Foresight VCT PLC Foresight Vct Plc : Dividend Declaration

 
TIDMFTV 
 
 
   Foresight VCT plc ("the Company") 
 
   Planned Exit Shares fund and Infrastructure Shares fund - Final 
Dividends 
 
   The Company was launched in 1997 through an issue of ordinary shares and 
has raised funds on multiple occasions since launch. Currently, the 
Company has three separate share classes: ordinary shares of 1p each 
("Ordinary Shares"), planned exit shares of 1p each ("Planned Exit 
Shares") and infrastructure shares of 1p each ("Infrastructure Shares"). 
Each separate share class, subject to Company level requirements, has 
its own strategy and is managed separately with the fund (comprising the 
assets and liabilities) of each separate share class being referred to 
as the "Ordinary Shares fund", the "Planned Exit Shares fund" and the 
"Infrastructure Shares fund". 
 
   The Ordinary Shares fund is an evergreen fund with a general venture 
capital investment policy aiming to provide investors with attractive 
returns from a portfolio of investments in fast growing unquoted UK 
companies. The Ordinary Shares fund represents the significant 
proportion of the assets of the Company. 
 
   The Planned Exit Shares fund and the Infrastructure Shares fund were 
launched in 2010 and 2011 respectively and each have been in the process 
of being wound down as further explained below. 
 
   Planned Exit Shares fund Update 
 
   The Planned Exit Shares fund was launched with the objective of 
investing in opportunities which provided more predictable investment 
returns than VCTs had traditionally offered, with a particular emphasis 
on opportunities with environmental benefits (e.g. renewable 
energy/recycling). The strategy was to realise all investments and 
distribute a minimum of 110p per Planned Exit Share before the sixth 
anniversary of the final closing date of the original offer (this being 
June 2016). 
 
   The majority of the investments within the Planned Exit Shares fund were 
realised by June 2016 with the proceeds being returned to holders of 
Planned Exit Shares through the payment of dividends. The remaining 
investments were disposed of in the following 12 months, resulting in 
the fund as at 30 June 2017 consisting wholly of cash and an entitlement 
to consideration held in escrow in respect of the sale of holdings in 
Trilogy Communications Holdings Limited to be released in 2019 and 
subject to reduction in relation to any tax claims ("Trilogy 
Entitlement"). 
 
   The Board decided that it was in the best interests of the holders of 
Planned Exit Shares to seek to realise this Trilogy Entitlement to 
enable a final return to be made as soon as possible (and then complete 
the removal of the Planned Exit Shares), in accordance with the original 
objective of the Planned Exit Shares fund, rather than waiting until 
2019 and continuing to incur the ongoing costs. 
 
   A number of options were pursued in relation to realising the Trilogy 
Entitlement in order to turn the Planned Exit Shares fund fully into 
cash. It was decided to transfer the Trilogy Entitlement to the Ordinary 
Shares fund in exchange for a cash payment (the Ordinary Shares fund 
already having a similar consideration entitlement arising from the sale 
of its former holdings in Trilogy Communications Holdings Limited). The 
transfer, completed on 6 December 2017, was at GBP265,712 on the basis 
of an independent valuation (this being a 14% premium to the carrying 
value of the Trilogy Entitlement as at 30 June 2017 but at a 14% 
discount to the amount which might be received in 2019 if there are no 
reductions). The transfer resulted in the assets of the Planned Exit 
Shares fund being fully in cash. 
 
   Planned Exit Share Final Dividend 
 
   After taking into account all expected remaining costs and expenses of 
the Planned Exit Shares fund (including normal ongoing expenses and 
costs relating to realising investments, the payment of a final dividend 
and the removal of the Planned Exit Shares), the Board has today 
declared a dividend of 7.71p per Planned Exit Share, payable to holders 
of Planned Exit Shares on the register as at 22 December 2017 and to be 
paid on 29 December 2017 ("Planned Exit Share Final Dividend"). This 
will be the final amount to be returned to the holders of Planned Exit 
Shares. 
 
   This Planned Exit Share Final Dividend will bring the total return on a 
Planned Exit Share to 82.71p (ignoring any tax reliefs). 
 
   The final outcome for investors in the Planned Exit Shares fund is far 
from that anticipated at its inception. The reasons have been summarised 
in previous annual reports during the life of the fund. Both the Board 
and Foresight Group CI Limited ("Manager") recognise that the return 
will represent poor overall performance and regret that this is 
significantly behind the original target. 
 
