TIDMVSL
RNS Number : 6159Z
VPC Specialty Lending Invest. PLC
16 May 2023
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY IN OR INTO OR FROM ANY JURISDICTION
WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR
REGULATIONS OF SUCH JURISDICTION
16 May 2023
VPC Specialty Lending Investments PLC
Publication of a Circular containing a Notice of General
Meeting
Further to its announcement of 22 December 2022, VPC Specialty
Lending Investments PLC ("VSL" or the "Company") has today
published a circular (the "Circular") which will shortly be sent to
shareholders.
The Circular sets out details regarding the proposed
amendments:
-- to the Company's investment policy (the "Investment Policy")
with a view to realising the Company's assets in an orderly manner
that achieves a balance between maximising the value received from
investments and making timely returns of cash to the Company's
shareholders; and
-- to the investment management agreement between the Company
and Victory Park Capital Advisors, LLC (the "Investment Manager")
as a consequence of the modification of the Company's Investment
Policy so as to better align the interests of the shareholders and
the Investment Manager.
Under the Listing Rules, the Investment Manager is deemed a
related party of the Company (in accordance with LR 15.5.4R) and
the proposed amendments to the Investment Management Agreement
constitute a related party transaction requiring the approval of
the Independent Shareholders before they may be implemented.
As previously outlined in the Company's announcement of 22
December 2022, the Board determined that it would be in the best
interests of the Company and Shareholders to put forward formal
proposals to Shareholders for a managed wind-down of the Company
instead of the 25% Exit Opportunity. In addition, the Board is
pleased to confirm that it has also agreed with the Investment
Manager to amend the existing management fee and performance fee
arrangements, further details can be found below. The Board
believes that these are material improvements over the existing
arrangements in the context of a managed wind-down.
The Circular contains a notice convening a general meeting (the
"GM") of the Company at which approval will be sought from
shareholders for the proposed amendments to the Investment Policy
and from Independent Shareholders in respect of proposed amendments
to the investment management agreement. The GM will be held at the
offices of Stephenson Harwood LLP, 1 Finsbury Circus, London EC2M
7SH at 2.00 p.m on 12 June.
A copy of the Circular will shortly be made available on the
Company's website at https://vpcspecialtylending.com/ , and
submitted to the National Storage Mechanism, where it will be
available for inspection at:
https://data.fca.org.uk/#/nsm/nationalstoragemechanism .
Capitalised terms that are used but not defined in this
announcement shall have the meanings ascribed to them in the
Circular.
Enquiries
Victory Park Capital via Jefferies or Winterflood
Gordon Watson (below)
Sora Monachino info@vpcspecialtylending.com
Jefferies International Limited Tel: +44 20 7029 8000
Stuart Klein
Gaudi le Roux
Winterflood Securities Limited Tel: +44 20 3100 0000
Joe Winkley
Neil Morgan
+44 (0)7717 857736/ +44 (0)7798
Montfort Communications 626282
Matthew Jervois/Gay Collins vpc@montfort.london
Extracts from the Circular
(References to pages or paragraphs and appendices below refer to
the relevant pages, paragraphs or appendices of the Circular and
references to 'this Circular' refer to the Circular).
2 Background to the Proposals
Although the Company has demonstrated strong NAV total return
performance over the longer term (-6.97%, 39.49% and 57.60% over
one year, three years and five years, respectively, to 31 December
2022), the discount to NAV per Share at which the Shares trade has
been both wide and persistent despite measures taken by the Board
to seek to address this through the use of buybacks.
Consequently, and as set out in the Company's announcement on 22
December 2022, the Board had for some time been reviewing options
for reducing the continuing deep discount of the Company's Share
price to NAV per Share and had taken professional advice and
consulted certain major Shareholders of the Company.
Given the average discount of the Company's Share price to NAV
per Share over the 3 month period ended 31 March 2023 was 17.5%,
being greater than 5% this would have required the Company to
propose the 25% Exit Opportunity following the 2023 AGM, in keeping
with the commitment it made to Shareholders in 2020. However, the
Board also explained in the Company's announcement on 22 December
2022 that it does not believe that the 25% Exit Opportunity alone
would have a lasting impact on the discount of the Company's Share
price to NAV per Share and that the 25% Exit Opportunity might in
fact have a potentially detrimental impact for Shareholders. This
is because the Company would shrink in size, resulting in the
Shares potentially becoming less liquid and the ratio of fees and
other costs increasing as a proportion of NAV.
