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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Vision OP China | LSE:VOC | London | Ordinary Share | GG00B28DJ748 | ORD NPV |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.115 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
TIDMVOC RNS Number : 1113K Vision Opportunity China Fund Ltd 13 April 2010 NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART INTO THE UNITED STATES, CANADA, AUSTRALIA, SOUTH AFRICA OR JAPAN 13 April 2010 Vision Opportunity China Fund Limited (the "Company" or "VOC") Proposals to Enhance Shareholder Value and First Payment under New Distribution Policy Introduction Vision Opportunity China Fund Limited (AIM: VOC.L), the closed-ended fund traded on AIM that seeks promising investments in small and medium enterprises with operations principally within Greater China, is pleased to announce the following initiatives that are designed, collectively, to further improve the liquidity in the trading and rating of VOC's shares and, ultimately, to enhance shareholder value: · introducing a distribution policy which aims to return to shareholders an amount equivalent to between 20% and 50% of the Company's relevant net realisation proceeds achieved in each financial year; · implementing a share buy-back policy; and · moving the Company from AIM up to the London Stock Exchange's Main Market. The Board also announces, subject, inter alia, to shareholder approval at an extraordinary general meeting of VOC to be held on 4 May 2010, a return of capital of 5 cents per share, amounting to $3.31 million in aggregate, which will be paid on Friday, 28 May 2010 to shareholders on the register as at close of business on Friday, 7 May 2010. This payment will be funded through a reduction of share capital and will be taken into account for the purposes of the Company's new distribution policy. It is equivalent to 15.3% of the relevant net realisation proceeds in the current financial year to 31 March 2010 and 1.8% of the net asset value as at 31 March 2010. Background to, and Benefits of, the Proposals Since its admission to AIM in November 2007, VOC has delivered a net asset total return per share of some 191.4% 1which compares with a fall of 24.7% in the MSCI China Index total return over the same period. Notwithstanding this strong investment performance, the Company's shares are trading at a substantial discount to their underlying net asset value (currently 27.7% 2). Since October 2009, the Company has undertaken a number of initiatives to improve its transparency, increase its market profile, broaden and diversify its shareholder base and improve the liquidity in the trading of its shares. These initiatives have led to increased trading in VOC's shares, the introduction of new long-term investors in the Company, a broadening of the shareholder base and a narrowing of the discount from its low in July 2009 of more than 46%. Following discussions with its advisers and shareholders, the Board believes that the proposals outlined in this announcement are a natural progression in the Company's development and that the potential benefits of the proposals include: · the introduction of transparent distribution and share buy-back policies; · the use of share buy-backs to enhance value for ongoing shareholders; · improving VOC's market profile and visibility, particularly amongst UK-based institutions, private wealth managers and other investors; · continuing to broaden and diversify VOC's shareholder base; · further enhancing liquidity in VOC's shares; · subject to the satisfaction of certain eligibility criteria3, the potential for the Company's shares to qualify for FTSE Index inclusion in due course (such inclusion should generate additional buy-demand from index-tracking investors); and · the prospect of an improved rating in the Company's shares. Accordingly, the Board believes that the proposals will build on VOC's strong investment performance and provide long-term benefits to shareholders. 1 From 27 November 2007 to 31 March 2010, based on an issue price of $0.944 2 Based on the latest net asset value per share (being $2.752 as at 31 March 2010) published by the Company through a Regulatory Information Service and the mid-market share price at the close of business on 31 March 2010 3 Including establishing a sterling-denominated price on SETS for the Company's shares and sustaining the recent improvement in the liquidity in the trading of the Company's shares. Distribution Policy The Board has decided to introduce a distribution policy which will aim to return to shareholders an amount equivalent to up to 50%, and not less than 20%, of VOC's relevant net realisation proceeds achieved in each financial year. For this purpose, the "relevant net realisation proceeds" will be, in each financial year, 80% of the net realisation proceeds, being the proceeds on realisation of investments during that year less the original acquisition