Conversion of C Shares
11 November 2009 - 10:41PM
UK Regulatory
TIDMBRWV
RNS Number : 3423C
Bedford Row VCT PLC
11 November 2009
For Immediate Release 11 November 2009
Bedford Row VCT plc
("Bedford Row" or "the Company")
Conversion of the C Shares to Ordinary Shares
The Company announces that, today, it has posted a letter to Shareholders
setting out the background and reasons for converting the C Shares into Ordinary
Shares (the "Letter").
The Company launched a 'C' Share fundraising on 22 November 2007, which raised
GBP266,905 by the time it closed in 30 June 2008. It was a term of the C Share
issue that the C Shares would convert into Ordinary Shares by reference to a
calculation to be made at a date no later than 30 November 2010. The Directors
were also granted the authority to convert the C Shares into Ordinary Shares at
an earlier date if they consider it to be in the best interests of Shareholders
to do so.
Therefore, the Directors have decided that it is in the best interests of
Shareholders to convert the C Shares into Ordinary Shares now. The reasons why
the Board considers it to be in the best interests of Shareholders for
Conversion to happen now are as follows:
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| 1 | The fundraising of GBP266,905 under the C Share offer was a disappointing result and only 3.6% of the fund target of GBP7,500,000. |
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| | The net assets attributable to the C Share fund are estimated to be approximately GBP222,000. With such a low level of funds, it has become significantly more challenging for the Investment Manager to build a balanced portfolio while keeping sufficient liquidity for the C Share Fund to meet its running costs. |
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| 2 | More importantly the lack of funds has impacted the ability for the C Share pool to attain its 70% Inland Revenue qualifying status. For those C Shareholders who invested in November 2007 they must achieve this qualifying status and remain investors for 3 years to maintain their initial tax reliefs on their investment. If the C Shares were to become 'non-qualifying' this would result in C Shareholders having to refund the initial tax reliefs that they received. |
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| 3 | Additionally, the administrative burden of maintaining the C Share Fund also becomes disproportionately high and less cost-efficient as the size of the fund reduces. |
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| 4 | Conversion will increase the Ordinary Share Fund which will enable it to have a wider portfolio and will increase its cash resources to meet ordinary running costs. The Company will also benefit from a simplified structure of having only one class of shares and consequently avoiding the extra administrative burden of having both the Ordinary Share Fund and the C Share Fund. |
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For these reasons the Directors believe that it is appropriate for Conversion to
take place now.
As required by the Articles, the Board has made a calculation of the Conversion
Ratio, based on the Interim results to 31 August 2009, and of the number of
Ordinary Shares to be issued to C Shareholders on Conversion and has obtained
confirmation from the Auditors that the calculations are mathematically
accurate. The result is that the 266,905 C Shares in issue will convert into an
aggregate of 848,224 Ordinary Shares. This means that C Shareholders will
receive 3.178 Ordinary Shares for each C Share held rounded down to the nearest
whole number. Fractional entitlements will be ignored.
As the C Shares have a nominal value of 50p and the Ordinary Shares have a
nominal value of 10p, in order to prevent the Conversion resulting in a
reduction of share capital, the Conversion takes place by initially converting
each C Share of 50p into five Ordinary Shares of 10p and then by a further
conversion of such number of those Ordinary Shares into Deferred Shares such
that the number of Ordinary Shares remaining is equal to the number achieved by
the Conversion Calculation. The Articles provide that the Deferred Shares will
immediately be bought by the Company for a nominal sum of 1p for every 1,000,000
Deferred Shares. The Directors have the power under the Articles to take all
steps necessary to complete this purchase, including the signing of the
necessary transfer forms. No certificates for Deferred Shares will therefore be
issued.
The New Ordinary Shares will, when issued and fully paid, rank pari passu in all
respects with the Existing Ordinary Shares, including the right to receive all
dividends and other distributions declared, made or paid after the date of
Admission. Application has been made to the London Stock Exchange for the New
Ordinary Shares to be admitted to trading on the Main Market. It is expected
that such Admission will become effective and that dealings will commence on 8
December 2009.
The Letter is for the information of Shareholders only and no further action is
required by Shareholders.
Copies of the Letter are available for inspection by the public at the Document
Viewing Facility, 25 The North Colonnade, Canary Wharf, London, E14 5HS.
Contact: Richard Hargreaves, Chairman, Arc VCT on 07957 861786
Graham Urquhart, Company Secretary, Arc VCT on 0203 216 2000
William Horlick, Elderstreet Investments on 0207 831 5088
Roland Cornish, Beaumont Cornish Limited on 020 7628 3396.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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