KIV2 Keydata 2

 
TIDMKIV2 
 
27 January 2011 
 
Recommended  proposals for a merger between  Foresight VCT plc ("Foresight VCT") 
and  Keydata  Income  VCT  1 plc  ("Keydata  1") and  Keydata  Income  VCT 2 plc 
("Keydata  2") (together "Keydata VCTs") to  be completed by way  of a scheme of 
reconstruction of the Keydata VCTs under section 110 of the Insolvency Act 1986 
and  the  transfer  by  the  Keydata  VCTs  of  their  assets and liabilities to 
Foresight VCT and the cancellation of listing of the Keydata VCTs shares. 
 
Summary 
 
The  boards of Foresight  VCT, Keydata 1 and  Keydata 2 ("Boards") announce that 
they  have reached agreement on recommended  proposals for the merger of Keydata 
1 and Keydata 2 with Foresight VCT. 
 
The  merger should result in  an enlarged company having  net assets of over  GBP30 
million  and is expected to create the strategic benefit of increasing Foresight 
VCT's footprint in the environmental infrastructure sector, as well as providing 
a more economically efficient size and the cost savings as identified below. The 
Boards  further  announce  that  they  are  today  writing  to  their respective 
shareholders with full details of the proposed merger. 
 
The  merger  will  be  effected  by  Keydata  1 and  Keydata 2 being placed into 
members'  voluntary  liquidation  pursuant  to  a scheme of reconstruction under 
Section 110 of the Insolvency Act 1986. The assets and liabilities of Keydata 1 
and  Keydata 2 will  then be  transferred to  Foresight VCT  in exchange for new 
Foresight  VCT  ordinary  shares  ("New  Shares").   The  effective date for the 
transfer  of the assets and liabilities of the Keydata VCTs and the issue of New 
Shares  pursuant to the merger is expected to be 28 February 2011 (the Effective 
date).   Following the Effective date, it is anticipated that the listing of the 
Keydata 1 Shares and Keydata 2 Shares will be cancelled on 1 March 2011. 
 
The Scheme is conditional upon the approval by the shareholders of Foresight VCT 
and  Keydata  1 and  Keydata  2 of  resolutions  to be proposed at extraordinary 
general  meetings (EGMs) to  be held on  18 February 2011 (for both Keydata VCTs 
and  Foresight VCT) and 28 February 2011 (for Keydata VCTs only) and dissent not 
having  been expressed by shareholders of the Keydata VCTs holding more than 10 
per  cent in nominal  value of the  issued share capital  of either Keydata 1 or 
Keydata  2 and Foresight VCT  confirming that it  has received no  notice of any 
claims,  proceedings  or  actions  of  whatever  nature  threatened or commenced 
against  Keydata  1 or  Keydata  2 which  the  board  of Foresight VCT regard as 
material. 
 
Introduction 
 
The Boards announced on 1 September 2010 that terms for the merger of Keydata 1 
and Keydata 2 with Foresight VCT had been agreed. 
 
The  Boards are now in a position to put merger proposals to the shareholders of 
their relevant companies. 
 
 i. Terms of the Merger 
 
 
The  merger will provide for all of  the assets and liabilities of Keydata 1 and 
Keydata 2 to be transferred to Foresight VCT in consideration for: 
 
  * the  issue of New Shares to Keydata  VCTs Shareholders equal in value to the 
    aggregate  Roll-Over Value of the Keydata  VCTs Shares on 24 February 2011; 
    and 
 
 
  * the  issue of additional New  Shares to Keydata VCTs  Shareholders by way of 
    Additional  Consideration  if  the  Enterprise  Value  of  the Derby Project 
    (defined  below) as at 30 September 2013, exceeds the Roll-Over Value of the 
    Keydata VCTs Shares on 24 February 2011. 
 
 
The  maximum consideration  (comprising the  New Shares  and the  additional New 
Shares)  which may be paid by Foresight VCT for the acquisition of the assets of 
Keydata  1 and Keydata  2 will not  exceed  GBP6.4  million. Therefore  the maximum 
Additional  Consideration will be the difference between the aggregate Roll-Over 
Value of the Keydata VCTs Shares on 24 February 2011 and  GBP6.4 million. 
 
The  merger  will  be  completed,  as  regards  the  initial consideration, on a 
relative  net  asset  value  basis  and  will  be subject to the Scheme becoming 
unconditional.  The acquisition  of the  asset and  liabilities of Keydata 1 and 
Keydata 2 is in line with Foresight VCT's investment policy. 
 
