TIDMCGW
RNS Number : 9466R
Chelverton Growth Trust PLC
01 November 2023
RNS
1 November 2023
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY IN, INTO OR FROM ANY JURISDICTION
WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR
REGULATIONS OF THAT JURISDICTION
Chelverton Growth Trust Plc
(the Company)
Recommended proposals for members' voluntary liquidation of the
Company
and
Notice of General Meeting
Highlights
-- Recommended proposals for members' voluntary liquidation of the Company
-- General Meeting to be held on Monday 27 November 2023
-- Solvent distribution of certain assets in specie to
Shareholders and realisation for cash of the Company's other
assets, with a return of that cash (net of costs and other
liabilities) to Shareholders
This summary should be read in conjunction with the full text of
this announcement.
Capitalised terms used but not defined in this announcement will
have the same meaning given to them in the Circular.
Introduction
In recent years, the Company's strategy has been to return cash
to Shareholders via a series of tender offers. In total, 71% of the
equity (GBP5.4 million by value) has been returned. The Board has
concluded that the reduced size of the Company and its small number
of investments preclude a further tender offer, and as reported in
the Company's annual report and accounts, it has for some time been
investigating other options to maximise the return of funds to
Shareholders. Unfortunately, this process has been necessarily
drawn out due to major economic events including Brexit, Covid 19
and the Russian invasion of Ukraine. These events have served to
create market uncertainty and turmoil such that only in recent
months has the Board felt able to move forward with its plans
within a more stable economic environment.
After careful consideration, and following discussions with the
Investment Manager, the Board believes that it is in Shareholders'
best interests that the Company be wound up, with the intention
that there will be an orderly, solvent distribution of certain
assets in specie to Shareholders and realisation for cash of the
Company's other assets, with a return of that cash (net of costs
and other liabilities) to Shareholders. The Board has, therefore,
resolved to recommend to Shareholders that a members' voluntary
liquidation of the Company be undertaken and to cancel the
admission of its Shares to the premium listing category of the
Official List and on the Main Market. The Board's primary aim in
making this recommendation is to seek to maximise the return to
Shareholders using the most efficient route possible.
The purpose of the Circular is to provide Shareholders with
further details of the Proposals and to convene a General Meeting
at which Shareholders will be asked to approve the Proposals. No
further distributions will be paid by the Company pending the
voluntary liquidation of the Company.
The General Meeting will be held at the offices of Charles
Russell Speechlys LLP, 5 Fleet Place, London, EC4M 7RD at 3.00 p.m.
on Monday 27 November 2023.
The business to be conducted at the General Meeting is set out
in the Notice of General Meeting. Shareholders will be asked to
consider and vote on the Resolution set out in the Notice. An
explanation of the Resolution is given below.
Background to the Proposals
The Company was launched in November 1994 with the intention to
provide capital growth.
The remaining assets of the Company of approximately GBP2.9
million net of creditors and other liabilities as at 23 October
2023 are equivalent to approximately 53 pence per Share. The Board
and the Investment Manager are of the opinion that the Company is
sub-scale and that the Company's ongoing charges ratio renders the
ongoing operation of the Company uneconomic.
The Board considers that the reduced size of the Company and its
small number of investments preclude a further tender offer, and it
has been considering other options to return funds to
Shareholders.
The Board has accordingly concluded that a members' voluntary
liquidation of the Company should be undertaken, with the Company's
shareholding in CEPS plc (comprising in terms of value,
approximately 75% of the Company's remaining assets) being
distributed in specie pro rata to Shareholders, with the Company's
other investments being sold, and the proceeds used to satisfy
creditors and the costs of the members' voluntary liquidation, with
the remaining small cash balance being distributed to
Shareholders.
CEPS plc is an AIM-listed, industrial trading holding company
that combines the benefits of the financial structuring of private
equity funding with the entrepreneurial drive and flair of
incentivised management teams. Further information about CEPS can
be found on its website www.cepsplc.com .