Rather than shrink the size of the Company and potentially
decrease liquidity through the 25% Exit Opportunity, the Board has
determined that a preferable course of action would be to provide
an exit opportunity to Shareholders which improves on the 25% Exit
Opportunity and should generate greater value for Shareholders. The
Board believes that it would be in the best interests of the
Company and Shareholders as a whole to put forward a proposal for a
managed wind-down of the Company, which would provide a full
managed exit for all Shareholders (as opposed to just a partial
one, which would have been the case under the 25% Exit
Opportunity).
This Circular therefore sets out the Proposals in detail. In
order to implement the Proposals:
(a) Shareholders need to approve revisions to the investment
policy of the Company so that the Company's assets can be realised
in an orderly manner in order to provide a managed exit over time
for all Shareholders; and
(b) Independent Shareholders need to approve the proposed
amendment to the terms of the Investment Management Agreement
between the Company and the Investment Manager in order to reflect
the modification of the Company's investment objective and policy
and to better align the interests of the Shareholders and the
Investment Manager.
As the Proposals require the approval of Shareholders, a formal
notice convening the General Meeting is set out at the end of this
Circular.
The Board and the Investment Manager believe that a carefully
managed process of divesting assets should, over the remaining life
of the Company, remove the discount of the Share price to NAV per
Share and as such should provide a reasonable return to
Shareholders. In the Board's view there is insufficient Shareholder
support for an alternative.
3 The Proposals
3.1 Amendment to the investment objective and investment policy of the Company
The Company proposes to amend its investment objective and
investment policy as set out below. For information, the Company's
existing investment objective and existing investment policy are
set out in Part 3 of this Circular.
The Board is proposing that the Company's investment objective
be restated as follows:
" To conduct an orderly realisation of the assets of the
Company, to be effected in a manner that seeks to achieve a balance
between returning cash to Shareholders promptly and maximising
value. "
Revised investment policy
The Board and the Investment Manager believe that the Company's
portfolio will require careful investment management in order to
achieve the Company's proposed new investment objective.
If Resolution 1 is passed, the Company's existing investment
policy will be replaced and the Company will adopt and adhere to
the following amended and restated investment policy for so long as
the Company maintains its listing and is subject to the Listing
Rules:
"The Company's investments will be realised in an orderly
manner, that is, with a view to achieving a balance between
returning cash to Shareholders promptly and maximising value.
From the date of this Circular until 30 June 2023, the Company
may make new investments directly (in aggregate) up to 5 per cent.
of its Gross Assets (at the time of the investment) in consumer
loans, SME loans, advances against corporate trade receivables
and/or purchases of corporate trade receivables originated by
portfolio companies ("Debt Instruments").
Following this period, the Company may not make any new
investments save that: (a) investments may be made to honour
existing documented contractual commitments to existing portfolio
companies as a majority of the Company's investments are delayed
draw term loans; (b) further investment may be made into the
Company's existing investments without redemption rights in order
to preserve the value of such investments; and (c) realised cash
may be invested in cash or cash equivalents, government or public
securities (as defined in the rules of the UK Financial Conduct
Authority), money market instruments, bonds, commercial paper or
other debt obligations with banks or other counterparties having a
" single A " (or equivalent) or higher credit rating as determined
by any internationally recognized rating agency selected by the
directors of the Company (which may or may not be registered in the
European Union) ( " Cash Instruments ") pending its return to
Shareholders in accordance with the Company's investment
objective.
Any return of proceeds to the Shareholders will be subject to
compliance with existing gearing facilities and hedging
arrangements, payment of expenses and reserves for potential
liabilities.
The Company will continue to comply with the restrictions
imposed by the Listing Rules."
Any material change to the revised investment policy would
require Shareholder approval by an ordinary resolution in
accordance with the Listing Rules.
The revised investment policy will involve a continuing
evaluation of the portfolio in order to assess the most appropriate
realisation strategy to be pursued in relation to each investment.
Whilst some investments may be considered appropriate for sale in
the shorter term, other investments may be held for a longer period
with a view to enabling their inherent value to be realised
successfully.