costs of the realised investments and any other expenses directly attributable to the acquisition or realisation of such investments. The remaining 20% of such net realisation proceeds takes account of the potential performance allocation that the Company's investment manager may be entitled to. The Directors will have discretion to determine the mechanics to be used on each occasion an amount is to be returned to shareholders in accordance with the distribution policy. Potential mechanics include, but are not limited to, a return of share capital (such as that announced today), a B share scheme (giving shareholders an element of choice over whether they receive income or capital for tax purposes), buying back shares through the market or a tender offer. In determining the quantum, mechanics and timing of any return to shareholders of an amount equivalent to the relevant net realisation proceeds in accordance with the distribution policy, the Directors will have regard, in particular (but not limited), to: · the Company's cash flow, working capital requirements, cash balances and new investment opportunities; · the amount available to be returned to shareholders in accordance with the distribution policy; · the Company's free float; and · legal and regulatory restrictions. The amounts returned to shareholders in respect of each financial year will fluctuate and there may be financial years in which there are no relevant net realisation proceeds. In accordance with the new distribution policy, the Board announces that, subject, inter alia, to shareholder approval, the Company will make a return of capital of 5 cents per share, amounting to $3.31 million in aggregate, which will be paid as follows: · ex date: Wednesday, 5 May 2010; · record date: Friday, 7 May 2010; and · pay date: Friday, 28 May 2010. This return of capital, which will be funded through a reduction of share capital, is equivalent to 15.3% of the relevant net realisation proceeds in the current financial year to 31 March 2010 and 1.8% of the net asset value as at 31 March 2010. The return of capital will be paid in sterling and calculated based on the rate of exchange as at 3.00 p.m. on Wednesday, 5 May 2010. To enable the return of capital to be made, it is necessary, inter alia, to pass a special resolution to reduce VOC's share capital and to authorise the proposed capital return at an extraordinary general meeting of the Company. The Company will post a circular to shareholders convening that extraordinary general meeting for 10.00 a.m. on 4 May 2010 shortly. Share Buy-back Policy At the annual general meeting held on 10 February 2010, the Company renewed its general authority to buy back up to 15% of its issued share capital for cash through the market (the "Buy-back Authority"). The maximum price payable by the Company for a share bought back pursuant to the Buy-back Authority is the latest net asset value per share published by the Company through a Regulatory Information Service. Although, to date, the Company has not used its general authority to buy back shares through the market, the Directors believe that share buy-backs are a useful mechanism for the long-term capital management, including discount management, of an investment company and can benefit ongoing shareholders. Accordingly, the Directors intend to use the Buy-back Authority when they consider it to be in the interests of continuing shareholders to do so. Factors that the Board will take into account when considering when to use of the Buy-back Authority include: · the potential enhancement to shareholder value by buying back shares at a discount to their underlying net asset value; · the Company's cash flow, working capital requirements and new investment opportunities; · the amount that may be available for distribution in accordance with the distribution policy described above; · the Company's free float; · liquidity in the Company's shares; and · legal and regulatory restrictions, including the express safe harbour introduced by the EU Directive on Insider Dealing and Market Manipulation which, if complied with, protects against the possible commission of market abuse. Consistent with the Listing Rules of the Financial Services Authority applicable to companies listed on the London Stock Exchange's Main Market, the Directors have decided that the maximum price that the Company will pay for any shares bought back pursuant to the Buy-back Authority will be the higher of: · 105% of the average of the middle market quotations of VOC's shares for the five business days prior to the date of the market purchase; and · the higher of the price of the last independent trade in VOC's shares and the highest current independent bid for VOC's shares. The Company will announce, through a Regulatory Information Service, any on-market purchases on the business day following the purchase. Any shares purchased pursuant to the Buy-back Authority will be cancelled. The Buy-back