TIDMOXH
oxford technology 2
venture capital trust plc
Proposed offer for subscription of a new class of
shares, adoption of new articles of association, adoption of investment
policy for new class of shares and Notice of General Meeting
The Company announces that it is today posting a circular to
Shareholders convening a general meeting at 11:00 a.m. on 19 November
2018 at Magdalen Centre, Oxford Science Park, Oxford, OX4 4GA to
consider the proposals as described further below. The Circular will
also be available on the OTM website (www.oxfordtechnology.com) and will
shortly be available from the National Storage Mechanism.
1. Introduction
The Board of Oxford Technology 2 Venture Capital Trust Plc today
announces its intention, subject to Shareholders' approval, to launch an
offer for subscription of a new class of shares (the B Shares) and to
appoint a third party, Chelverton Asset Management Limited (Chelverton)
to manage this new share class. It is proposed that the new funds raised
under this Offer will be invested using a more generalist investment
policy than the one that currently applies to the Company for its
Ordinary Shares.
2. Background and Summary
As the Company's portfolio has developed and been realised, the NAV of
the Company has reached a point where covering the fixed costs required
to maintain the VCT as a going concern is becoming increasingly
uneconomic, despite (in the Directors' understanding) the Company having
the lowest level of costs of any VCT. Oxford Technology Management
Limited (OTM) provides the Company with a cost cap, but this is
unsustainable in the long term.
The Directors have regularly reviewed this position and considered the
options available to the Company and its Shareholders.
One option considered was to place the VCT into voluntary wind up.
However, this would eventually crystallise the capital gains which are
currently sheltered for certain Shareholders who subscribed for Shares
when the Company was launched, as well as probably forcing a sale of the
remaining 9 investments earlier than would be optimal to maximise
Shareholder value, since a distribution in specie is neither practical
nor tax efficient. The Directors do not consider this is in the
interests of Shareholders, and have therefore looked at alternative
solutions.
The Directors considered looking to merge the Company with another VCT.
This had two disadvantages: the possibility that existing Shareholders
would lose some or all of the potential upside associated with their
legacy portfolio, and the costs associated with a merger would have
represented several years of additional cost to existing Shareholders.
The Directors could not find a merger route which was economically
beneficial for Shareholders, whilst maintaining the Ordinary Share Pool
as a distinct set of assets.
The better solution was to find a way of enlarging the asset base of the
Company to spread costs across a wider asset base. The Directors
reviewed the option of raising new funds via OTM, but OTM's focus is now
on their SEIS/EIS portfolio, given OTM's view that this is a better
wrapper for such investments these days; and as the existing portfolio
shows, the types of investment that OTM invest in tend to have a much
longer than average time horizon for eventual realisation of assets than
the majority of investors in a VCT want, as demonstrated by the
relatively small amount raised by the Company's top-up offers.
The alternative that the Directors determined as the most efficient
mechanism was to raise a new B Share class under a new Investment
Manager with all the costs of the fund raise being met by the new
Investment Manager. This allows time for the existing portfolio to be
realised for the benefit of existing Shareholders, whilst making the
costs to enable this more manageable. Any new investments will be for
the benefit of Investors in the new B Share class.
3. Offer of B Shares
For the reasons set out above, the Directors believe that the most
attractive solution for Shareholders is a proposal by Chelverton Asset
Management Limited, an experienced team with a strong track record. For
some time Chelverton has been looking into the possibility of
establishing a VCT as a new offering for their existing client base.
Following discussions on various matters (including the costs of
establishing a new VCT and the level of annual running costs of such a
new VCT), Chelverton has proposed that a new share class (the B Shares)
is created in the Company, with Chelverton appointed Investment Manager
of the Company. Chelverton would manage the investments of the B Share
Pool which will have a more generalist investment policy than the one
that applies to the existing Ordinary Share.
As regards the Company's current portfolio for existing Ordinary Shares
(the Ordinary Share Pool), the investment policy of the Company will
remain unchanged and OTM, the existing investment adviser, will continue
as Investment Adviser to the Ordinary Share Pool. It remains the Board's
intention to make distributions from the Ordinary Share Pool to Ordinary
Shareholders when appropriate realisation opportunities arise.