Following the transfer, the listing of the Keydata VCTs Shares will be cancelled 
and Keydata 1 and Keydata 2 will be wound up. 
 
(ii) Benefits anticipated from the merger 
 
The  merger  of  the  Keydata  VCTs  should  result in cost savings and enhanced 
administrative efficiency. As the Keydata VCTs have the same investment manager, 
common advisers and similar investment policies, the merger should be achievable 
without  major additional cost  or disruption to  the portfolio investments. The 
existing   investment   management  arrangements  between  Foresight  Group  LLP 
("Foresight Group") and Foresight VCT will remain in place. 
 
The  Foresight VCT  board considers  that this  merger should  bring significant 
benefits  to  Foresight  VCT  shareholders  and  the  Keydata  VCTs shareholders 
through: 
 
  * creation  of  a  single  VCT  of  a  more economically efficient size with a 
    greater  capital  base  over  which  to spread administration and management 
    costs; 
  * a reduction in annual running costs for the enlarged company compared to the 
    aggregate annual running costs of the three separate companies; 
  * creation  of an enlarged entity with  a larger cash positive position making 
    Foresight  VCT  better  positioned  to  meet  its ongoing obligations and to 
    support   existing   investee   companies,   in  this  challenging  economic 
    environment; 
  * the  enlarged  company  will  hold  a  more  diversified  portfolio  thereby 
    dispersing the portfolio risk; 
  * an  increased exposure to the environmental infrastructure asset class which 
    is  believed by the  Foresight VCT board  and Foresight Group  to offer real 
    growth for the future; and 
  * the  potential to make regular distributions  in the future, particularly as 
    costs per Share are reduced. 
 
 
Annual  running costs attributable  to the Ordinary  Shares of Foresight VCT and 
Keydata  1 and  Keydata  2 are  approximately   GBP717,000,   GBP188,000  and  GBP188,000 
respectively  (ignoring the current annual cost cap  of 3.5 per cent. of the net 
asset  value for Keydata 1 and Keydata 2 as this would not apply in the Enlarged 
Company). This represents 3.7 per cent. of the unaudited NAV attributable to the 
Ordinary Shares of Foresight VCT at 30 June 2010 and 5.2 per cent. of Keydata 1 
and  5.2 per cent  of Keydata  2's unaudited NAV  at 30 November 2009. After the 
merger,  the  annual  running  costs  are  expected  to be  GBP885,000, a saving of 
 GBP208,000  and reducing  the combined  annual running  costs by  0.8 per cent. to 
approximately  3.3 per cent.  of the  net assets  of the  ordinary shares of the 
enlarged company. 
 
The aggregate anticipated cost of undertaking the merger by way of the Scheme is 
approximately   GBP300,000, including VAT, legal  and professional fees, stamp duty 
and  the costs of  winding up Keydata  1 and Keydata 2. The  costs of the Scheme 
will be borne by Keydata 1 and Keydata 2. 
 
Shareholders  should note that the merger will  be outside the provisions of the 
City Code on Takeovers and Mergers. 
 
The Foresight VCT board believes that there is an optimum size for Foresight VCT 
which is at least  GBP30 million of net assets. In attaining this optimum size, the 
Board wishes and expects to achieve and maintain a more diversified portfolio of 
investments for the benefit of Foresight VCT Ordinary Shareholders. 
 
As at 30 June 2010 Foresight VCT's net assets (attributable to both the Ordinary 
Shares and the Planned Exit Shares) were approximately  GBP28,458,000. 
 
As  at  30 June  2010, the  Keydata  VCTs  had  in  aggregate cash and overnight 
deposits  of   GBP42,000,  creditors  of   GBP558,000  and  net current liabilities of 
 GBP134,000  as extracted from the Keydata VCTs unaudited management accounts as at 
30 June 2010. 
 
Keydata 1 and Keydata 2 
 
Keydata 1 and Keydata 2 were established in February 2005 in order to invest in 
renewable energy companies concerned with wind, biomass and waste-to-energy 
power generation. In 2006, the Keydata VCTs agreed to invest an aggregate of  GBP8 
million in ten newly formed wind farm investment companies.  Subsequently they 
were unable to agree satisfactory terms with the operator. The investment 
manager at that time therefore decided to look for alternative renewable energy 
investments meeting their requirements. 
 
