24 April 2024
Riverstone Credit Opportunities Income
Plc ("RCOI" or the "Company")
Notice of AGM
Proposals for Managed
Wind-down
THIS ANNOUNCEMENT CONTAINS INSIDE
INFORMATION
Annual General
Meeting
The Company announces that its annual general
meeting ("Annual General Meeting" or "AGM") will be held at the
offices of Hogan Lovells International LLP, Atlantic House, Holborn
Viaduct, London, EC1A 2FG, United Kingdom at 2.00 p.m. (BST) on 22
May 2024.
In addition to the usual agenda items
considered at each AGM of the Company, the notice of the Annual
General Meeting (the "Notice of AGM") also sets out proposals for
the commencement of a managed wind-down of the Company from the
conclusion of the AGM. The implementation of a managed wind-down
requires the approval of Shareholders: (i) to amend the Company's
investment policy; and (ii) to amend the Company's articles of
association (the "Articles"), in each case on the terms described
below and in further detail in the Notice of AGM (the "Wind-down
Resolutions"). The Wind-down Resolutions will be proposed to
Shareholders at the AGM.
The Notice of AGM has been despatched to all
Shareholders today. Capitalised terms used but not otherwise
defined in this announcement shall have the same meaning as set out
in the Notice of AGM.
Shareholders should complete and sign the proxy
form accompanying the Notice of AGM in accordance with the
instructions printed on the proxy form by using
www.signalshares.com or appointing a proxy electronically if their
shares are held in CREST. Hardcopy proxy forms should be returned
to Link Group, PXS1, Central Square, 29 Wellington Street, Leeds,
LS1 4DL. Please return your forms as soon as possible and, in any
event, prior to 2.00 p.m. on 20 May 2024 or not less than 48 hours
before the time of the meeting or any adjourned meeting.
Copies of the Notice of AGM and Form of Proxy
will shortly be available for inspection at the National Storage
Mechanism website at
https://www.fca.org.uk/markets/primary-markets/regulatory-disclosures/national-storage-mechanism.
An electronic copy of the Notice of AGM will
also shortly be available on the Company's website
www.riverstonecoi.com.
Proposals for
managed wind-down
Following careful consideration and
consultation with Riverstone Investment Group LLC (the "Investment
Manager"), its sub-manager, Breakwall Capital LLC ("Breakwall"),
its advisers and certain significant Shareholders, the Company's
board of directors (the "Board") has determined that a managed
wind-down of the Company's portfolio at this time is in the best
interests of Shareholders.
In particular, under the Company's existing
articles of association (the "Articles"), the Company is required,
at or around the time of its annual general meeting in 2024, to
offer Shareholders the opportunity to elect for all or some of
their Ordinary Shares to be redesignated as realisation shares of
US$0.01 each in the capital of the Company ("Realisation Shares")
on a one for one basis (a "Realisation Election"). Save in limited
circumstances (including as described below), if any Realisation
Elections were to be made, the Company's assets and liabilities
would be allocated pro rata between a pool attributable to the
holders of Ordinary Shares and a pool attributable to the holders
of the Realisation Shares. Thereafter, proceeds from repayment or
realisation of any investments attributable to the realisation pool
would not be reinvested and instead (subject to payment of all
relevant liabilities) would be returned to holders of the
Realisation Shares in the discretion of the Directors following
realisation of the relevant investments.
The Articles also provide that, if the number
of Realisation Elections received by the Company would mean that
the net asset value attributable to the remaining Ordinary Shares
would be below US$50 million, no redesignations into Realisation
Shares would take effect and, instead, the Company would commence
the managed wind down of its entire investment portfolio by
automatically adopting the following investment policy to be
"To realise the Company's assets
on a timely basis with the aim of making progressive returns of
cash to holders of Ordinary Shares as soon as practicable"
(the "Wind-down Investment Policy").