Chelverton is a boutique asset management business founded in 1998 with
a specialist focus on smaller quoted UK equities and unquoted SMEs.
Further detail on Chelverton and its track record is set out in section
4 below.
Both the Board and Chelverton see considerable advantages in this
proposal. One advantage to Investors in the B Shares is that the Company
is already an established VCT and raising of further funds will allow
the Company's fixed running costs to be spread over a greater asset base,
thus reducing the burden for all Shareholders. As the Company has not
undertaken a fundraising for a number of years, the Board also believes
that some existing Shareholders may be interested in subscribing for the
new class of shares in their Company.
The Company and Chelverton propose to launch an offer for subscription
in late November to early December 2018 to raise up to gross proceeds of
approximately GBP5 million through the issue of up to 5,000,000 new B
Shares (the Offer), together with an over-allotment facility of up to
approximately further GBP5 million. Existing Shareholders will be
offered the opportunity to subscribe for B Shares under the Offer at a
discount, plus an additional discount for Shareholders who subscribe for
B Shares prior to 22 March 2019. It is the intention that Shareholders
will have the option to apply for B Shares under the Offer in one or
both of tax years 2018/19 and 2019/20.
Following Admission, the name of the Company will be changed to
"Chelverton VCT Plc".
The purpose of the Circular is therefore to explain and seek
Shareholders' approval under the Act and the Listing Rules for the
necessary authorities to enable the Offer to be made, including
Resolutions to:
-- adopt new articles of association of the Company inter alia
to create B Shares and enable the Directors to change the Company's
name;
-- grant authorities to allot B Shares;
-- cancel the Company's share premium account;
-- adopt a new investment policy of the Company in respect of
B Shares;
-- cancel the Company's capital redemption reserve; and
-- grant authority to make market purchases of B Shares.
The full text of the Resolutions is set out in the Notice of General
Meeting.
It is proposed that the B Share class will form a separate pool of
capital (distinct from the Ordinary Share Pool) that will be managed by
Chelverton on behalf of the Company. The funds in the B Share Pool will
be invested in accordance with a more generalist investment policy for
the B Shares, proposed to be adopted by the Company as described in
section 6 below and set out in full at the end of this announcement,
which will reflect the expertise and experience of Chelverton.
Conditional on Admission of the B Shares, the Company proposes to
appoint Chelverton as the Company's Investment Manager and ISCA as
administrators and company secretary to the Company. Following
Admission, the Company would apply to the FCA to be registered as a
small self-managed AIFM.
Subject to Shareholders passing the Resolutions set out in the Notice of
General Meeting the Directors propose to launch the Offer through the
issue of a prospectus. It is expected that the Prospectus launching the
Offer will be published in late November to early December 2018.
4. Chelverton
Founded in 1998, Chelverton is a boutique asset management business with
a specialist focus on investing in UK listed mid and small cap equities
and unquoted SMEs. It is an independent asset management business which
is majority employee owned, with offices in Bath, Edinburgh and London
and it has 11 employees with an experienced team of 8 fund managers.
Chelverton is authorised and regulated by the FCA.
Chelverton launched its first investment trust (Chelverton Growth Trust
PLC) focused on companies traded on the Main Market and AIM with a
market capitalisation at the time of investment of up to GBP50 million
and which are believed to be at a point of change, while also investing
in unquoted investments where it is believed that there is a likelihood
of the shares becoming listed on the Official List or traded on AIM or
the investee company being sold. Chelverton then launched its flagship
investment trust with a UK Mid & Small Cap progressive income strategy
in 1999, Chelverton UK Dividend Trust PLC.
Chelverton launched its first open ended vehicle Chelverton UK Equity
Income Fund in December 2006 and then Chelverton UK Equity Growth Fund
in October 2014, each of which have become award-winning UK small and
mid-cap OEICs. Chelverton recently expanded by taking on two well-known
investment managers to run a European focused fund, Chelverton European
Select Fund. The firm currently manages 2 Investment Trusts and 3
open-ended Investment Companies investing in quoted equities, with over
GBP1bn in total assets (as at 30 September 2018).