In June 2007, Keydata 1 and Keydata 2 announced they had signed agreements to 
invest up to  GBP12.4 million into seven portfolio companies (Keydata Portfolio 
Companies). It is agreed that each of the operating Keydata Portfolio Companies 
should pursue different trades as referred to below. Initially, they agreed on 
an initial collaboration together in order to focus on a renewable biomass 
combined heat and power generation project in St Helens based on the 
gasification of waste wood. Progress on the project was frustratingly slow, with 
a series of technical and implementation problems. In addition, the main 
engineering contractor had its own financial problems and, when it failed to 
raise new finance it was decided to withdraw from the project. 
 
In June 2009 Keydata Investment Services Limited (Keydata Investment Services), 
who handled the administrative affairs of Keydata 1 and Keydata 2 was placed 
into administration. The enforced liquidation of Keydata Investment Services by 
the Financial Services Authority during June 2009 coincided with the abandonment 
of the St Helens project and this delayed the commencement of trading by each of 
the seven Keydata Portfolio Companies. The commencement of trading by investee 
companies within three years of a VCT raising funds is one of the qualifying 
conditions of maintaining VCT status. 
 
Accordingly, the Keydata VCTs Boards acted quickly to appoint Foresight Group as 
the investment adviser of Keydata 1 and Keydata 2. The Keydata VCTs Boards 
selected Foresight Group because of its experience in environmental 
infrastructure, and specifically its involvement in investments in generating 
heat and power from biomass plants. Foresight Group and the boards of Keydata 1 
and Keydata 2 instigated a course of action including the termination of all 
contracts involved with the renewable energy project in St Helens and the 
removal of the biomass energy assets from the St Helens' site. Keydata 1 and 
Keydata 2 retained their investment in the Keydata Portfolio Companies and 
therefore examined all options for the redeployment of the existing equipment 
owned by the Keydata Portfolio Companies and possibly developing a new project. 
 
Subsequently, one of the Keydata Portfolio Companies, Boyle agreed a strategic 
development agreement with O-Gen UK, a company in which several venture capital 
trusts managed by Foresight Group hold an investment, which has particular 
expertise in the preparation of waste wood material, advanced thermal treatment 
and gas conditioning. O-Gen UK has recently commissioned a biomass combined heat 
and power facility in Stoke on Trent which is the first of its type in the UK to 
secure Ofgem certification. The strategic development agreement with O-Gen UK is 
for the development of up to 10MW of energy assets in the Midlands region, with 
the first facility to be located in Derby (the Derby Project) where planning 
permission has been secured for the construction of a 3MW biomass plant to 
redeploy a portion of Keydata 1 and Keydata 2's operational assets. It is 
anticipated that further planning permissions acquired from O-Gen UK will be 
part of this strategic development. It is envisaged that the Derby Project will 
be constructed in three stages. Stage 1 of 0.5MW should be constructed during Q1 
2011. Stage 2, which should see an increase in the plant capacity to 1.5MW, 
should be constructed during Q3 2011 and Stage 3 where the plant will be brought 
up to full capacity of 3MW should be constructed during Q2 2012. Timely 
completion of Stage 3 should allow sufficient time for the Derby Project to 
become fully operational before the Enterprise Value of the Derby Project can be 
estimated for the purpose of calculating the Additional Consideration to 
Shareholders as soon as practicable following 30 September 2013. 
 
Foresight Group also applied to HMRC for a waiver of the breach of the VCT rules 
which occurred because the delay in the commencement of trading by the Keydata 
Portfolio Companies. In recognition of the fact that this breach of the VCT 
rules was inadvertent and not the fault of Keydata 1 and Keydata 2, the Keydata 
VCTs Boards or the new manager, HMRC has granted Keydata 1 and Keydata 2 a 
series of waivers in recognition of the progress now being made by the Keydata 
Portfolio Companies in satisfying the trading requirement. The latest HMRC 
waiver covers the period from the end of November 2010 until the end of February 
2011. 
 
