Rapid Realisations Fund Limited Notice of EGM (4063G)

TIDMRRF

RNS Number : 4063G

Rapid Realisations Fund Limited

06 June 2013

RAPID REALISATIONS FUND LIMITED

("THE COMPANY")

Registered number 47341

PROPOSED CANCELLATION OF ADMISSION TO AIM AND NOTICE OF EXTRAORDINARY GENERAL MEETING ("EGM")

6 June 2013

Rapid Realisations Fund Limited today announces that it is posting a circular to Shareholders convening an extraordinary general meeting at 10.00 a.m. on Thursday 27 June 2013 to seek shareholder approval to cancel the admission of the Company's Shares to trading on AIM. A full copy of the letter to Shareholders contained in the circular is set out below.

The Directors have concluded that:

   --     there is a clear lack of liquidity in the Shares of the Company; 

-- the ability to secure new equity participation or asset disposals at levels which fairly reflect the existing net asset value is significantly undermined by the low share price; and

-- the costs associated with maintaining a listing on AIM are now disproportionate to the value provided by the listing, and management expects savings arising from the Cancellation to amount to at least GBP50,000 per annum.

If the Resolution to approve the Cancellation is passed at the extraordinary general meeting, it is proposed that Cancellation will take effect at 7.00 a.m. on Friday 5 July 2013.

For further information

   James Maxwell/Nick Donovan                 [phone] 

N+1 Singer Advisory LLP

   Rhys Davies                                         [phone] 

RAPID REALISATIONS FUND LIMITED

(a closed-ended investment company incorporated in Guernsey with registration number 47341)

 
 Directors:                  Sarnia House 
  Rhys Davies (Chairman)       Le Truchot 
  Brett Miller              St Peter Port 
  David McHugh                   Guernsey 
                                  GY1 4NA 
 

6 June 2013

To Shareholders

Dear Sir or Madam,

Extraordinary General Meeting - Proposed cancellation of Admission to AIM

Introduction

The Company announced earlier today that it is seeking Shareholder approval to cancel the admission of the Shares to trading on AIM.

The purpose of this document is to:

(a) give you further information about the background to and reasons for the proposed Cancellation and to seek your approval to the Resolution at the Extraordinary General Meeting convened for this purpose. This letter also sets out why the Board believes the proposed Cancellation to be in the best interests of Shareholders as a whole, and also includes a recommendation from the Directors to vote in favour of the Resolution; and

(b) convene an extraordinary general meeting of the Company for the purpose of seeking your approval of the proposed Cancellation.

Your attention is drawn to the recommendation from the Directors, on page 6, that you vote in favour of the Resolution.

If the Resolution to approve the Cancellation is passed at the Extraordinary General Meeting, it is proposed that Cancellation will take effect at 7.00 a.m. on Friday 5 July 2013.

Background

The Company has been quoted on AIM since 2 August 2007. In September 2010 the Shareholders voted in favour of a resolution to implement a revised investment strategy focused on the realisation of value from the Company's assets and return cash to shareholders. Since the adoption of this policy 71.75p per share has been returned to shareholders.

While the Company has continued to make good progress against this investment objective (as reported in the Company's 2012 year end results) successful realisation of value from the last few remaining portfolio companies is proving to be challenging.

The Board remains committed to achieving its strategic goal of value realisation, however does not expect that this will be delivered in the immediate future. Efforts to realise value through sales and refinancing have been hampered by continued operational pressure at the investee company level. This has resulted in a number of write downs to the NAV, the latest being the result of the reduction in carrying value of two of the Company's investments between 31 December 2012 and 31 March 2013, which reduced NAV per share by 1.17p.

Trading in the Company's Shares also remained sporadic for a sustained period of time and the Shares have traded at a sustained discount to NAV. The current share price of 3.25p, being the closing mid-market price on 5 June 2013 (the latest price available prior to publication of this document) is equivalent to a 25.7% discount to the latest published NAV of 4.38p as at 31 March 2013. In addition, the shares seldom trade (the top 5 shareholders account for 61.32% of the issued share capital) and the spread quoted is very wide.

In light of this situation the Board has reviewed the merits of the AIM quotation and concluded that the cost does not justify continued listing on AIM.

Rationale for the Cancellation

The Directors have concluded that a resolution should be put to Shareholders to approve a Cancellation for the following reasons:

   --     There is a clear lack of liquidity in the Shares of the Company; 

-- The ability to secure new equity participation or asset disposals at levels which fairly reflect the existing net asset value is significantly undermined by the low share price; and

-- The costs associated with maintaining a listing on AIM are now disproportionate to the value provided by the listing, and the Board expects savings arising from the Cancellation to amount to at least GBP50,000 per annum.

Process for, and Principal Effects of, the Cancellation

The Directors are aware that certain Shareholders may be unable or unwilling to hold Shares in the event that the Cancellation is approved and becomes effective.

To the extent that Shareholders are unable or unwilling to hold Shares in the Company following the Cancellation becoming effective, such Shareholders should consider selling their interests in the market prior to the Cancellation becoming effective.