On the unquoted side, Chelverton manages Chelverton Investor Club (the
"Club") which was established in 2009 as a specialist investor in
unquoted UK small companies. As well as managing funds, Chelverton has
invested some GBP50m in a range of privately owned SMEs.
Chelverton's unquoted investment team has developed the Club to offer
discerning investors a simple and discrete route to investing directly
in private UK companies, using its strong pedigree in managing the
acquisition of, and investment in, unquoted SMEs. This is founded on
years of extensive experience structuring bespoke investments for a
range of exacting clients, including a large family office, an AIM
traded holding company (CEPS plc) and a group of individual private
investors looking for a diversified portfolio.
Investments in which the Club has participated include Tufwell, a glass
processing and merchanting Crawley-based company, which was sold in 2018
after a four year hold, delivering just under 3x return for investors,
and Hickton, the UK's leading independent provider of specialist Clerk
of Works services in respect of building construction, civil and
structural engineering, and historic building refurbishment work.
Other recent investments, representative of the type that the B Share
Pool will be invested in include Qualification Check, the leading
provider of degree and other professional award verifications in the UK,
VeloVixen, the UK's pre-eminent on-line retailer of apparel for female
cyclists, and iDefigo, an Internet of Things business focused on 'smart'
surveillance cameras.
Many of these transactions have been sourced through
proprietary/off-market introductions, and deal-flow has been unable to
be satisfied by the investment capacity of the Club alone. Investors in
the B Share Pool will have access to the VCT-qualifying element of these
opportunities, leveraging the incremental funding capability of the Club
participants.
Chelverton believes that making a direct equity investment does not have
to be a risky, complex endeavour. They only pursue companies that
present proven business models, are backed by talented management teams
and operate in sectors with significant growth opportunities.
Biographies of the key personnel of the Investment Manager who will be
involved in the provision of services to the Company are as follows:
David Horner (Managing Director)
David is an acclaimed fund manager, specialising in small- to mid-cap
quoted investments and SME unquoted investments. He has 30 years'
experience in corporate finance assignments, identifying, structuring
and managing investments as well as purchasing and managing private
equity, specialist listed and AIM portfolios. He qualified as a
chartered accountant in 1985 and has held senior positions in Deloitte,
3i Corporate Finance and Strand Partners Limited, with several public
and private company directorships. David set up Chelverton to provide
the investment management for the investment trust now known as
Chelverton Growth Trust PLC, and was responsible for launching that
company in May 1999 and is still its manager. He has also co-managed MI
Chelverton UK Equity Income Fund since its launch, the success of which
consistently earns him a Citywire AAA fund manager rating.
Richard Bucknell (Investment Director)
Richard is a highly experienced private equity investment professional
who has led in excess of 30 investments into smaller companies since
1998, and has gone on to represent investor interests on the boards of
many of those companies following investment. Richard has helped to
shape the strategic development of these companies over time, through to
managing the realisation process on behalf of investors.
Prior to joining Chelverton, Richard held a number of senior investment
management positions at firms including Barclays Ventures, Livingbridge
(formerly ISIS Equity Partners), where he was a senior member of the
team investing on behalf of the Baronsmead VCTs, and Catapult Venture
Managers.
5. Changes to the Board and Audit Committee, Company Secretary
and Management and Administration
Conditional on, and with effect from, Admission, Ian Clifton has agreed
to join the Board. Ian has worked in investment banking including at
IBJ, ABN AMRO and West LB. He then worked for Mercer and Scottish
Widows Investment Partnership and was a founding partner of C-Suite,
advising boards of directors and senior management on strategies for
pension funding. He also provides management consultancy to a number of
companies in the disruptive technology sector.
Conditional on, and with effect from, Admission, David Livesley will
retire from the Board and James Gordon will resign as company secretary.
Robin Goodfellow will remain on the Board following Admission and retire
from the Board and the Audit Committee at the end of the next annual
general meeting of the Company. The Board is grateful for their
respective contributions to the Board.
Conditional on Admission, Alex Starling and Ian Clifton will join the
Audit Committee. It is anticipated that Richard Roth will retire from
the Audit Committee at the end of the Company's 2019 annual general
meeting and Ian Clifton will become chairman of the Audit Committee.