The Keydata Portfolio Companies, namely Boyle, Burley Energy Limited (Burley), 
Cooke Generation Limited (Cooke), Nevin Energy Resources Limited (Nevin), Clarke 
Power Services Limited (Clarke), Spencer Energy Services Limited (Spencer), 
Hughes Power Limited and Docherty Heat and Energy Distributor Limited have not 
yet commenced trading but they are now making good progress towards doing so. 
Electricity is expected to be produced in the first half of 2011 and each of the 
operating Keydata Portfolio Companies expect to be revenue generating within the 
same timescale. The proposed trades of the Keydata Portfolio Companies continue 
to be separate, although, they will work alongside each other through their 
collaboration on the Derby Project. Boyle is the leaseholder for the Derby site 
responsible for all site related activities and services. It is intended that 
Boyle will grant sub-licenses to the other Keydata Portfolio Companies. Burley 
will burn waste wood in a gasifier to create dirty syngas which will be sold to 
Cooke. Cooke will buy the dirty syngas, clean it and sell it to Nevin.  Nevin 
will run the clean syngas through a reciprocating engine to create electricity. 
Clarke will provide operational support with external technical advisers and 
will employ the operations team. Spencer will provide administrative services. 
The Keydata VCTs Boards believe that the Keydata Portfolio Companies could 
pursue their trades with unconnected third parties, but following the enforced 
liquidation of Keydata Investment Services by the Financial Services Authority 
during June 2009 it was thought that shareholder value would be best preserved 
by a continued collaboration between the Keydata Portfolio Companies. 
 
Aside from Clarke and Spencer, each of the Keydata Portfolio Companies owns 
assets such as gas powered engines, gasification and ancillary equipment that 
will be utilised within the Derby Project as part of the strategic development 
agreement and have approximately  GBP0.8 million in aggregate in cash. 
 
However, although Keydata 1 and Keydata 2 retain a small proportion of cash 
( GBP0.3 million in aggregate) as at 30 September 2010, they cannot provide 
additional financial resources to the Derby Project and therefore the merger 
with Foresight will enable the Enlarged Company to support the strategic 
development agreement fully. 
 
It had been intended that Keydata 1 and Keydata 2 would dispose of a number of 
the generator assets held by the Keydata Portfolio Companies in order to provide 
additional financial resources to support their participation in the strategic 
development agreement. In the event, a professionally managed auction process to 
sell these assets failed to achieve expected values. 
 
The boards of Keydata 1 and Keydata 2, did consider various other options. These 
included a winding up of Keydata 1 and Keydata 2 to return cash to Keydata VCTs 
Shareholders. However considerable uncertainty surrounded the valuation of the 
Keydata Portfolio Companies' highly specialised assets. After allowing for 
costs, the valuations suggested by the auction process would have resulted in 
Keydata VCTs Shareholders receiving net cash proceeds of less than 18.0p per 
Keydata VCTs Share (before taking into account the costs of liquidation). In 
addition, a winding up of Keydata 1 and Keydata 2 might have resulted in a loss 
of the initial income tax relief obtained by Keydata VCTs Shareholders in 
respect of their investment in Keydata 1 or Keydata 2. 
 
On 1 September 2010 Keydata 1 and Keydata 2 announced that the listings of their 
Shares had been suspended as at 1 September 2010 as each company was required to 
publish their annual financial report for the year ended 30 April 2010 by 31 
August 2010. However, as they continued to progress the proposed merger they 
announced that they would not be publishing their annual financial reports as 
required by the Listing Rules. This was done to save the not insignificant costs 
associated with the production and distribution of financial reports. The 
Keydata VCTs Shares were therefore suspended and will remain so until such time 
as Keydata VCTs shareholders vote on the Scheme. 
 
If the Scheme does not complete, Keydata 1 and Keydata 2 would envisage 
publishing their annual financial reports as soon as possible following the 
announcement that the merger will not proceed. 
 
Rationale for the merger 
 
One  of  the  Keydata  Portfolio  Companies, Boyle Electrical Generation Limited 
(Boyle)  agreed a strategic  development agreement with  O-Gen UK Limited (O-Gen 
UK)  for the development of up to  10MW of energy assets in the Midlands region, 
with  the  first  facility  to  be  located  in  Derby (the Derby Project) where 
planning permission has been secured for the construction of a 3MW biomass plant 
to  redeploy a portion of the Keydata VCTs operational assets. It is anticipated 
that  further planning permissions acquired  from O-Gen UK will  be part of this 
strategic development. 
 
