Result of AGM and Change to Investing Policy
26 Octubre 2009 - 9:43AM
UK Regulatory
TIDMDHIR
RNS Number : 3922B
Dhir India Investments plc
26 October 2009
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Dhir India Investments Plc ("the Company")
Result of Annual General Meeting
And
Change to Investing Policy
Result of Annual General Meeting
The Company is pleased to announce that at the Annual General Meeting of the
Company held today, all resolutions as set out in the notice of the Annual
General Meeting were passed.
Change to Investing Policy
At the Annual General Meeting the shareholders approved amendments to the
Investing Policy of the Company. The revised Investing Policy is set out below:
Investing objective
The Company intends to invest in distressed companies and distressed assets in
India with the objective of providing shareholders with income and capital
growth.
Investing Strategy
The investments will be structured primarily in the following four types of
transaction:
Turnaround of companies
In these transactions, the objective is to acquire an interest in a target
company through its secured debt (and a minority equity interest where
appropriate). The aim will be to benefit from the control taken of the target
company, its operations and its assets and, if appropriate, to change or
motivate existing management and implement a new strategy to turn around the
business.
Target companies will typically be under-performing due to financial,
operational or management constraints and an overhang of debt, but with the
potential for achieving a turnaround through restructuring. In such
transactions, the Manager may arrange to provide the target company with a range
of technical, legal, management and financial inputs, as required.
The Directors believe that exits from such an investment will be achieved
principally through selling the controlling interest in the target company to a
third party or to the target's existing management or via public offering. The
Company intends to work to a time frame of 24-36 months from acquisition to exit
in such transactions.
Re-sale of assets or companies
The objective in these transactions is to obtain benefit from a change in
control of the target company or its assets through the secured debt. The
Company and its subsidiaries (the "Group") will consider acquiring a minority
equity interest in target companies and/or assets but the Company would not
acquire a majority of the equity interest.
The value in such transactions lies in being able to acquire or settle the debts
of the target company at a discount to the market value of the underlying assets
of the business as a whole and then to restructure the debts so as to achieve
the desired return upon a sale of the target company or its assets.
An exit is achieved through the sale of its assets to a third party purchaser
and/or the equity when sold. The Manager will seek to identify such transactions
in sectors where there is demand for consolidation and capacity addition.
The Company intends to work to a time frame of 9-12 months from acquisition to
exit in such transactions.
Break-up and sale of assets
The objective of these transactions is to obtain benefit from a change in
control of the target company or its assets by taking a secured debt position
with a view to realising latent value through the sale of individual assets or
parts of the business to different buyers. The Group will consider acquiring a
minority equity interest in target companies and / or assets, but the Company
would not acquire a majority of the equity interest. This process will entail
the negotiation and restructuring of debts with creditors and lenders, the
consolidation of security and the sale of assets to third party buyers.
The Directors consider that this type of transaction is particularly attractive
where there are high value assets in the target company, and the Company expects
that the debt can be settled at a discount to market value. The Company intends
to work to a time frame of 12-15 months from acquisition to exit in such
transactions.
Bridge financing
In these transactions the objective is to provide short term bridge financing to
target companies that are in need of immediate funds to complete one time
settlements with secured creditors and which have cash flows to support the
repayment of the financing (together with the Company's desired return) to the
Group over a period of 6-9 months.
Gearing
The Directors anticipate that, due to a lack of sophisticated distress lenders
in India and with the exception of bridge financing transactions, the Group's
transactions will generally be funded by the Group from the proceeds of equity
investments into the Group and not through debt.
Investing restrictions
The Company will only invest in Indian distressed companies and distressed
assets. The Company will not have a predetermined preference of allocation in
the type of transactions outlined above, but will aim to build a diversified
portfolio by:
* investing no more than GBP5 million in transactions relating to one single
entity;
* investing no more than 50 per cent. of the net asset value of its portfolio in
one single transaction type; and
* not investing in transactions where the intrinsic value of the underlying assets
is believed to be less than the amount of the investment required.
The Board may however consider deviation from the above parameters while
evaluating specific proposals.
These investment restrictions will apply at the time of the initial investment
in a particular opportunity and subsequent transactions which affect these
ratios will not lead to a requirement to divest any investment to rebalance the
portfolio. There are no obligations on the Company or the Manager to make any
investments or to return monies to shareholders within a minimum period of time.
26 October 2009
Enquiries
Sarah Marshall, Company Secretary 01624 689 589
Simcocks Trust Limited
Jeremy Ellis / Chris Clarke 0207
071 4300
Evolution Securities Limited
This information is provided by RNS
The company news service from the London Stock Exchange
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