Following discussions with certain of the
Company's significant Shareholders as to their intentions in
respect of any Realisation Election, the Board believes that the
net asset value attributable to the Ordinary Shares as a result of
such Realisation Elections would be significantly below US$50
million, and that the Company would enter into a managed wind-down
of the whole of its investment portfolio at the end of the relevant
election period.
In the unlikely event that the net asset value
of the Ordinary Shares following the Realisation Elections were to
be greater than US$50 million, the Company's size would
nevertheless be reduced to such an extent that, in the view of the
Board, the Company's continued operation would not be in the best
interests of Shareholders. In particular:
•
Although the Company's investment performance has been in
line with its objectives, delivering strong income returns to
Shareholders, the Ordinary Shares have for the past few years
persistently traded at a discount to its net asset value, and the
Company expects that this discount would likely be exacerbated were
the Company to decrease further in size.
• The
Company's ongoing fixed operating costs would be spread across a
smaller number of Ordinary Shares.
•
The Company's materially reduced access to
investible capital resulting from the redesignation of Ordinary
Shares as Realisation Shares would make it more difficult for the
Company to take advantage of attractive investment opportunities
identified by the Investment Manager and/or Breakwall in the
future.
Accordingly, the Board is recommending that
Shareholders vote in favour of the Wind-down Resolutions at the AGM
so that such managed wind-down commences immediately, avoiding the
need for the Company to publish a further circular or to incur the
significant additional costs, administrative burdens and delay
associated with giving Shareholders the opportunity to make
Realisation Elections in these circumstances.
Each of the Wind-down Resolutions is
conditional upon the other being passed such that the Company's
entry into managed wind-down at the AGM is conditional upon
Shareholders approving both Wind-down Resolutions.
The proposed changes to the Company's published
investment policy involved in adopting the Wind-down Investment
Policy require the consent of the lender under the Company's
US$15.0 million senior secured revolving credit facility ("RCF").
The lender's consent has been sought, and is expected to be given
well in advance of the Annual General Meeting, alongside an
amendment to the terms of the terms of the RCF to allow the Company
to utilise the RCF on a limited basis during a managed wind-down to
optimise cash flows. The Company currently has no drawings under
the RCF and if, for any reason, the lender's consent was not given
prior to Resolution 15 being passed at the Annual General Meeting,
the Company would adopt the Wind-down Investment Policy, enter into
managed wind-down and terminate the RCF (which it could do without
additional penalty).
Details of the
proposed managed wind-down
If the proposed managed wind-down is approved
at the AGM, from the conclusion of the AGM:
• The
Company's investment objective and investment policy would become
to realise the Company's assets on a timely basis with the aim of
making progressive returns of cash to holders of Ordinary Shares as
soon as practicable.
•
The Investment Manager would expect generally to
realise the loans comprising the Company's portfolio by holding
them until they come to term and returning the resulting proceeds
to Shareholders. The Investment Manager may also dispose of loans
in the secondary market where it considers this to be in the best
interests of the Company, including through sales to other funds,
vehicles or managed accounts advised or managed by the Investment
Manager or Breakwall.
• The
Company would maintain its listing on the Specialist Fund Segment
and continue to conduct its affairs (including as regards payment
of dividends) so as to qualify as an investment trust for the
purposes of section 1158 of the Corporation Tax Act 2010, in each
case for as long as the Board believes such status to be
practicable and cost-effective for Shareholders.
•
The unaudited net asset value of the Company would continue
to be calculated on a quarterly basis in accordance with the
Company's existing accounting policies and would be published
through a Regulatory Information Service, although the Board would
keep this net asset value reporting policy under review in light of
the diminishing size of the Company's portfolio during the course
of the managed wind-down.
•
The precise mechanism for the return of cash to holders of
Ordinary Shares in a managed wind-down would be at the discretion
of the Board, but may include (subject to compliance with all
applicable legal requirements) a combination of capital
distributions, tender offers, mandatory share redemptions and share
repurchases. The return of proceeds to Shareholders may require
further Shareholder approvals, depending on the methods
used.
The Company would continue to carry on its
investment business with a view to spreading risk during the
managed wind-down.