The Company's credit investments are typically structured as
delayed draw term loans with credit enhancement in the form of (a)
first loss equity subordination, (b) extensive covenant packages,
and (c) extensive monitoring and data requirements. Portfolio
companies generally contribute to the equity tranche which is in
first loss position which aligns incentives with equity investors
and management. Borrowers draw capital over time based on their
needs, subject to availability under their borrowing base, covenant
compliance and performance of the underlying collateral, among
other conditions. The Company lends against a narrowly defined
collateral pool, with eligibility tested on an ongoing basis in
order to reduce the probability of loss or collateral
deterioration. Collateral is tested and monitored regularly to
ensure stability in the underlying collateral support.
The strategy for realising individual investments will be
flexible and may need to be altered to reflect changes in the
circumstances of a particular investment or in the prevailing
market conditions. The Board will meet regularly to review progress
in implementing the Company's revised investment objective and
policy and the then current position of unrealised holdings.
The Board and the Investment Manager regard the orderly
realisation of the Company's assets as the best strategic option at
the present time. However, should Shareholders reject the proposed
amendment to the investment policy to facilitate a managed
wind-down of the Company, the Board and the Investment Manager will
continue to fulfil the existing investment objective and policy and
work to identify other options for the future of the Company.
To be overly prescriptive on the timeframe could prove
detrimental to the realisation process. Sensitive, however, to the
on-going costs of running the portfolio, the Investment Manager
will aim to realise the portfolio in an orderly manner that
achieves a balance between returning cash to Shareholders promptly
and maximising value.
The weighted average remaining life of the Company's debt
investments is 14 months as of 31 March 2023, however, given the
illiquid nature of the Company's investments, it is very difficult
to provide any certainty on the timeframe for realisation. The
Board is aware that Shareholders will expect some guidance on the
expected timeframe and, although Shareholders should place only
limited reliance on this information, it is the Board's current
estimate that the first distribution would occur at the end of 2023
or in early 2024 and distributions will continue thereafter with a
substantial proportion of the portfolio being realised within three
to five years. The Board will regularly communicate the expected
timing of distributions as the portfolio is realised.
3.2 Amendment to the Investment Management Agreement
The Investment Manager is expected to manage the orderly
realisation process over time by seeking appropriate values for the
underlying assets of the Company.
The Board believes that the continued appointment of the
Investment Manager is important to achieving this aim. However, the
current fee arrangements were not structured with management of an
orderly realisation process in contemplation and, consequently the
Board and the Investment Manager have agreed, subject to
Independent Shareholders' approval, to restructure the Investment
Manager's management and performance fee arrangements in light of
the proposed change in strategy to align the interests of the
Company, its Shareholders and the Investment Manager throughout the
orderly realisation process.
The revised performance fee arrangements, which are set out in
detail below and in Part 5 of this Circular, have the following key
alignments:
1. the Investment Manager shall not be entitled to receive any
performance fee unless both the High Water Mark Condition and the
Investment Hurdle Condition are met, each of which is defined
below; and
2. any performance fees will only then be paid to the Investment
Manager concurrent, and on a pro rata basis, with amounts being
distributed to Shareholders, with performance fees in effect being
paid out of realised returns only.
The Board believes that these are material improvements over the
existing arrangements in the context of a managed wind-down and in
return an increased performance fee rate of 20% (compared with the
current 15%) has been agreed.
The Investment Manager has entered into a side letter to the
Investment Management Agreement dated 16 May 2023 (the " Side
Letter "), pursuant to which the Investment Management Agreement
will, conditional upon the passing of Resolution 2 to be proposed
at the General Meeting, be amended as follows:
Management fee
It is proposed that, should Resolution 2 be approved, the
management fee shall remain the same, being 1/12 of 1.0 per cent.
Per month of the NAV, except that, once the NAV is reduced to less
than GBP50 million the monthly management fee shall be subject to a
minimum amount, therefore, the monthly management fee shall be the
higher of 1/12 of 1.0 per cent. Per month of the NAV and:
-- for the first year (the first to 12(th) month) following the
NAV first being reduced to less than GBP50 million: 1/12 of
GBP500,000 per month;
-- for the second year (the 13(th) to 24(th) month) following
the NAV first being reduced to less than GBP50 million: 1/12 of
GBP350,000 per month; and
-- for the third year (the 25(th) to 36(th) month) following the
NAV first being reduced to less than GBP50 million: 1/12 of
GBP200,000 per month.