The Company's existing Investment Management Agreement, and the
associated obligations of the parties, will terminate automatically
in accordance with the terms of the relevant agreements on the
Company's entry into liquidation with no further amounts payable in
respect of such arrangements.
Further details of the Resolution required to be passed to allow
the implementation of the Proposals are set out below.
The members' voluntary liquidation
The Board is recommending that the Company be placed into
members' voluntary liquidation. This requires the approval of
Shareholders at the General Meeting.
It is proposed that Milan Vuceljic and Michael Solomons, both
licensed insolvency practitioners of Moorfields Advisory Limited,
82 St John Street, London ECM 4JN be appointed as joint liquidators
of the Company (the "Liquidators"), and that their remuneration
shall be determined in accordance with the letter of engagement
between the Liquidators and the Company and as set out in in the
Resolution. Further details regarding the Liquidators' proposed
engagement and remuneration as agreed by the Directors can be made
available on request to the Company Secretary, ISCA Administration
Services Limited (01392 487056).
The winding-up of the Company will be a solvent winding-up in
which it is intended that all creditors will be paid in full. The
winding up will require a declaration of solvency to be sworn by
the Directors. The appointment of the Liquidators becomes effective
immediately upon the passing of the Resolution at the General
Meeting, at which point the powers of the Directors will cease.
The Liquidators will then assume responsibility for the
winding-up of the Company, including the realisation of the
remaining assets of the Company, the payment of fees, costs and
expenses, the discharging of the liabilities of the Company, and
the distribution of the Company's surplus assets to
Shareholders.
The Liquidators intend to return the majority of the remaining
net asset value to Shareholders by the in specie distribution pro
rata to Shareholders of the Company's shareholding in CEPS plc, the
AIM listed industrial holding company in which the Company owns
5,460,301 shares. The Board believes that the Company's other
assets and investments should be best realised, when appropriate to
do so, given their size and illiquidity, and this is a policy which
the Company have been pursuing. The net proceeds of the realisation
of the Company's assets will be distributed to Shareholders after
the Company's outstanding liabilities and the costs of implementing
the Proposals, including the Liquidators' fees, have been met. The
shares of the Company have historically traded at steep discount to
the asset value of the Company and this strategy should enable
higher value to be reflected for Shareholders, by removal of the
future costs of the running the Company and the distribution of net
cash and the direct ownership of shares in CEPS plc.
In order to facilitate the implementation of the Proposals, the
Shares will be suspended from listing on the Official List and from
trading on the London Stock Exchange with effect from 7.30 a.m. on
Monday 27 November 2023, being the date of the General Meeting.
If the Resolution is subsequently passed at the General Meeting,
this will also result in the cancellation of the listing of the
Shares on the Official List and the Shares ceasing to trade on the
London Stock Exchange. It is expected that the cancellation of
listing and trading would take effect from 8.00 a.m. on Tuesday 28
November 2023.
Distributions to Shareholders
Assuming the Resolution is passed, the Liquidators expect to
make an initial in specie distribution pro rata to Shareholders of
the Company's shares in CEPS plc, the AIM listed industrial holding
company in which the Company owns 5,460,301 shares. Because David
Horner and his family are currently beneficially interested in
6,299,000 ordinary shares in CEPS plc (representing 29.99% of the
issued share capital of that company), any increase in that family
shareholding may have consequences under The Takeover Code, which
is currently being addressed by CEPS plc and the Horner family.
This will not delay any distribution by the Liquidators.
The Liquidators will retain sufficient funds in the liquidation
to meet the current, future and contingent liabilities of the
Company, including the costs and expenses (inclusive of VAT, if
applicable) of the liquidation not already paid at the point of
liquidation.
Once the liquidators have satisfied the claims of creditors of
the Company and paid the costs and expenses of the liquidation, it
is expected that the Liquidators will make one final cash
distribution to Shareholders, currently expected to be
approximately 5 pence per Share.
