Investment Policy

 

TIDMPEJR 
 
RNS Number : 5215B 
Prospect Epicure J-REIT Val Fd PLC 
28 October 2009 
 

 
 
28 October 2009 
 
Prospect Epicure J-REIT Value Fund PLC 
 
(the "Company") 
 
The Company announces its investing policy pursuant to Rule 8 of the AIM Rules 
for Companies. 
 
 
 
Investment Policy 
 
 
........................................................................................................ 
 
 
Investment Objective 
 
 
Following the approval of shareholders at an extraordinary general meeting on 23 
July 2009, the Company is now a realisation company and its investment objective 
is to realise assets on behalf of the Company in a manner designed to preserve 
as much value as possible for shareholders. 
 
 
Assets or Companies in which the Company can invest 
 
 
Given that the Company is now a realisation company, the Company's policy is not 
to make any new investments, but rather to realise assets on behalf of the 
Company. 
 
Whether investments will be active or passive investments 
 
 
Whilst Epicure Managers Japan Limited (the "Manager") and Prospect Asset 
Management, Inc. (the "Investment Adviser") have a mandate to realise assets on 
behalf of the Company, the Investment Adviser will continue to maintain an 
active approach to its investments in a manner designed to preserve as much 
value as possible for shareholders. 
 
 
Holding period for investments 
 
 
Whilst the Manager and Investment Adviser have a mandate to realise assets on 
behalf of the Company, given the daily traded volumes of certain of the 
Company's investments, it is expected that certain of the positions may 
potentially take a number of months to realise, assuming that there is no 
significant change in market conditions or that the Investment Adviser is able 
to realise some or all of the positions with a small number of parties. The 
Investment Adviser will seek to realise the Group's investments through sales in 
the market. In addition, the Board, in conjunction with its advisers, may 
explore the possibility of selling all or part of the Group's portfolio to 
institutional buyers as an alternative means of realising value for 
Shareholders. 
 
 
Spread of investments and maximum exposure limits 
 
 
Given that the Company is now a realisation company and the Company's policy is 
not to make any new investments, the Company does not have a policy in relation 
to the spread of its investments or maximum exposure limits per investment. 
 
 
Policy in relation to gearing 
 
 
Given that the Company is now a realisation company with the Manager and 
Investment Adviser having a mandate to realise assets on behalf of the Company, 
the Company does not have a policy in relation to gearing, however following the 
repayment of all outstanding indebtedness in 2008, it is not the Director's 
intention to again borrow funds. 
 
 
Policy in relation to cross-holdings 
 
 
Whilst the Company does not have a formal policy on cross-holdings, given that 
the Company is now a realisation company with a policy to not make any new 
investments, the Company does not currently have any investments in other listed 
or unlisted closed-ended investment funds. 
 
 
Investing Restrictions 
 
 
Given that the Company is now a realisation company, and the Group policy is not 
to make any new investments but rather to realise assets on behalf of the 
Company, the Company does not have a policy on investing restrictions. 
 
 
Returns and Distribution Policy 
 
 
Following the approval of shareholders at an extraordinary general meeting on 23 
July 2009, the Company is now a realisation company and its investment objective 
is to realise assets on behalf of the Company in a manner designed to preserve 
as much value as possible for shareholders. 
 
 
Certain of the Company's constitutional arrangements were amended so as to 
permit a return of capital arising on the disposal of investments to 
shareholders in as orderly manner as possible. It is expected that capital will 
be returned to shareholders over time through ad hoc returns of capital and buy 
backs of ordinary shares through the market. 
 
 
The decision to pay any such returns of capital will be at the sole discretion 
of the board of the Company. Pursuant to the Isle of Man Companies Act 2006, the 
Board may only authorise a return of capital if the Directors are satisfied, on 
reasonable grounds, that the Company will, immediately after such return, 
satisfy the Solvency Test. 
 
 
The decision to make any repurchases of Ordinary Shares will be at the sole 
discretion of the Board and will be subject to the Directors being satisfied, on 
reasonable grounds, that the Company will, immediately after the repurchase, 
satisfy the Solvency Test. 
 
 
The "Solvency Test" is referred to in section 49 of the Isle of Man Companies 
Act 2006, which the Company satisfies if it is able to pay its debts as they 
become due in the normal course of the Company's business and the value of its 
assets exceeds the value of its liabilities. 
 
 
The rate at which returns of capital are paid under the Company's capital return 
scheme and ordinary shares are repurchased under the buy back programme (as set 
out in the Company's circular to shareholders dated 18 June 2009) will depend 
on, in particular, the rate at which the Group's investments are realised. The 
market in Japanese real estate investment trusts ("J-REIT's") is relatively 
illiquid. The Company itself is a holder of relatively less liquid J-REIT 
investments. The illiquidity in the market and in the Company's portfolio means 
that the timing of the realisation process and, therefore, distributions to 
shareholders, is uncertain. The Investment Adviser will seek to realise 
investments as efficiently as possible whilst at the same time seeking to 
maximise value for shareholders on exit. 
 
 
Life of the Company 
 
 
Once substantially all of the Group's investments have been realised, the 
Directors intend to convene an extraordinary general meeting of the Company at 
which a special resolution will be put for the voluntary winding up of the 
Company and the appointment of a liquidator. 
 
 
If this special resolution is passed the winding up of the Company will take 
effect immediately. The liquidator will be appointed to oversee that the 
Company's remaining assets available for distribution on a winding up are 
distributed to Shareholders. The appointed liquidators will set aside sufficient 
assets in a liquidation fund to meet the Company's liabilities. The liquidators 
would also provide in the liquidation fund for a retention, which they consider 
sufficient to meet any contingent and unknown liabilities of the Company. 
 
 
The Company has a number of Singaporean subsidiaries, some of which are not 
currently trading and others which hold investments on behalf of the Group. The 
liquidation process is complex and uncertain and could take in excess of 12 
months. As stated above, risks and uncertainties would apply during the 
liquidation process and the timing and size of any distributions to Shareholders 
are uncertain and will depend on the ongoing costs payable during the 
liquidation and settlement of any unknown or contingent liabilities. The Board 
has commenced the liquidation process for certain of the Singaporean 
subsidiaries which are not currently trading as it is not currently expected 
that these companies will be required to hold positions in J-REIT's for the 
Group in the future. 
Contact: 
+------------------------------------+------------------------------------+ 
| Leonard O'Brien, Director          | [phone]                | 
+------------------------------------+------------------------------------+ 
| Prospect Epicure J-REIT Value Fund |                                    | 
| PLC                                |                                    | 
+------------------------------------+------------------------------------+ 
|                                    |                                    | 
+------------------------------------+------------------------------------+ 
| Andrew Potts                       | [phone]               | 
+------------------------------------+------------------------------------+ 
| Panmure Gordon                     |                                    | 
+------------------------------------+------------------------------------+ 
|                                    |                                    | 
+------------------------------------+------------------------------------+ 
| Curtis Freeze                      | [phone]                    | 
+------------------------------------+------------------------------------+ 
| Prospect Asset Management Inc      |                                    | 
+------------------------------------+------------------------------------+ 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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