Downing Three VCT Net Asset Value(s) And Portfolio Update

 
TIDMDP3F 
 
   Downing THREE VCT plc 
 
   Net Asset Values and Portfolio Update 
 
   LEI: 2138008V2JDU2K6ZHF80 
 
   15 April 2019 
 
   The Company announces that its unaudited Net Asset Values as at 31 
December 2018 are as follows: 
 
 
 
 
               Unaudited    Dividends 
                 NAV at      paid to     Total 
               31 Dec 2018     date      Return 
Share Class      Pence        Pence     Pence 
F Share               28.4       67.0      95.4 
H Share               51.3       25.0      76.3 
 
 
   The performance of the Share classes has been impacted by significant 
issues encountered at three portfolio companies. These are summarised as 
follows: 
 
   Apex Energy Limited 
 
   Apex Energy is the developer of a reserve power generation plant in the 
East Midlands run by a third party operator. There have been several 
material shortcomings in the plant and equipment supplied to the company 
that have severely impacted operations. Work is ongoing to establish 
what steps could result in some recovery of value, including legal 
action against the third party operator. The investment has been reduced 
in value by GBP900,000 per F Share and GBP1.17 million per H Share, 
being 90% of the original cost (equivalent to 8.3p per F Share and 8.7p 
per H Share) 
 
   Hermes Wood Pellets Limited 
 
   Hermes was planning to build, commission and operate a wood pelleting 
plant in Goole, Yorkshire. The anticipated cost of constructing the wood 
pellet manufacturing plant in Goole significantly exceeded the estimates 
which were reviewed in the due diligence and investment process.  Whilst 
the management team believed that these cost over-runs could be 
mitigated, this was not the case and it is unclear whether the project 
remains financially viable.  Management is working to find a solution to 
recover some equity value to shareholders.  As a result, a significant 
shortfall has been created resulting in a valuation write down of 
GBP1.272 million per H Share, being 85% provision against original cost 
(equivalent to 9.5p per H Share). 
 
   Zora Energy Renewables Limited 
 
   Zora Energy is a wood pellet sales and distribution business. To date 
the business has been unable develop at the rate originally planned due 
to supply issues and is unclear now whether this is a viable business. A 
provision of GBP896,000 per H Share has been required, being 90% of 
original cost (equivalent to 6.4p per H Share). Management is exploring 
solutions for the business, including a sale to a third party. 
 
 
 
 

(END) Dow Jones Newswires

April 15, 2019 07:30 ET (11:30 GMT)

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