Conditional on Admission, ISCA will be appointed to provide
administration and company secretarial services. ISCA provides
accounting, fund administration and company secretarial services to a
number of investment trust companies including a VCT.
Conditional on Admission, the Company's management agreement with OT2
Managers Limited will be terminated and OT2 Managers Limited will
terminate its back-to-back agreement with OTM. If Shareholders approve
the Proposals by voting in favour of the Resolutions at the General
Meeting, the Company would enter into an investment management agreement
with Chelverton (conditional on Admission) immediately before the
Prospectus is published. Chelverton would be paid a management fee of
2% of the Net Asset Value of the B Share Pool with no performance fee
and would agree to pay the Company's annual running costs above a
cost-cap calculated at 3.5% of the Company's Net Asset Value as set out
in the latest audited accounts, so long as Chelverton remains the
Company's investment manager. Chelverton's appointment would be for an
initial fixed term of five years, terminable thereafter on 12 months'
notice and terminable at any time on the usual events of default. OTM
would continue to act as investment adviser to the Ordinary Share Pool
and would receive an investment advisory fee of 0.5% of the Net Asset
Value of the Ordinary Share Pool (a reduction of 0.5% in their current
fee in recognition of the fact that they will no longer be responsible
for the administration of the company or subject to a cost cap). No
change to the existing performance fee arrangements in relation to the
Ordinary Shares is being proposed, other than a waiver of such
entitlements by Alex Starling and Richard Roth.
6. Investment Policy for the B Shares
As well as the proposal to appoint Chelverton as Investment Manager of
the Company, the Directors propose that a separate investment policy be
adopted in respect of the B Shares to allow the Company to invest the
proceeds of the Offer and any subsequent fundraisings in a wider range
of Qualifying Investments than is possible under the investment policy
for the Ordinary Shares.
The investment policy for the B Shares will be to invest in a broad
range of Qualifying Investments and that the non-qualifying portfolio
will comprise units or shares in UCITS or AIF (in each case redeemable
on not more than 7 days' notice), or short term cash deposits or shares
or securities acquired on a recognised investment exchange (within the
meaning of Part XVIII FSMA).
In accordance with the Listing Rules, the Company requires Shareholders'
approval to make a material change to its investment policy. Since the
Directors believe that the adoption of a separate investment policy for
the B Shares constitutes a material change, a resolution to adopt the
investment policy, for the B shares, will be proposed at the General
Meeting.
The investment policy for the Ordinary Shares will be unchanged. Under
the New Articles, the Company's records and accounts will be kept on the
basis that the assets and liabilities of the Ordinary Share Pool can be
separately identified from those of the B Share Pool.
7. Benefits of the Offer
The Board believes that the launch of the Offer will benefit existing
Shareholders as follows:
-- spreading the fixed annual running costs of the Company
over a larger capital base;
-- providing the opportunity to invest in a generalist VCT
qualifying pool with ongoing oversight from two of the existing
Directors, allowing existing Shareholders to benefit from 30% income tax
relief and tax-free distributions;
-- offering existing Shareholders (and new Investors) a share
class with a different investment focus and with a new Investment
Manager;
-- reducing the effective cost cap (which currently excludes
Directors' fees) for existing Shareholders;
-- potentially enabling some cash retained for working capital
to be released in the form of a small special additional dividend to
existing Shareholders*;
-- offering existing Shareholders (and shareholders in the 3
other VCTs that have OTM as Investment Adviser) a loyalty incentive
discount on the Offer price;
-- allowing the Company to co-invest alongside other funds
managed by Chelverton in attractive investment opportunities; and
-- all the costs of the proposed Offer will be paid for by
Chelverton.
* this is not a profit forecast; there can be no guarantee that any
additional special dividend would be paid or of its amount but the Board
will look at this in detail following the closing of the Offer
The making of the Offer and raising of funds into the new B Share class
will necessarily extend the life of the Company since the Company will
need to continue and Investors will need to retain their shareholdings
for at least another five years after the last allotment of B Shares
under the Offer so that the B Shareholders can preserve any initial
income tax relief they may receive on their subscription for B Shares.