For the fourth year and beyond (37(th) month and beyond)
following the NAV first being reduced to less than GBP50 million,
the monthly management fee shall again be as it is currently
(without any minimum amount requirement), which is 1/12 of 1.0 per
cent. Per month of the NAV.
The interests of the Company and the Investment Manager are
currently aligned under the existing management fee arrangements
based on the existing investment objective and policy. However, in
view of the proposed changes to the investment objective and
policy, the management fee arrangements are proposed to be amended
(as described above) to ensure that alignment is preserved. In
particular, it is in the interest of the Company for the orderly
realisation process to be conducted efficiently, which would
necessarily involve a gradual decrease in the NAV as value is
realised and distributed to Shareholders. In contrast, the existing
management fee is directly linked to the NAV, which may incentivise
the Investment Manager to delay realisations so as to preserve the
NAV at least at a level below which the Investment Manager's costs
would exceed the management fee it earns. It is therefore proposed
that, upon the changes to the investment objective and policy
coming into effect, the management fee should be subject to a
minimum amount as described above, which seeks to take into account
the Investment Manager's workload and the continuing alignment of
interests at that time as the Company shrinks through returning
capital. Furthermore, it is proposed that the minimum management
fee arrangement would only be in place for a three-year period so
as to help incentivise the Investment Manager to complete the
orderly realisation process within a reasonable timeframe without
undue delay, following which the fee will revert to 1/12 of 1.0 per
cent. Per month of the NAV and cause an expected reduction in the
amount of management fees paid to the Investment Manager.
Performance fee
It is proposed that the Investment Manager shall not be entitled
to receive any performance fee unless both the High Water Mark
Condition and the Investment Hurdle Condition are met.
Provided that the cumulative aggregate cash returned to
Shareholders pursuant to one or more Distribution Event(s) totals
an amount which is at least the High Water Mark NAV Amount of
GBP317,614,783 (the " High Water Mark Condition "), upon each
Distribution Event, the Investment Manager shall, subject to the
Investment Hurdle Condition as set out below, be entitled to
receive 20 per cent. Of the Excess being returned to Shareholders
at that Distribution Event, provided that the Adjusted Net Asset
Value as at the date of such Distribution Event exceeds the
Adjusted Hurdle Value (the " Investment Hurdle Condition ").
Set out in Part 4 of this Circular is a summary of the current
management fee and performance fee arrangements under the existing
Investment Management Agreement.
Set out in Part 5 of this Circular is a summary of the proposed
changes to the management fee and performance fee arrangements
under the Side Letter.
Just as the management fee is proposed to be amended to seek to
align the interests of the Company and the Investment Manager,
changes to the performance fee are also proposed. While it is in
the interests of the Company for the orderly realisation process to
be conducted efficiently, it is also crucial that this is balanced
against the aim to maximise value. Accordingly, two aspects of the
performance fee are proposed to be amended: (1) the point at which
the performance fee crystallises; and (2) the requirements to be
met before the Investment Manager is entitled to receive any
performance fee.
The proposed change from annual crystallisation of any
performance fee to performance fee payment points being linked to
actual distributions to Shareholders seeks to align the interests
of the Company and the Investment Manager, as it is intended that
this proposed amendment would help incentivise the Investment
Manager to return cash to Shareholders promptly, with performance
fees only being paid upon actual returns of cash to Shareholders,
as opposed to upon any unrealised gains. Furthermore, the proposed
introduction of the High Water Mark Condition is intended to help
incentivise the Investment Manager to maximise the value to be
realised on the sale of the Company's investments and to ensure
that the Company does not pay performance fees on future NAV growth
on which a performance fee was paid to the Investment Manager in
the past.
Related party transaction
Under the Listing Rules, the Investment Manager is deemed a
related party of the Company and the proposed amendments to the
Investment Management Agreement constitute a related party
transaction requiring the approval of the Independent Shareholders
before they may be implemented.
