
   Your Board considers that the Proposals and the Resolution are in the 
best interests of the Company and of Shareholders as a whole. 
Accordingly, your Board unanimously recommends Shareholders to vote in 
favour of the Resolution at the Extraordinary General Meeting as they 
intend to do in respect of their beneficial holdings of Shares, 
amounting to 213,446 Shares in aggregate, held as follows: 
 
   Michael Salter:               88,964 
 
   Dr Bruce Appelbaum:   15,000 
 
   Gavin Strachan:             109,482 
 
   Yours faithfully 
 
   Michael Salter 
 
   A copy of the circular will be available to view shortly on the 
Company's website in accordance with AIM Rule 26: www.cqsrigfinance.com 
 
   Enquiries: 
 
   Secretary 
 
   Kleinwort Benson (Channel Islands) Fund Services Ltd 
 
   Tel: [phone] 
 
   Alastair Moreton/Hannah Young/Darren Vickers 
 
   NOMAD and Broker 
 
   Westhouse Securities Limited 
 
   Tel: [phone] 
 
   This announcement is distributed by NASDAQ OMX Corporate Solutions on 
behalf of NASDAQ OMX Corporate Solutions clients. 
 
   The issuer of this announcement warrants that they are solely 
responsible for the content, accuracy and originality of the information 
contained therein. 
 
   Source: CQS Rig Finance Fund Ltd via Globenewswire 
 
   HUG#1795611 
 
 
  http://www.cqsrigfinance.com/