All Shareholders on the Register as at 6.00 p.m. on Friday 24
November 2023 will be entitled to any distributions made during the
course of the liquidation.
In order to comply with the Company's obligations under the UK's
domestic and international sanctions regimes, no distribution made
pursuant to the implementation of the Proposals will be paid to a
Sanctions Restricted Person.
Once in liquidation, the Company will not make any further
investments.
Suspension and cancellation of admission of the Shares to
trading on the Main Market
The register will be closed at 6.00 p.m. on Friday 24 November
2023 and the Shares will be disabled in CREST at the start of
business on Monday 27 November 2023. Accordingly, to be valid, all
transfers must be lodged before 6.00 p.m. on Friday 24 November
2023. Application will be made to the FCA for suspension of listing
of the Shares on the Official List and application will be made to
the London Stock Exchange for suspension of trading in the Shares,
in each case at 7.30 a.m. on Monday 27 November 2023. The last day
for dealings in the Shares on the London Stock Exchange on a normal
rolling two-day settlement basis will be Wednesday 22 November
2023. After Wednesday 22 November 2023, dealings should be for cash
settlement only and will be registered in the normal way if the
transfer, accompanied by the documents of title, is received by the
Registrars by close of business on Friday 24 November 2023. The
record date, being the date for determining which Shareholders are
entitled to receive liquidation distributions, is close of business
on 24 November 2023.
Transfers received after the time specified above will be
returned to the person lodging them and, if the Resolution relating
to the Proposals is passed, the original holder will receive any
proceeds from distributions made by the Liquidators.
If the Resolution relating to the Proposals is passed, the
Company will make applications for the cancellation of the
admission of the Shares to listing on the Official List and to
trading on the Main Market following the General Meeting with the
cancellations expected to take effect at 8 a.m. on Tuesday 28
November 2023.
After the liquidation of the Company and the making of the final
distribution to Shareholders (if any), existing certifications in
respect of the Shares will cease to be of value and any existing
credit of the Shares in any stock account in CREST will be
redundant.
Summary of the Resolution to be proposed at the General
Meeting
The implementation of the Proposals will require Shareholders to
vote in favour of the Resolution to be proposed at the General
Meeting.
Resolution
The Resolution is for the approval of the Company being wound-up
voluntarily and the appointment of the Liquidators for the purpose
of the winding-up. It also grants the Liquidators authority to make
distributions in specie and in cash to the Shareholders (after
payment of the Company's liabilities and after deducting the costs
of implementation of the Company's winding-up), in proportion to
their holdings of Shares in accordance with the provisions of the
Articles. It also determines the remuneration of the Liquidators by
reference to the engagement letter signed by the Company with
Moorfields Advisory Limited and in the Resolution.
The Resolution will be proposed as a special resolution. A
special resolution requires a majority of at least 75 per cent. of
votes cast by Shareholders to be cast in favour, in order for it to
be passed.
If the Resolution is not passed at the General Meeting, the
Company shall continue in operation until other proposals can be
put forward. As noted above, the Board and the Investment Manager
are of the opinion that the Company is sub-scale and that the
Company's ongoing charges ratio renders the ongoing operation of
the Company uneconomic.
Expected Timetable of Principal Events
2023
Last day of dealing in the Shares for settlement 22 November
through CREST on a normal rolling two-day settlement
basis in order to enable settlement prior to
the record date
Deadline for receipt of Forms of Proxy 3.00p.m. on 23 November
Close of Register and Record Date for participation 6.00p.m. on 24 November
in the members' voluntary liquidation
Suspension of Shares from listing on the Official 7.30 a.m. on 27 November
List and from trading on the London Stock Exchange
and CREST disablement
General Meeting 3.00p.m. on 27 November
Appointment of Liquidators 27 November
Cancellation of the listing of the Shares on 8.00a.m. on 28 November
the Official List and of the trading of the Shares
on the
London Stock Exchange
Enquiries
David Horner 01225 483030
Chelverton Asset Management Limited
dah@chelvertonam.com
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