With  the Scheme in mind, Foresight VCT  recently invested  GBP0.375 million in the 
Derby  Project, making a total  of  GBP1.5 million in  conjunction with other funds 
managed by Foresight Group (the Keydata VCTs investment manager). A further  GBP1.5 
million  will be  invested by  funds managed  by Foresight  Group subject to the 
completion  of the merger and legal documentation being agreed, taking the total 
additional funding for the Derby Project to  GBP3 million. 
 
For  the purposes of the Scheme, the value  of the assets owned by Keydata 1 and 
Keydata  2 have been considered to be made up of two component parts: first, the 
physical  valuation  of  the  Equipment  and  cash  at bank owned by the Keydata 
Portfolio Companies and the Keydata VCTs and second, the future Enterprise Value 
of  the Derby Project once  the assets owned by  the Keydata Portfolio Companies 
have become operational and are generating electricity. 
 
The  value of the initial issue of  New Shares to Keydata VCTs Shareholders will 
therefore  be based on the Roll-Over Value  of the physical assets of Keydata 1 
and  Keydata 2 at that  time. Keydata VCTs  Shareholders will receive Additional 
New  Shares as  Additional Consideration  if the  Enterprise Value  of the Derby 
Project  as at 30 September  2013 exceeds this Roll-Over  Valuation at that date 
and  accordingly, the maximum  consideration which may  be paid by Foresight VCT 
for  the acquisition of  the assets of  Keydata 1 and Keydata  2 will not exceed 
 GBP6.4 million. 
 
This structure recognises the execution risks that Foresight will be assuming as 
a  consequence  of  the  proposed  merger  in  relation  to the Derby Project by 
incorporating separate valuations for each of the current and potential value of 
the  assets of Keydata 1 and Keydata 2.  It  is envisaged that the Derby Project 
will  be constructed  in three  stages. Stage  1 at 0.5MW should  be constructed 
during  Q1 2011. Stage 2 which should  see an increase in  the plant capacity to 
1.5MW should  be constructed during Q3 2011 and  Stage 3 where the plant will be 
brought  up to full capacity of 3MW should be constructed during Q2 2012. Timely 
completion  of stage  3 should allow  sufficient time  for the  Derby Project to 
become fully operational before the Enterprise Value of the Derby Project can be 
estimated. 
 
The  merger does not directly affect the Planned Exit Shares issued by Foresight 
VCT. 
 
Acquisition of the assets and liabilities of Keydata 1 and Keydata 2 pursuant to 
the Scheme 
 
The  terms of the Scheme set out the method of calculation for the number of New 
Shares  to be issued  to the Keydata  VCTs Shareholders on  the Calculation Date 
and, subsequently, if applicable, by way of Additional Consideration. The merger 
will  be completed by Keydata 1 and  Keydata 2 being put into members' voluntary 
liquidation,  all of the assets and liabilities of Keydata 1 and Keydata 2 being 
transferred to Foresight VCT for consideration. 
 
The  Liquidators will offer to purchase  the holdings of dissenting Keydata VCTs 
Shareholders at the break value price for the Keydata VCTs Shares, this being an 
estimate of the amount a Keydata VCTs Shareholder would receive for Keydata VCTs 
Shares in an ordinary winding-up of Keydata 1 and Keydata 2 if all of the assets 
of Keydata 1 and Keydata 2 had to be realised. The break-value is expected to be 
significantly  below the estimated  Roll-Over Value. Accordingly,  the effect of 
dissenting  Keydata VCTs Shareholders will be  both to reduce the overall number 
of  New Shares to be issued (reflecting the reduction in the value of the assets 
to  be transferred to Foresight VCT by the  payment of the break value price) as 
well  as to increase the number of New Shares to be issued to those Keydata VCTs 
Shareholders  who vote in favour  of the Scheme at  the expense of those Keydata 
VCTs Shareholders who dissent. 
 
Worked example 
Had  the Scheme been implemented on 30 June 2010, the unaudited NAV at that date 
of  the Ordinary Share Fund  of Foresight VCT (taken  from the unaudited interim 
results of Foresight VCT) was  GBP22.6 million and Foresight VCT's Merger Value per 
Ordinary  Share (this being the unaudited NAV of Foresight VCT's Ordinary Shares 
as at 30 June 2010 divided by the number of Ordinary Shares in issue) would have 
been 47.3p. 
 