The Investment Manager has undertaken not to vote, and to take
all reasonable steps to ensure that its associates do not vote, on
Resolution 2. As at the Latest Practicable Date, the Investment
Manager holds approximately 0.81 per cent of the Shares.
Acquisition Requirement
Separate to the above-mentioned related party transaction, the
previously-existing requirement on the Investment Manager (provided
that it would be lawful to do so and where Shares are trading at a
discount to their prevailing NAV at any times during the five
business day period beginning on the business day of the NAV
announcement in respect of any month) to undertake to use
reasonable endeavours to purchase Shares at such times during such
five business day period in an amount equal to 1/12 of 0.2 per
cent. Of the NAV as at the NAV Calculation Date in respect of that
month ( " Acquisition Requirement " ) has now been removed and this
change came into effect as from 31 March 2023.
4 Return of capital
The Board will keep Shareholders informed of its intentions
concerning returns of capital, mechanisms for which may include (as
well as the payment of dividends) tender offers, other schemes for
the return of capital and/or the buying back of Shares as the
portfolio is realised. Throughout, the Board will follow the
principle of seeking to balance the optimum scale and accompanying
costs to the Company of the relevant method of return with the
desire to accomplish that return as quickly as practicable, without
eroding the value to be distributed.
Amounts becoming available for return will come from contractual
repayments by borrowers to the Company and from the disposal of
portfolio assets, potentially after the repayment and cancellation
of some or all of the Company's bank facilities.
The Board currently expects to continue paying dividends at the
current rate for at least a year and potentially longer. The
Company intends to maintain its investment trust status during this
managed realisation process prior to liquidation.
The Board also expects to propose that the Company enters into
voluntary liquidation at a point when the realisations and returns
of capital have caused the Company to become too small to justify
the costs of retaining a listing for its Shares or otherwise at a
point when the Board considers the Company's remaining portfolio
would be likely to cease, in the near term future, to continue to
provide a spread of investment risk that is reasonable in the
circumstances.
5 Benefits of the Proposals
The Board believes that the Proposals offer the following
significant benefits to Shareholders:
-- Commencing a managed realisation of assets, rather than
placing the Company in liquidation immediately or seeking an
immediate sale of the portfolio, is expected to enable the Company
to maximise the value realised on the sale of its investments.
-- Maintaining the listing of the Company's Shares while the
substantial majority of its assets are realised will, subject to
market conditions, enable Shareholders and prospective investors to
continue to be able to buy and sell the Company's Shares in this
period before the Company then enters voluntary liquidation.
-- The realisation process will enable Shareholders to realise
the value of their investment at a price over a period of time
which should be closer to NAV than that which they may have
received by trading their Shares prior to the date of this document
given the discount to NAV per Share at which the Shares have
traded.
-- The Investment Manager would be appropriately incentivised
through the revised fee arrangements to maximise realisation
proceeds throughout the entire disposal process in a timely manner
consistent with a prompt return of cash to Shareholders. The
revised fee proposal would thus be more appropriate for the amended
investment objective and policy while also ensuring better
alignment between Shareholders and the Investment Manager. Fixed
management fees alone could not achieve this degree of
alignment.
-- The revised fee arrangements would ensure a full NAV return
(i.e., the High Water Mark NAV Amount) of cash to Shareholders
before any performance fees are paid to the Investment Manager.
-- Further, Shareholders will not pay performance fees on
unrealised gains in the future which ensures the Investment Manager
is only paid from realisable and returned capital proceeds and
mitigates against disposals at a discount to expedite an expected
voluntary liquidation of the Company.
6 Risk Factors
As a result of the Proposals, Shareholders should be aware of
the following risk factors:
-- There is no guarantee that the change to the Company's
investment objective and policy will provide the returns or realise
the capital sought by Shareholders. There can be no guarantee that
the Company will achieve its new investment objective.
-- The market value and the NAV of the Shares may go down as
well as up. The market value of the Shares at any particular time
may vary significantly and not reflect the underlying NAV.
Shareholders may not get paid the amount they originally invested
on a sale of their Shares or on a liquidation of the Company.
-- Running costs of the Company, sales commissions, asset
liquidation costs, taxes and other costs associated with the
realisation of the Company's assets will reduce the cash available
for any distribution to Shareholders. No assurance can be given
that all cash received on future realisations of the Company's
investments will be returned as capital.