   Infrastructure Shares fund Update 
 
   The Infrastructure Shares fund was launched with the objective of 
investing in companies which generate long-term contractual revenues, 
thereby facilitating the payment of regular predictable dividends to 
investors. The intention was to ask holders of Infrastructure Shares 
whether they wished to exit or continue with their holdings after the 
initial five year holding period required to maintain upfront VCT tax 
reliefs. 
 
   For a variety of reasons, including maintenance of VCT status following 
the merger of Foresight 2 VCT plc into the Company, a number of the 
investments in the Infrastructure Shares fund have previously been 
realised. 
 
   Due to changes in the VCT regulations, the Infrastructure Shares fund 
could not make any new infrastructure investments in accordance with its 
investment strategy. The Board, therefore, wrote to the holders of 
Infrastructure Shares in April 2017 with a request for their expression 
of wishes as to whether they would like to realise their investment 
after the end of the initial five year holding period or continue with 
an investment by converting their holdings into Ordinary Shares. Of 
those holders of Infrastructure Shares who responded, 88.3% expressed 
the wish to realise their holdings. 
 
   The Board, therefore, concluded that the balance of the investments 
within the Infrastructure Shares fund should be realised as soon as 
possible and the proceeds returned to holders of Infrastructure Shares 
(and then the removal of the Infrastructure Shares be completed). 
 
   After offering the Infrastructure Shares fund assets on the open market, 
the sale of all investments has now been completed, realising GBP28.3m 
against a cost of GBP22.1m and a valuation as at 30 June 2017 of 
GBP24.8m. Five of the non-solar infrastructure investment assets were 
sold to funds managed by Equitix Investment Management Limited. The 
three solar investments assets and the remaining three non-solar 
infrastructure investment assets were sold to other funds managed by the 
Manager and Foresight Group LLP on the basis of an independent 
valuation. As a result, the Infrastructure Shares fund is also now fully 
represented as cash. 
 
   Infrastructure Share Final Dividend 
 
   Taking into account all expected remaining costs and expenses of the 
Infrastructure Shares fund (including normal ongoing expenses and costs 
relating to realising investments, the payment of a final dividend and 
the removal of the Infrastructure Shares, as well as the performance fee 
payable to Foresight Group LLP referred to below), the Board has today 
declared a dividend of 93.05p per Infrastructure Share ("Infrastructure 
Share Final Dividend"), payable to holders of Infrastructure Shares on 
the register as at 22 December 2017 and to be paid on 29 December 2017. 
This will be the final amount to be returned to the holders of 
Infrastructure Shares. 
 
   This Infrastructure Share Final Dividend will bring the total return on 
an Infrastructure Share to 115.05p (ignoring any tax reliefs and after 
the payment of performance incentive fees). The performance of the 
Infrastructure Shares fund has triggered a performance fee payable to 
Foresight Group LLP of GBP863,142 in accordance with the performance 
incentive arrangements entered into at the time of launch of the fund. 
 
   Additional Information 
 
   The expected costs and expenses of the Planned Exit Shares fund and the 
Infrastructure Shares fund have been estimated in order to calculate the 
Planned Exit Share Final Dividend and the Infrastructure Share Final 
Dividend. Should the normal ongoing expenses of the funds, plus the 
costs and expenses of completing the realisation of investments within 
the funds and the costs of removing the Planned Exit Shares and the 
Infrastructure Shares, be greater than the amount estimated, the Manager 
has agreed to meet these by way of a reduction in its future fees 
relating to the Ordinary Shares fund so that remaining holders of 
Ordinary Shares are not materially affected. 
 
   Following the payment of the Final Dividends there will be no value 
remaining in the Planned Exit Shares and Infrastructure Shares. The 
Board will, therefore, shortly be putting proposals to Shareholders to 
complete the removal of both share classes and a further announcement 
will be made. 
 
   Further Information 
 
   For further information please contact: 
 
   Gary Fraser 
 
   Foresight Group LLP 
 
   Company Secretary 
 
   Tel: [phone] 
 
   This announcement is distributed by Nasdaq Corporate Solutions on behalf 
of Nasdaq 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: Foresight VCT PLC via Globenewswire 
 
 
  http://www.foresightgroup.eu/ 
 

(END) Dow Jones Newswires

December 15, 2017 10:25 ET (15:25 GMT)

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