Had  the Scheme been implemented on 30 June  2010 the unaudited NAV at that date 
of  Keydata 1 and Keydata  2 (taken from the  Keydata 1 and Keydata 2 management 
accounts)  and  taking  into  account  a  reduced  valuation of the Equipment to 
 GBP2,365,000  in connection with the merger  and including a reduction for amounts 
paid or accrued for the costs of the Scheme to be borne by Keydata 1 and Keydata 
2 would have been  GBP3.8 million and the Roll-Over Value per Share (this being the 
unaudited NAV of the Keydata VCTs Shares as at 30 June 2010 (taking into account 
that  reduced valuation and including the aforementioned reduction), and divided 
by  the number of Keydata VCTs Shares in issue), would have been 26.2p (assuming 
no dissenting Keydata VCTs Shareholders). 
 
The number of New Shares to be issued to the Keydata VCTs Shareholders initially 
will  be calculated by multiplying the number of Keydata 1 Shares and Keydata 2 
Shares  in issue  by the  ratio of  the Roll-Over  Value per Keydata 1 Share and 
Keydata  2 Share divided by the Merger Value  per Share. Such New Shares will be 
issued  pro-rata to Keydata VCTs Shareholders on  the register of members on the 
Record Date. For these purposes dissenting shareholders in Keydata 1 and Keydata 
2 will be disregarded. 
 
Had the Scheme been implemented on 30 June 2010, based on the relative unaudited 
net  asset values of Foresight  VCT and Keydata 1 and  Keydata 2 as at that day, 
8,090,614 New  Shares  would  have  been  issued  to  Keydata  VCTs Shareholders 
representing 14.49 per cent. of the enlarged Foresight VCT issued Ordinary Share 
capital. 
 
Ordinary Share Reconstruction 
Following  the issue of New Shares to  Keydata VCTs Shareholders pursuant to the 
Scheme  Foresight VCT intends to reconstruct  its Ordinary Share capital so that 
the  net asset value per Ordinary Share  will be, as nearly as practicable, 100 
pence  per share. This will be done by the ratable redesignation of a proportion 
of  the Ordinary Shares  then in issue  as nominally valued  Deferred Shares and 
their   subsequent   off-market  repurchase  by  Foresight  VCT  for  a  nominal 
consideration  of  one  pence  in  aggregate.  The purpose of the Ordinary Share 
Reconstruction  is to make the Ordinary  Shares more attractive to potential new 
investors  should Foresight VCT decide to raise further capital in the future by 
the  issue of new  Ordinary Shares. A  copy of the  contract for this off-market 
purchase  of  Deferred  Shares  may  be  inspected  at  the registered office of 
Foresight  VCT for the period  of 15 days prior to  the Foresight EGM and at the 
meeting itself. 
 
The  Deferred Shares  will only  have a  nominal value  because, as a class, the 
Deferred  Shares will have restricted dividend rights, will not carry any rights 
to  receive notice of, or  to attend or vote  at EGMss, will on  a winding up be 
entitled  only to 1p for every 1,000,000 Deferred  Shares (with no further right 
to  participate in any surplus assets of  Foresight VCT), and will be capable of 
being  purchased by Foresight VCT at any  time for an aggregate consideration of 
1p. If  resolution number 2 to  be proposed at  the Foresight EGM  is passed the 
Directors  will be authorised  to enter into  an off-market contract to purchase 
all  the issued  Deferred Shares  for an  aggregate amount  of 1p for all of the 
Deferred  Shares and Foresight  VCT's net asset  value will increase to 100p per 
Ordinary  Share.  Shareholders  do  not  need  to  take any action following the 
Foresight EGM. 
 
Foresight VCT 
 
Foresight VCT was launched in 1997 and has an objective of achieving long-term 
capital appreciation and generating maintainable levels of income for 
shareholders. As at 30 June 2010, the Ordinary Share Fund of Foresight VCT had 
unaudited net assets of  GBP22.6 million or (47.3p per Foresight VCT Share) and 
investments in 26 companies with a valuation of  GBP21.0 million. In addition to 
the Ordinary Share Fund of Foresight VCT, Foresight VCT established a new fund 
in 2010, raising capital by the issue of a new class of shares called Planned 
Exit Shares. The capital raised by the issue of Planned Exit Shares, investments 
made from that capital and the investment returns derived therefrom are and will 
remain exclusively attributable to the holders of the Planned Exit Shares. 
 