As of 31 March 2024, being the latest
practicable date prior to the publication of this document,
approximately 94.4 per cent. (by value) of the Company's portfolio
comprised loans, with the balance of the portfolio consisting of
equity or equity like positions. The weighted average remaining
contractual tenor of the loans in the Company's portfolio is 1.86
years, but the weighted average expected remaining tenor of the
loans in the Company's portfolio is between six months and one
year. Accordingly, the Company expects to realise and return to
Shareholders proceeds in respect of up to 90 per cent. of its
investment portfolio within one year of entering into a managed
wind-down.
Further details of the proposed managed wind-down are set out in
the Notice of AGM.
The Wind-down
Resolutions
The implementation of a managed wind-down
requires the approval of Shareholders at the AGM of the Wind-down
Resolutions which propose:
•
to amend the Company's investment policy in the form of the
Wind-down Investment Policy; and
•
to amend the Articles to remove the requirement
for the Company to give Shareholders the opportunity to redesignate
their Ordinary Shares as Realisation Shares on the basis that the
Company instead commences the managed wind-down of the whole of its
investment portfolio from the conclusion of the AGM and to make a
number of non-substantial typographical and similar conforming and
consistency amendments.
Both Wind-down Resolutions are required to be
approved at the AGM for the Company to enter into managed wind down
at the conclusion of the AGM.
The proposed new Articles will shortly be
available for inspection on the National Storage Mechanism at
https://www.fca.org.uk/markets/primary-markets/regulatory-disclosures/national-storage-mechanism
and on the Company's website at www.riverstonecoi.com. Together
with a version of the proposed new Articles showing changes from
the existing Articles, the new Articles will be available at the
offices of Hogan Lovells International LLP, Atlantic House, Holborn
Viaduct, London EC1A 2FG from 15 minutes prior to the AGM until the
conclusion of the AGM.
If both Wind-down Resolutions are not passed at
the Annual General Meeting and the Company does not enter into
managed wind-down at the conclusion of the AGM the Company will, as
soon as practicable following the Annual General Meeting, publish a
circular to Shareholders setting out the terms on which
Shareholders will be able to make Realisation Elections in
accordance with the process set out in the current
Articles.
Recommendation
The Board considers that the proposals and
subjects of all of the Resolutions to be proposed at the AGM,
including the Wind-down Resolutions, are in the best interests of
Shareholders as a whole.
Accordingly, the Board unanimously recommends
Shareholders, as those Directors who own shares in the Company
intend to do so in respect of their own beneficial holdings, to
vote in favour of all of the Resolutions to be proposed at the
AGM.
- ENDS -
For Riverstone Credit Opportunities Income
Plc:
Adam
Weiss
Tel: +1 212 271 2953
For J.P. Morgan Cazenove (Corporate
Broker):
Jérémie Birnbaum (Corporate
Finance)
Tel: +44 0 (207) 742
4000
Media Contacts:
Buchanan
Helen Tarbet
Tel: +44 (0) 20 7466 5109
Henry Wilson
Tel: +44 (0) 20 7466 5111
Jon Krinks
Tel: +44 (0) 20 7466 5199
Verity Parker
Tel: +44 (0) 20 7466 5197
Email: rcoi@buchanan.uk.com
About Riverstone Credit Opportunities Income
Plc:
RCOI lends to companies that build and operate
the infrastructure used to generate, transport, store and
distribute both renewable and conventional sources of energy, and
companies that provide services to that infrastructure. RCOI is
strategically repositioning towards companies seeking to facilitate
the energy transition by decarbonizing the energy, industrial and
agricultural sectors, building sustainable infrastructure and
reducing or sequestering carbon emissions. The Company seeks to
ensure that its investments are having a positive impact on climate
change by structuring each deal as either a green loan or a
sustainability-linked loan, documented using industry best
practices.
For further details, see
https://www.riverstonecoi.com/.
Neither the contents of RCOI's website nor the
contents of any website accessible from hyperlinks on the websites
(or any other website) is incorporated into, or forms part of, this
announcement.
