Alternative Liquidity Fund Limited Circular and Notice of General Meeting (2999P)
07 February 2019 - 3:48AM
UK Regulatory
TIDMALF
RNS Number : 2999P
Alternative Liquidity Fund Limited
06 February 2019
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN
PART, IN OR INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD
CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION
IN PARTICULAR THE UNITED STATES, CANADA, AUSTRALIA, THE REPUBLIC
OF SOUTH AFRICA AND JAPAN
This announcement is an advertisement and not a prospectus.
This announcement does not constitute or form part of, and
should not be construed as, any offer for sale or subscription
of, or solicitation of any offer to buy or subscribe for,
any securities in Alternative Liquidity Fund Limited (the
"Company") or securities in any other entity, in any jurisdiction,
including the United States, nor shall it, or any part of
it, or the fact of its distribution, form the basis of, or
be relied on in connection with, any contract or investment
decision whatsoever, in any jurisdiction. This announcement
does not constitute a recommendation regarding any securities.
Any investment decision must be made exclusively on the basis
of the final prospectus published by the Company and any supplement
thereto.
6 February 2019
ALTERNATIVE LIQUIDITY FUND LIMITED
Registered in Guernsey - Number 60552
Registered Office:
Sarnia House, Le Truchot,
St Peter Port, Guernsey, GY1 1GR
PUBLICATION OF CIRCULAR
The Proposals
The Board stated in the Company's annual report and accounts
for the year to 30 June 2018 that it, together with the Company's
investment manager, Warana Capital, LLC, (herein referred
to as the "Investment Manager" or "Warana Capital") have been
exploring various growth strategies for the Company and the
scope of the Company to offer new share classes for illiquid
assets and portfolios similar to the Company's current illiquid
investment portfolio.
The Board is pleased to announce its proposals to introduce
a new class of ordinary shares (herein referred to as the
"Ordinary Shares") pursuant to an Initial Placing, Offer for
Subscription and subsequent Placing Programme the net proceeds
of which will be used to invest in a diversified portfolio
of illiquid funds, funds of funds and other assets including
the new segregated portfolio of the Warana SP Master Fund
SPC (herein referred to as the "Warana Master Fund"). As part
of these proposals it is intended that the Company's existing
ordinary shares will be re-designated as realisation shares
(the "Realisation Shares") and the Company's existing assets
currently held within its existing portfolio would be attributable
to the realisation portfolio (the "Realisation Portfolio")
which will be realised as rapidly as possible and the proceeds
returned to Realisation Shareholders (the "Proposals").
The Company has today published a circular including notice
of an extraordinary general meeting to be held at 9 a.m. on
25 February 2019 at Sarnia House, Le Truchot, St Peter Port,
Guernsey GY1 1GR (the "EGM") to seek authority from the Company's
shareholders for the Proposals (the "Circular").
As part of the Proposals the Board is recommending that:
-- the Company's investment policy be amended in order
to allow the Company to create new share classes for
separate investment portfolios and to specifically
allow the Company to act as a feeder fund and invest
the assets of any of its portfolios either directly
or indirectly into master funds (including the Warana
Master Fund);
-- the Company's current articles of association be
amended and new articles adopted (the "New Articles")
in order to inter alia change the name of the
existing ordinary shares to Realisation Shares, to
provide for the rights of the new class of Ordinary
Shares as well as the Realisation Shares and to
extend the continuation vote from being held at the
annual general meeting of the Company in 2020 to 2023
and then every second year thereafter;
-- Shareholders approve the disapplication of the
pre-emption rights contained in the New Articles so
that the Board will have authority to allot and issue
up to 100 million new Ordinary Shares pursuant to the
Initial Placing and Offer for cash on a non
pre-emptive basis; and
-- Shareholders grant the Board the discretion to buy
back up to 14.99 per cent of the Ordinary Shares in
issue on the admission of the Ordinary Shares to the
UK Listing Authority's official list and to trading
on the main market of the London Stock Exchange.
In addition, Sunrise Partners Limited Partnership ("Sunrise
Partners") and LIM Advisers Limited the manager of the LIM
Asia Special Situations Master Fund Limited ("LIM"), both substantial
shareholders in the Company, have indicated that they may subscribe
for new Ordinary Shares under the Initial Placing and/or the
Placing Programme. The further issue of Ordinary Shares to
Sunrise Partners and LIM under the Initial Placing and/or the
Placing Programme would constitute related party transactions
for the purpose of the UK Listing Authority's Listing Rules
and accordingly the Company is seeking approval for these transactions
from the relevant independent shareholders at the EGM.
If the Proposals are approved by shareholders, the Company
intends to publish a prospectus, introduce the Initial Placing,
Offer for Subscription and subsequent Placing Programme the
net proceeds of which will be attributable to the Ordinary
Portfolio and will be used to invest in a diversified portfolio
of investments in line with the new investment policy, including
the Warana Master Fund. The Supplemental Agreement to the
Investment Management Agreement, is proposing to introduce
the new management fee that will be payable to the Investment
Manager in relation to this new Ordinary Portfolio. It will
also extend Warana Capital's initial term of management and
provide that either party may give to the other not less than
12 months' notice to terminate the management arrangements
provided that such notice will only be able to be given after
the conclusion of the Company's annual general meeting in
2023. Under the Investment Management Agreement the initial
term currently runs until 30 September 2020. The extension
is being proposed to allow the new Ordinary Portfolio enough
time to mature and realise its maximum return. The entering
into of the Supplemental Agreement to the Investment Management
Agreement by the Company
will constitute a related party transaction for the purpose
of the Listing Rules and accordingly the Company is also seeking
approval for this transaction from the relevant independent
shareholders at the EGM.