-- As a result of the portfolio realisation, the number of
investments held by the Company will reduce over time and, as a
consequence, the aggregate return on the remaining portfolio will
become increasingly exposed to the performance, favourable or
unfavourable, of the remaining individual investments. This could
have the effect of making performance more volatile.
-- The proposed change of investment objective and policy would
result in the Company becoming reliant on the Investment Manager's
ability to dispose of investments in order to realise capital for
Shareholders.
-- At the point the Company enters into voluntary liquidation,
it is likely to be uncertain how long it will take until full
realisation is achieved and a final distribution can be made by the
liquidator. On entering voluntary liquidation the Company will
cease to maintain its listing and Shareholders should thereafter no
longer expect to be able to buy and sell Shares through the London
Stock Exchange. Information concerning the value of remaining
assets held, the split between cash and assets remaining to be
realised, and the timings and the likely amounts of distributions
may become less frequently available following the appointment of a
liquidator.
-- The Company's level of gearing may increase as a result,
inter alia, of further draw downs to honour commitments to funds
under existing contractual arrangements, revaluations of the
portfolio or realisation of assets at less than their carrying
value. An increased level of gearing would increase Shareholders'
exposure to realisation values.
-- The passing of Resolution 1 (to amend the investment policy
to facilitate a managed wind-down of the Company) is not
conditional upon the passing of Resolution 2 (to amend the
Investment Management Agreement). Therefore, should Resolution 1 be
passed and should Resolution 2 fail to be passed, the result will
be that the Company's investment policy will be amended (to
facilitate its managed wind-down) and yet the current management
fee and the performance fee arrangements will nonetheless continue
to remain in place for so long as the Investment Manager remains
appointed as the investment manager to the Company pursuant to the
Investment Management Agreement. In such case, there is the risk
that, under the current fee arrangements, the interests of the
Shareholders may not be fully aligned to those of the Investment
Manager. Should Resolution 2 fail to be passed at the General
Meeting, the Board does not believe that further re-negotiations on
the management fee or the performance fee with the Investment
Manager in the future would be a realistic possibility.
-- The passing of Resolution 2 (to amend the Investment
Management Agreement) is conditional upon the passing of Resolution
1 (to amend the investment policy to facilitate a managed wind-down
of the Company). Therefore, should Resolution 1 fail to be passed,
Resolution 2 shall not be proposed, and the result will be that
neither the Company's investment policy nor the current management
fee and performance fee arrangements will be amended. Furthermore,
given that the proposal to amend the investment policy to
facilitate a managed wind-down of the Company represents a 100%
exit opportunity the Board will not be putting forward a separate
25% Exit Opportunity.
-- There is no guarantee that the change to the Company's
investment objective and policy will provide the returns or realise
the capital sought by Shareholders. There can be no guarantee that
the Company will achieve its new investment objective.
-- The market value and the NAV of the Shares may go down as
well as up. The market value of the Shares at any particular time
may vary significantly and not reflect the underlying NAV.
Shareholders may not get paid the amount they originally invested
on a sale of their Shares or on a liquidation of the Company.
-- Running costs of the Company, sales commissions, asset
liquidation costs, taxes and other costs associated with the
realisation of the Company's assets will reduce the cash available
for any distribution to Shareholders. No assurance can be given
that all cash received on future realisations of the Company's
investments will be returned as capital.
-- As a result of the portfolio realisation, the number of
investments held by the Company will reduce over time and, as a
consequence, the aggregate return on the remaining portfolio will
become increasingly exposed to the performance, favourable or
unfavourable, of the remaining individual investments. This could
have the effect of making performance more volatile.
-- The proposed change of investment objective and policy would
result in the Company becoming reliant on the Investment Manager's
ability to dispose of investments in order to realise capital for
Shareholders.
-- At the point the Company enters into voluntary liquidation,
it is likely to be uncertain how long it will take until full
realisation is achieved and a final distribution can be made by the
liquidator. On entering voluntary liquidation the Company will
cease to maintain its listing and Shareholders should thereafter no
longer expect to be able to buy and sell Shares through the London
Stock Exchange. Information concerning the value of remaining
assets held, the split between cash and assets remaining to be
realised, and the timings and the likely amounts of distributions
may become less frequently available following the appointment of a
liquidator.