Authority will expire at the next annual general meeting of the Company or, if earlier, the date which is 18 months after the date on which the resolution granting the Buy-back Authority was passed. The Directors intend to renew the Buy-back Authority at each annual general meeting of the Company. Premium Listing on the London Stock Exchange's Main Market The Company intends to apply for admission to trading on the London Stock Exchange's Main Market for listed securities. It is currently envisaged that, subject to receiving the necessary regulatory and shareholder approvals, admission will occur before 30 September 2010. Canaccord Adams will act as VOC's sole sponsor and broker to the listing. City Code Under Rule 9 of the City Code on Takeovers and Mergers (the "City Code"), when a person acquires, whether by a series of transactions over a period of time or not, an interest (as defined in the City Code) in shares which (taken together with shares in which persons acting in concert with them are interested) carry 30% or more of the voting rights of a company to which the City Code applies, such person is normally required by the Panel to make a general offer to the holders of any class of equity share capital of that company (whether voting or non-voting) and also to the holders of any class of transferable securities carrying voting rights issued by that company to acquire their shares or other securities. Rule 9 of the City Code ("Rule 9") also provides that any person, together with persons acting in concert with them, who is interested in shares which in aggregate carry not less than 30% but do not hold more than 50% of the voting rights of a company to which the City Code applies will be unable, without the Panel's consent, to acquire, either individually or together, any interest in any other shares which increases the percentage of shares carrying voting rights in which they are interested without being required to make a general offer to the holders of any class of equity square capital of that company (whether voting or non-voting) and also to the holders of any class of transferable securities carrying voting rights issued by that company to acquire their shares or other securities. Under Rule 37.1 of the City Code, when a company purchases its own voting shares, any resulting increase in the percentage of shares carrying voting rights in which a person or group of persons acting in concert (a "Concert Party") is interested will be treated as an acquisition for the purpose of Rule 9. A person not acting, or presumed to be acting, in concert with any one or more of the directors will not normally incur an obligation to make a mandatory offer under Rule 9 if, as a result of the purchase of its own shares by a company, they come to exceed the percentage limits set out in Rule 9, but the Panel should be consulted in all such cases. However, this exception will not normally apply when a person (or any relevant members of a group of persons acting in concert) not acting, or presumed to be acting, in concert with any one or more of the directors has acquired an interest in shares at a time when they had reason to believe that such a purchase of its own shares by the company would take place. As at 9 April 2010 (being the latest practicable date prior to this announcement), funds managed by City of London Investment Management Limited ("City of London") owned 19,731,332 shares, representing 29.8% of the Company's issued share capital. As a result of the share buy-back policy that the Company is proposing to implement, City of London could end up holding an interest in 30% or more of the issued share capital of the Company. Following discussions between the Company and the Panel on Takeovers and Mergers (the "Panel"), the Panel has agreed that, under Rule 37.1 of the Code and the notes to that Rule, City of London should be treated as an "innocent bystander" in relation to any increase in its interest in the Company's issued share capital as a result of share buy-backs pursuant to the Buy-back Authority and there will not be any Rule 9 consequences for City of London arising from such share buy-backs. For further information, please contact: Vision Opportunity China Fund Limited Tel: +1 (212) 849 8225 David Benway/Adam Benowitz www.vocfund.com Canaccord Adams Limited Tel: +44 (0)20 7050 6500 Sue Inglis/Guy Blakeney Financial Dynamics Tel: +44 (0)20 7269 7132 Ed Gascoigne-Pees/Ed Berry NOTE TO EDITORS Vision Opportunity China Fund Limited is a closed-ended listed fund traded on AIM. VOC primarily invests directly in listed companies with operations principally within Greater China. Greater China is a collective term for the territories administered by the People's Republic of China, those administered by the Republic of China and Singapore. This information is provided by RNS The company news service from the London Stock Exchange END MSCUOVARROASAAR
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