If the Proposals become effective, the Realisation Portfolio's
strategy will be to realise the underlying assets in the Realisation
Portfolio as quickly as possible while also seeking to preserve
value. It is not currently intended that the assets held within
the Realisation Portfolio will be sold on a fire sale basis.
The Company has already made six capital distributions and
has announced a seventh in the form of redeemable B shares
totalling US$0.20 per existing share.
It is unlikely that any new investments will be acquired by
the Realisation Portfolio and, as a result of this portfolio
going into wind down, it is expected that it will become more
concentrated over time as assets are sold.
In the event that the Proposals are not approved by the Company's
shareholders, the Proposals will not become effective. The
Company's existing shares will not be reclassified, the Company
will not publish a prospectus and no new Ordinary Shares will
be issued nor will it enter into the Supplemental Agreement
to the Investment Management Agreement. In such an event,
the Company will continue with its existing investment strategy
and the Investment Manager may deem that additional capital
might be needed to be added to certain assets in order to
preserve longer term value.
Benefits of the Proposals
The Board believes that the Proposals offer the following
benefits for the Company's shareholders:
-- the Company's existing portfolio (to be renamed the
Realisation Portfolio) will be realised as rapidly as
is optimal and the proceeds returned to the Company's
existing shareholders (to be renamed the Realisation
Shareholders);
-- increasing the Company's issued share capital through
the Initial Placing, Offer for Subscription and
subsequent Placing Programme should result in the
fixed costs of the Company being spread over a larger
asset base and the ongoing expense ratio in respect
of the Company's existing portfolio being lower than
would otherwise be the case;
-- the automatic conversion rights included in the New
Articles provide Realisation Shareholders with the
potential for higher capital returns over a
longer-term recovery period as opposed to a portfolio
liquidation driven by size and cost constraints; and
-- the Proposals provide an improved investment
proposition by diversifying the Company's investment
base and offering new Ordinary Shareholders exposure
to the wide range of assets within the Warana Master
Fund with the aim of providing investors with
attractive risk-adjusted returns over a multi-year
period.
Indicative timetable
An indicative timetable of principal events is as follows:
Event Indicative Timing
EGM
Latest time and date for receipt of 9 a.m. on 21 February
Forms of Proxy for use at the EGM
EGM 9 a.m. on 25 February
Issue of Ordinary Shares under the
Initial Placing and Offer
Latest time and date for receipt of 11.00 a.m. on 17 April
application forms under the Offer
Latest time and date for receipt of 3.00 p.m. on 17 April
commitments under the Initial Placing
Results of Initial Placing and Offer 18 April
announced
Admission to listing and dealings commence 8.00 a.m. on or around
in the Ordinary Shares issued under 23 April
the Initial Placing and Offer
General
In deciding whether or not to vote in favour of the Resolutions
at the EGM to implement the Proposals, Shareholders should
rely only on the information contained in, and should follow
the procedures described in, the Circular.
Copies of the Circular will shortly be available for inspection
at the National Storage Mechanism which is located at http://www.morningstar.co.uk/uk/nsm.do.
Copies of the Circular are also available in electronic form
on the Company's website at www.waranacap.com and are available
for collection, free of charge, during normal business hours
on any working day (Saturday, Sunday and public holidays excepted)
until 25 February 2019 from the offices of Dickson Minto W.S.,
Broadgate Tower, 20 Primrose Street, London EC2A 2EW.
For further information please contact:
Warana Capital, LLP +44 (0) 20 3551 2917
Tim Gardner tg@waranacap.com
Praxis Fund Services Limited +44 (0) 1481 737600
info@pfs.gg
Notes:
The information contained within this announcement is deemed
by the Company to constitute inside information as stipulated
under the Market Abuse Regulation (EU) No. 596/2014. Upon the
publication of this announcement via a Regulatory Information
Service this information is now considered to be in the public
domain.
This announcement is for information purposes only and does
not purport to be full or complete and any decision regarding
the Proposals should be made only on the basis of the Circular.
Neither the contents of the Company's website nor the contents
of any website accessible from hyperlinks on the Company's
website (or any other website) is incorporated into, or forms
part of, this announcement
This announcement may include statements that are, or may be
deemed to be, "forward-looking statements". These forward-looking
statements can be identified by the use of forward-looking
terminology, including the terms "believes", "estimates", "anticipates",
"expects", "intends", "may", "will" or "should" or, in each
case, their negative or other variations or comparable terminology.
All statements other than statements of historical facts included
in this announcement, including, without limitation, those
regarding the Company's financial position, strategy, plans,
proposed acquisitions and objectives, are forward-looking statements.
Forward-looking statements are subject to risks and uncertainties
and, accordingly, the Company's actual future financial results
and operational performance may differ materially from the
results and performance expressed in, or implied by, the statements.
These forward-looking statements speak only as at the date
of this announcement and cannot be relied upon as a guide to
future performance. The Company, Warana Capital, LLC, Praxis
Fund Services Limited and Dickson Minto W.S. expressly disclaim
any obligation or undertaking to update or revise any forward-looking
statements contained herein to reflect actual results or any
change in the assumptions, conditions or circumstances on which
any such statements are based unless required to do so by the
Financial Services and Markets Act 2000, the Prospectus Rules
of the Financial Conduct Authority or other applicable laws,
regulations or rules.
LEI: 213800R5CHD76J3LU713
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END
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