The original holders of Foresight VCT Shares, since 1997, have received total 
dividends of 169.4p (restated) per Foresight VCT Share as well as retaining 
32.5p (restated) per share of remaining net asset value, making a net asset 
value total return of over 200p per share. This makes the original ordinary 
shares of Foresight VCT, shares in the best performing VCT fund launched. Over 
the six months to 30 June 2010 the underlying net asset value increased by 19 
per cent. due to the improved revenue and profit performance of a number of 
portfolio companies, a significant amount of which can be attributed to export 
driven growth in the US and Europe. 
 
Foresight Group 
 
Foresight Group will continue as the investment manager of the Enlarged Company 
on its existing 
management and performance incentive terms and the assets acquired from Keydata 
1 and Keydata 2 will be rolled into these arrangements. 
 
Cancellation of Listing 
 
Keydata 1 and Keydata 2 will apply to the UKLA for cancellation of the listing 
of their Shares, upon the successful completion of the Scheme, which is 
anticipated to be on 1 March 2011. 
 
Documents and approvals 
 
Foresight  VCT shareholders will  receive a copy  of summary and securities note 
(which,  together with a  registration document dated  28 January 2010, form the 
"Prospectus")  together with  a circular  convening the  Foresight VCT EGM to be 
held  on 18 February 2011 at which Foresight VCT shareholders will be invited to 
approve resolutions in connection, inter alia, with the merger. 
 
Keydata  VCTs shareholders  will also  receive a  copy of  the Prospectus  and a 
circular in relation to the merger convening the Keydata VCTs EGM on 18 February 
2011 and  28 February 2011 at which Keydata VCTs shareholders will be invited to 
approve resolutions in connection with the merger. 
 
Copies of the Prospectus and the circulars have been submitted to the Financial 
Services Authority and will also shortly be available for inspection at the 
National Storage Mechanism, which is located at: 
 
http://www.hemscott.com/nsm.do 
 
 
EXPECTED TIMETABLES 
 
EXPECTED TIMETABLE FOR FORESIGHT VCT 
 
Latest time for receipt of forms of proxy for the Foresight EGMs        12 noon 
on 16 February 2011 
Foresight EGMs                12 noon on 18 February 2011 and 
                thereafter 
Calculation Date         After 5.00 pm on 24 February 
        2011 
Effective Date for the transfer of the assets and 
liabilities of Keydata 1 and Keydata 2 to the 
Company and the issue of New Shares        28 February 2011 
Announcement of the results of the Foresight 
EGMs and completion of the Scheme        28 February 2011 
Admission of and dealings in the New Shares to Commence        1 March 2011 
Reconstruction of Ordinary Share capital by the 
creation and off market purchase of Deferred 
Shares        After close of business on 1 March 
        2011 
Certificates for the New Shares despatched by         8 March 2011 
 
 
EXPECTED TIMETABLE FOR KEYDATA 1 AND KEYDATA 2 
 
Latest time for receipt of forms of proxy for the 
Keydata VCTs First EGMs        10.00 am and 10.05 am on 16 
        February 2011 
Keydata VCTs First EGMs         10.00 am and 10.05 am on 18 
        February 2011 
Date from which it is advised that dealings in 
Keydata 1 and Keydata 2 should only be for cash 
settlement and immediate delivery of documents of title         22 February 2011 
Record Date for Keydata VCTs Shareholders entitlements 
under the Scheme         24 February 2011 
Register of Members of Keydata VCTs Shareholders closed        24 February 2011 
Calculation Date         After 5.00 pm on 24 February 
        2011 
Latest time for receipt of forms of proxy for the 
Keydata VCTs Second EGMs         10.00 am and 10.05 am on 26 
        February 2011 
Keydata VCTs Second EGMs         10.00 am and 10.05 am on 28 
        February 2011 
Effective Date for the transfer of the assets and 
liabilities of Keydata 1 and Keydata 2 to the 
Company and the issue of New Shares        28 February 2011 
Announcement of the results of the Second 
EGMs of Keydata 1 and Keydata 2 and 
completion of the Scheme         28 February 2011 
Cancellation of the listing of Keydata 1 Shares and 
Keydata 2 Shares        1 March 2011 
 
 
Definitions 
 
"Additional Consideration"        the additional consideration payable to 
Keydata VCTs Shareholders who participate in the Scheme in the form of 
additional New Shares subject to and in accordance with the terms of the Scheme 
 
"Calculation Date"         the date on which the Roll-Over Value and the 
Merger Value will be calculated, this being 24 February 2011 
 