Under the AIM Rules the Company is required to give at least 20 clear Business Days' notice of Cancellation. Additionally, Cancellation will not take effect until at least 5 clear Business Days have passed following the passing of the Resolution. If the Resolution is passed at the Extraordinary General Meeting, it is proposed that Cancellation will take effect at 7.00 a.m. on Friday 5 July 2013.

In the event that the Cancellation proceeds, there will be no market facility for dealing in the Shares and no price will be publicly quoted for Shares as from close of business on Thursday 4(th) July 2013. As such, interests in Shares are unlikely to be readily capable of sale and where a buyer is identified, it may be difficult to place a fair value on any such sale.

While there can be no guarantee that Shareholders will be able to sell any Shares, any Shareholder seeking to do so following Cancellation should contact the Company in writing at the registered office of the Company, PO Box 296 Sarnia House, Le Truchot, St Peter Port, Guernsey, GY1 4NA The Company will then be able to advise as to whether the Directors are aware of any prospective buyers for any Shares which the holder thereof wishes to sell at that time.

It is the Board's intention currently to assess at the time of future annual general meetings whether the Company's financial position will enable it to propose a further return of capital, this may provide a further opportunity for Shareholders to realise their investment. There can be no certainty that any further returns of capital by the Company will be made and the Board makes no commitment in this respect.

The Company will continue to post information about the Company on its website www.rapidrealisationsfund.com and will continue to send its Annual Report and Accounts to Shareholders and to hold general meetings in accordance with the applicable statutory requirements and the Company's articles. Shareholders should note that following the proposed Cancellation, the Company will remain subject to the City Code on Takeovers and Mergers. Accordingly, Shareholders will continue to receive the protections afforded by the City Code in the event that an offer is made to Shareholders to acquire their Shares.

Risks associated with retaining an interest in the Company following the Cancellation

The Directors draw to the attention of Shareholders the following factors which should be taken into account in assessing whether or not to retain their interests in Shares in the event that the Cancellation is approved and becomes effective:

-- as indicated above, there will be no market facility for dealing in the Shares and no price will be publicly quoted for Shares. As such, interests in Shares are unlikely to be readily capable of sale and where a buyer is identified, it may be difficult to place a fair value on any such sale;

-- as an unquoted company, it will no longer be subject to the AIM Rules and shareholders will only be able to rely on the protections afforded to minority shareholders under general English law;

-- the Company will no longer be subject to the rules relating to disclosure of interests in Shares set out in the DTR, such that it may be difficult to ascertain the ownership of Shares from time to time;

-- the levels of transparency and corporate governance within the Company are unlikely to be as stringent as for a company quoted on AIM;

-- certain existing or prospective investors may be unwilling to trade or continue to trade in the Company's shares in the event that the Company's Shares are no longer traded on AIM;

The above considerations are non-exhaustive and Shareholders should seek their own independent advice when assessing the likely impact of the Cancellation on them.

Taxation

If you are in any doubt about your tax position, and/or are subject to tax in a jurisdiction other than the UK, you should consult an appropriate independent professional adviser. You should note that following Cancellation the Company's shares will no longer be quoted on AIM or any other public market.

Extraordinary General Meeting

Under the AIM Rules for Companies, it is a requirement that any Cancellation must be approved by not less than 75 per cent. of votes cast by Shareholders in a general meeting. Accordingly the notice of EGM set out at the end of this document contains a special resolution:

(i) to approve the application to London Stock Exchange for cancellation of admission of the Shares to trading on AIM; and

   (ii)         to approve such cancellation. 

The EGM will be held at Sarnia House, Le Truchot, St Peter Port, Guernsey, GY1 4NA commencing at 10.00 a.m. on Thursday 27 June 2013. If approved it is expected that the Cancellation will take effect from 7.00 a.m. on Friday 5 July 2013.

Action to be taken

You will find enclosed with this document a stamped addressed envelope and Form of Proxy for use at the EGM. Whether or not you intend to be present at the EGM in person, Shareholders are requested to complete and sign the Form of Proxy and return it to the offices of Capita Registrars, PXS, 34 Beckenham Road, Beckenham, Kent BR3 4TU as soon as possible and, in any event, not later than 10.00 a.m. on Tuesday 25 June 2013. Unless the Form of Proxy is received by this date and time, it will be invalid. The completion and return of the Form of Proxy will not preclude you from attending the EGM and voting in person if you wish.

Further Information

Copies of this document may be inspected at the Company's registered office during usual business hours on any weekday (Saturdays, Sundays and public holidays excepted) for one month from the date of this document. The document will also be available on the Company's website, www.rapidrealisationsfund.com.

Recommendation

The Directors consider that the Resolution is in the best interests of the Company and the Shareholders as a whole. Accordingly, your Directors unanimously recommend that Shareholders vote in favour of the Resolution to be proposed at the EGM. Damille Investments Limited, of which Brett Miller and Rhys Davies are the executive directors, intends to vote in favour of the resolutions in respect of their 10,000,000 Shares, representing approximately 17 per cent. of the Company's issued Shares.

Yours faithfully

Rhys Davies

Non-Executive Chairman

This information is provided by RNS

The company news service from the London Stock Exchange

END

NOEUVANROSANRAR