Dexion Absolute Limited (in Voluntary
Liquidation) (the “Company”)
Shareholder Update
Pursuant to the Company’s circular to shareholders dated
26 February 2016 (“the Circular”), on
23 March 2016, Linda Maree Johnson and Ashley Charles Paxton were appointed as the
Joint Liquidators (“the Liquidators”) of the Company.
In respect of the Company’s shareholding in Aurora Offshore Fund
II Limited (“AOFL II”), the Company’s main investment position, a
full redemption request was duly submitted on behalf of the Company
by the appropriate agent.
Redemption Profile
On 6 May 2016, the Liquidators
received a shareholder communication from AOFL II’s investment
advisor, Aurora Investment Management L.L.C. (“the Investment
Advisor”), notifying shareholders of AOFL II that voluntary
redemptions had been suspended, including redemptions that had been
requested for future redemption dates. The Investment Advisor
further noted that AOFL II would return capital to its shareholders
pursuant to a single schedule regardless of whether or not a
shareholder had previously submitted a redemption request. As
noted above, a redemption request had previously been duly
submitted on behalf of the Company.
This has resulted in a change to the Company’s redemption
profile with respect to AOFL II and will, therefore, have a direct
impact as to the quantum and timing of the Company’s planned
distributions to its shareholders, as had been originally outlined
in the Circular.
As such rather than receiving the full redemption proceeds from
AOFL II, as was envisaged per the Circular, the Liquidators
understand from the Investment Advisor that the Company will
receive approximately 60% of the net asset value (“NAV”) of the
Company’s investment in AOFL II during August 2016 – this is currently estimated to be
in the region of USD 70m. The Company
expects to receive further balances in respect of its holdings in
AOFL II during 2017.
The Liquidators have taken formal legal advice with respect to
the position taken by the Investment Advisor with regard to the
full redemption request submitted by the Company prior to the
suspension of voluntary redemptions. Further to that advice, the
Liquidators understand that they are not in a position to challenge
the actions of the Investment Advisor and, as a result, are obliged
to follow the distribution schedule adopted by the Investment
Advisor.
Hedging
As shareholders are aware, the Company operates a single
Sterling denominated share class, whilst the Company’s investment
in AOFL II is designated in US Dollars. The Company has
historically maintained a Sterling/US Dollar hedge with respect to
its holding in AOFL II.
The functions of a liquidator are restricted to the realisation
of the estate assets and the distribution of the proceeds of those
realisations to the entity’s stakeholders. The liquidator is
therefore precluded from adopting a speculative position, including
the commissioning of a financial hedging instrument.
Accordingly, the Liquidators wish to inform the Company’s
shareholders that the current hedge will be concluded on
29 July 2016, after which point
shareholders should look to obtain their own hedging coverage
should they wish to continue to hedge their own individual exposure
against the estimated USD 70m due in
August 2016 and the subsequent
balances expected in 2017.
Interim Liquidation Distribution
Upon receipt of the first distribution made by AOFL II during
August 2016, the Liquidators will
make an immediate interim liquidation distribution to the Company’s
shareholders. Following this first interim liquidation
distribution, the Liquidators will further assess the Investment
Advisors’ proposed distribution schedule before making further
distributions to ensure that the costs of making distributions are
minimised.
A further shareholder announcement will be made once the timing
and amount of the first interim liquidation distribution is
available.
Enquiries:
The Liquidators
Linda Johnson and Ashley Paxton
Glategny Court
Glategny Esplanade
St Peter Port
Guernsey
GY1 1WR
Tel: 01481 721 000
restructuring-ci@kpmg.com