-- The Company's level of gearing may increase as a result,
inter alia, of further draw downs to honour commitments to funds
under existing contractual arrangements, revaluations of the
portfolio or realisation of assets at less than their carrying
value. An increased level of gearing would increase Shareholders'
exposure to realisation values.
-- The passing of Resolution 1 (to amend the investment policy
to facilitate a managed wind-down of the Company) is not
conditional upon the passing of Resolution 2 (to amend the
Investment Management Agreement). Therefore, should Resolution 1 be
passed and should Resolution 2 fail to be passed, the result will
be that the Company's investment policy will be amended (to
facilitate its managed wind-down) and yet the current management
fee and the performance fee arrangements will nonetheless continue
to remain in place for so long as the Investment Manager remains
appointed as the investment manager to the Company pursuant to the
Investment Management Agreement. In such case, there is the risk
that, under the current fee arrangements, the interests of the
Shareholders may not be fully aligned to those of the Investment
Manager. Should Resolution 2 fail to be passed at the General
Meeting, the Board does not believe that further re-negotiations on
the management fee or the performance fee with the Investment
Manager in the future would be a realistic possibility.
-- The passing of Resolution 2 (to amend the Investment
Management Agreement) is conditional upon the passing of Resolution
1 (to amend the investment policy to facilitate a managed wind-down
of the Company). Therefore, should Resolution 1 fail to be passed,
Resolution 2 shall not be proposed, and the result will be that
neither the Company's investment policy nor the current management
fee and performance fee arrangements will be amended. Furthermore,
given that the proposal to amend the investment policy to
facilitate a managed wind-down of the Company represents a 100%
exit opportunity the Board will not be putting forward a separate
25% Exit Opportunity.
7 General Meeting
The Proposals require the approval by Shareholders at the
General Meeting which has been convened for 2.00 p.m. on 12 June
2023.
The Resolutions will be proposed as ordinary resolutions. An
ordinary resolution requires a majority of members entitled to vote
and present in person or by proxy to vote in favour in order for it
to be passed.
Resolution 2 is conditional upon the passing of Resolution 1.
Therefore, if Resolution 1 fails to be passed, Resolution 2 will
not be proposed.
If Resolution 2 fails to be passed, the current management fee
and the performance fee arrangements will remain on their existing
terms as set out in the Investment Management Agreement, for so
long as the Investment Manager remains appointed as the investment
manager to the Company pursuant to the Investment Management
Agreement.
In accordance with the Articles, all Shareholders present in
person or by proxy shall upon a show of hands have one vote and
upon a poll shall have one vote in respect of each Share held. In
order to ensure that a quorum is present at the General Meeting, it
is necessary for two Shareholders entitled to vote to be present,
whether in person or by proxy (or, if a corporation, by a
representative).
The formal notice convening the General Meeting is set out at
the end of this Circular.
9 Recommendation
The Board considers that the Proposals are in the best interests
of the Company and its Shareholders as a whole.
In the opinion of the Board the proposed amendments to the
Investment Management Agreement are fair and reasonable as far as
Shareholders are concerned and the Directors have been so advised
by Winterflood Securities Limited (acting in its capacity as
sponsor to the Company). In providing its advice to the Board
Winterflood Securities Limited has taken into account the Board's
commercial assessment of the Proposals.
Accordingly, the Board unanimously recommends that Shareholders
vote in favour of the Resolutions to be proposed at the General
Meeting.
The Directors intend to vote in favour, or procure the vote in
favour, of the Resolutions at the General Meeting in respect of
their own beneficial holdings of Shares which, in aggregate, amount
to 718,240 Shares representing approximately 0.2 per cent. of the
Company's issued Share capital (excluding Shares held in
treasury).
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
CIRAFMJTMTABBFJ
(END) Dow Jones Newswires
May 16, 2023 09:58 ET (13:58 GMT)
Vpc Specialty Lending In... (LSE:VSL)
Gráfica de Acción Histórica
De Feb 2024 a Mar 2024
Vpc Specialty Lending In... (LSE:VSL)
Gráfica de Acción Histórica
De Mar 2023 a Mar 2024