"Derby Project"        the proposed 3.0MW biomass-fuelled electricity 
generation station in Derby within the scope of the Planning Permission to be 
built in stages between 2011 and 2012 including the Equipment and all other 
tangible and intangible assets, liabilities, revenues, profits and business 
directly attributable or derived therefrom 
"Enterprise Value of the Derby 
Project"        the fair value of the ownership interests held by Participators 
in the Derby Project on the basis of the 12 months ending 30 September 2013 
estimated by Foresight Group in accordance with a methodology regarded as 
appropriate by the auditors of Foresight in the context of the International 
Private Equity and Venture Capital Valuation Guidelines 
 
"Merger Value"        the value of an Ordinary Share calculated in accordance 
with paragraph 4 of Part IV of the circular to be sent to Foresight VCT 
shareholders and paragraph 4 of Part IV of the circular to be sent to the 
Keydata VCTs shareholders 
 
"Roll-Over Value"         the value of a Keydata 1 Share and Keydata 2 Share 
calculated in accordance with paragraph 4 of Part IV of the circular to be sent 
to Foresight VCT shareholders and paragraph 4 of Part IV of the circular to be 
sent to the Keydata VCTs shareholders 
 
"Scheme"         the proposed merger of the Company with Keydata 1 and Keydata 
2 by means of placing Keydata 1 and Keydata 2 into members' voluntary 
liquidation pursuant to Section 110 of IA 1986 and the acquisition by Foresight 
VCT of all of the assets and liabilities of Keydata 1 and Keydata 2 in 
consideration for New Shares and the payment of Additional Consideration 
 
Enquiries 
 
Investment manager for Keydata VCTs and Foresight VCT 
Foresight Group LLP 
Gary Fraser 
Telephone 01732 471 800 
 
Sponsor to Foresight VCT 
BDO LLP 
John Stephan or Susan Brice 
Telephone 0121 352 6282 
 
Solicitors to Keydata VCTs and Foresight VCT 
R W Blears LLP 
Roger Blears 
Telephone: 0203192 5691 
 
 
The directors of Foresight VCT accept responsibility for the information 
relating to Foresight VCT and its directors contained in this announcement. To 
the best of the knowledge and belief of such directors (who have taken all 
reasonable care to ensure that such is the case), the information relating to 
Foresight VCT and its directors contained in this announcement for which they 
are solely responsible, is in accordance with the facts and does not omit 
anything likely to affect the import of such information. 
 
The directors of the Keydata VCTs accept responsibility for the information 
relating to the Keydata VCTs and their directors contained in this announcement. 
To the best of the knowledge and belief of such directors (who have taken all 
reasonable care to ensure that such is the case), the information relating to 
the Keydata VCTs and their directors contained in this announcement is in 
accordance with the facts and does not omit anything likely to affect the import 
of such information. 
 
BDO LLP ("BDO") is acting for Foresight VCT and Keydata 1 and Keydata 2 and 
no-one else in connection with the matters described herein and will not be 
responsible to anyone other than Foresight VCT and Keydata 1 and Keydata 2  for 
providing the protections afforded to customers of BDO nor for providing advice 
in relation to the matters referred to herein. BDO is authorised and regulated 
in the United Kingdom by the FSA. 
 
R W Blears LLP, which is regulated in the United Kingdom by the Solicitors 
Regulation Authority, is acting as legal adviser to Foresight VCT and Keydata 1 
and Keydata 2 and no-one else and will not be responsible to any other person 
for providing advice in connection with any matters referred to herein. 
 
Opus Corporate Finance LLP ("Opus") is acting for the Keydata 1 and Keydata 2 
and no-one else and will not be responsible to anyone other than the Keydata 1 
and Keydata 2 for providing the protections afforded to customers of Opus nor 
for providing advice in connection with the matters referred to herein. Opus is 
authorised and regulated in the United Kingdom by the FSA. 
 
 
 
 
 
 
 
 
This announcement is distributed by Thomson Reuters on behalf of 
Thomson Reuters clients. The owner of this announcement warrants that: 
(i) the releases contained herein are protected by copyright and 
    other applicable laws; and 
(ii) they are solely responsible for the content, accuracy and 
     originality of the information contained therein. 
 
Source: Keydata Income VCT 2 plc via Thomson Reuters ONE 
 
[HUG#1483122] 
 

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