EF Realisation Company Limited Publication of Circular and Notice of EGM (2917A)

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RNS Number : 2917A

EF Realisation Company Limited

10 September 2018

Dissemination of a Regulatory Announcement that contains inside information according to REGULATION (EU) No 596/2014 (MAR), transmitted by BNP Paribas Securities Services.

The issuer is solely responsible for the content of this announcement.

10 September 2018

EF REALISATION COMPANY LIMITED

Recommended Proposals for Winding Up of the Company and an In Specie Distribution of Shares Held in Lonestar Resources US Inc.

Publication of Circular and Notice of Extraordinary General Meeting

The Board of Directors (the "Board") of EF Realisation Company Limited ("EF Realisation" or the "Company") announces that a circular recommending the voluntary winding up of the Company and an in specie distribution of most of the Company's shares in Lonestar Resources US Inc. ("Lonestar") to certain larger Shareholders, specifically those holding at least 75,000 shares in the Company, (the "Shareholder Circular") has today been published and will be posted to Shareholders. The Shareholder Circular also contains notice of an Extraordinary General Meeting ("EGM") of the Company.

The Shareholder Circular will be available on the National Storage Mechanism at www.morningstar.co.uk/uk/NSM and at http://www.ecofin.co.uk/eco/uploads/officialdocs/EF_Realisation_Shareholder_Circular_10Sep2018.pdf

Extraordinary General Meeting

The winding up of the Company and an in specie distribution of the Company's shares in Lonestar to certain larger Shareholders will require Shareholders to vote in favour of Resolutions at an Extraordinary General Meeting of the Company which has been convened for 1:00 p.m. on 24 September 2018 and which will be held at BNP Paribas House, St Julian's Avenue, St Peter Port, Guernsey GY1 1WA. The notice convening the Extraordinary General Meeting and the Resolutions to be put to a vote of Shareholders are set out at the end of the Shareholder Circular.

The Board considers the Proposals to be in the best interests of the Company and Shareholders as a whole. Accordingly, the Board recommends that Shareholders vote in favour of both Resolutions to be proposed at the Extraordinary General Meeting.

Directors, parties affiliated with the Investment Manager, and the largest shareholder, whose beneficial shareholdings in EF Realisation amount in aggregate to 38.2% of EF Realisation Shares in issue, have indicated their intentions to vote in favour of each of the resolutions at the Extraordinary General Meeting.

Summary of the Proposals

Under the Company's Articles, the Board must put a resolution to wind up the Company to a vote of Shareholders by 26 September 2018, being the second anniversary of the Company's listing on the London Stock Exchange. Alternatively, prior to that date the Board could put a resolution to a vote of Shareholders extending the life of the Company by further successive periods of one year. The Board is recommending the voluntary winding up of the Company as the Company has three investments of value; a holding in a NASDAQ-listed US public company, Lonestar, which accounts for approximately 72 per cent of the value of the Company, and holdings in two unquoted investments which are in the process of being sold. As a result, the period of active management of the Company by the Investment Manager has come to an end.

If the resolutions are passed, the Company will be put into voluntary liquidation on 24 September 2018 and a liquidator will be appointed. As soon as practicable, the liquidator will arrange for a pro rata, in specie distribution of most of the Company's shares in Lonestar to Shareholders holding 75,000 or more Shares in the Company ("Qualifying Shareholders"). At the same time, the liquidator will sell those Lonestar shares attributable to Shareholders holding fewer than 75,000 Shares in the Company ("Non-Qualifying Shareholders") for cash and distribute the cash to those Shareholders. Approximately 94.5 per cent of the Company's holding of 4,174,259 shares in Lonestar is attributable to Qualifying Shareholders and 5.5 per cent to Non-Qualifying Shareholders. As a result, the Company expects to sell approximately 240,000 Lonestar shares on behalf of Non-Qualifying Shareholders.

The liquidator will continue the sale processes of the Company's two unquoted investments of value and make cash distributions to Shareholders as and when possible. The Investment Manager expects the amounts to be realised by the sale of these unquoted investments to be in line with the values at which they are carried by the Company.

Based on a Lonestar bid price per share of US$8.94 and foreign exchange rates on the Latest Practicable Date, the impact of the Proposals would be to return to Shareholders an estimated GBP38.7 million or 86.1 pence per Share of value. This is 11% more than the NAV of 77.75 pence per Share on the Latest Practicable Date which reflects the lower expenses that are expected to be incurred in implementing the Proposals than had been allowed for in calculating the NAV as at the Latest Practicable Date.

-- Qualifying Shareholders would receive the equivalent of 64.0 pence per Share, based on the Lonestar bid share price and the exchange rate at the Latest Practicable Date, by way of a distribution of Lonestar Shares as soon as practicable following the EGM to be held on 24 September 2018, and expected cash proceeds equivalent to 22.1 pence per Share over the course of the liquidation as the unquoted investments are realised over the following six months depending on the ultimate realised value of the investments.

-- Non-Qualifying Shareholders would receive 64.0 pence per Share in cash, based on the Lonestar bid price and the exchange rate on the Latest Practicable Date, as soon as practical following the EGM and a further 22.1 pence per Share in cash over the course of the liquidation as the unquoted investments are realised over the following six months depending on the ultimate realised value of the investments.

The liquidation of the Company is expected to be completed by 30 June 2019.

Expected timetable

 
 
 Date of the Shareholder Circular                       10 September 2018 
 Latest time and date for receipt          1.00 p.m. on 20 September 2018 
  of Forms of Proxy or transmission 
  of CREST Proxy Instructions 
  for the Extraordinary General 
  Meeting 
 Suspension of Shares from                 7.30 a.m. on 24 September 2018 
  trading on the London Stock 
  Exchange and suspension of 
  the listing of the Shares 
  on the Specialist Fund Segment 
 Extraordinary General Meeting             1.00 p.m. on 24 September 2018 
 Register closes and Record             close of business on 24 September 
  Date for in specie distribution                                    2018 
  and Shareholder entitlements 
  in respect of the liquidation 
  of the Company 
 In specie distributions to               as soon as practicable after 24 
  Qualifying Shareholders in                               September 2018 
  respect of their pro rata 
  entitlement to Lonestar Shares 
 Cash distributions to Non-Qualifying        as soon as practicable after 
  Shareholders in respect of                            24 September 2018 
  their pro rata entitlement 
  to Lonestar Shares 
 Cancellation of listing                             by 30 September 2018 
 Latest time and date for receipt        close of business on 23 November 
  of DTC application forms from                                      2018 
  Qualifying Shareholders 
 

This announcement does not contain all the information which is contained in the Shareholder Circular. Shareholders should read the Shareholder Circular to make informed decisions. Defined terms used in this announcement have the meanings given in the Shareholder Circular unless the context otherwise requires or they are otherwise defined in this announcement.

For further information, please contact:

   BNP Paribas Securities Services                                                [phone] 

Sarah Hendry

Ecofin Limited [phone]

Christopher Rowland

Elspeth Dick

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September 10, 2018 09:00 ET (13:00 GMT)