The extension of the life of the Company will also benefit any Ordinary
Shareholders who took advantage of capital gains tax deferral when they
subscribed for their Ordinary Shares. Once B Shares have been issued,
Ordinary Shareholders will no longer have an annual continuation vote
and the next continuation vote will be in 2025.
8. Timing of the Offer
It is intended that, subject to the passing of the Resolutions and FCA
approval of the Prospectus, the Company will launch the Offer in late
November to early December 2018.
Full details of the Offer will be set out in the Prospectus, and
Shareholders interested in investing in the Offer should read the
Prospectus in full once it is published. An announcement will be made
when the Prospectus is published. Any decision to participate in the
Offer should be made solely by reference to the information and the
terms and conditions contained in that Prospectus.
It is proposed that a first allotment of B Shares will take place on or
before 4 April 2019. Subject to the terms and conditions of the Offer,
it is the intention that Shareholders will have the option to apply for
B Shares under the Offer in one or both of tax years 2018/19 and
2019/20.
9. General Meeting
The General Meeting has been convened for 11.00 a.m. on 19 November 2018
at Magdalen Centre, Oxford Science Park, Oxford OX4 4GA. At the General
Meeting, Resolutions 2 and 5 will be proposed as ordinary resolutions,
requiring the approval of more than 50% of the votes cast. Resolutions
1, 3, 4, 6 and 7 will be proposed as special resolutions, requiring the
approval of not less than 75% of the votes cast.
The Resolutions set out in the Notice are summarised below:
Resolution 1 - Adopt the New Articles of the Company (special
resolution)
Resolution 1 will, if passed, adopt the New Articles in substitution for
the current Articles. The New Articles are in a form which is
appropriate for a premium listed Main Market traded VCT and in
conformity with the Companies Act 2006. The New Articles also include
the rights attaching to the B Shares. A summary of the key differences
between the current Articles of the Company and the New Articles which,
in the opinion of the Directors, are relevant for Shareholders, is set
out in Part III to the Circular.
A copy of the proposed New Articles is available for inspection from the
date of this Circular at the registered office of the Company and for at
least 15 minutes prior to and during the General Meeting at the place of
the General Meeting, Magdalen Centre, Oxford Science Park, Oxford OX4
4GA. A copy is also available on the OTM website
(http://www.oxfordtechnology.com).
Resolution 2 - Authority for the Board to allot shares (ordinary
resolution)
Resolution 2 will, if passed and conditional on the passing of
Resolution 1 above, give the Board authority with immediate effect to
allot shares up to an aggregate nominal amount of GBP120,000
representing, in aggregate, approximately 22.5% of the issued share
capital of the Company as at the date of the Circular. This authority
will expire on the later of 15 months after the date this resolution is
passed and the end of the Company's next annual general meeting. The
Directors intend to allot up to 5,000,000 B Shares of 1p each under the
Offer plus up to an additional 5,000,000 under the over-allotment
facility, and are also seeking approval to allot up to an additional 20%
outside the Offer, being up to a further 2,000,000 B Shares. The
Directors have no current intention of allotting further B Shares
outside the Offer and do not intend to make any further allotments of
Ordinary Shares.
Resolution 3 - Disapply statutory pre-emption rights (special
resolution)
Resolution 3 will, if passed, disapply the statutory pre-emption rights
contained in section 561 of the Act to enable the Directors to allot
equity securities for cash pursuant to the authority given under
Resolution 2 above. This authority will expire on the later of 15
months after the date this resolution is passed and the end of the
Company's next annual general meeting. The authority conferred by this
resolution will be limited to:
(i) the allotment of B Shares in connection with the Offer; and
(ii) otherwise than as set out in (i) above, an aggregate nominal amount
of 20 per cent. of the issued ordinary share capital of the Company
immediately following closing of the Offer.
Resolution 4 - Cancellation of share premium account (special
resolution)
Resolution 4 will, if passed and subject to the sanction of the Court
and conditional on the issue of B Shares by the Company pursuant to the
Offer, cancel all amounts standing to the credit of the share premium
account. The Act places restrictions on distributions by a public
limited company which can only make a distribution to the extent that
the amount of its net assets is not less than the aggregate of its
called up share capital and undistributable reserves. The share premium
account is an undistributable reserve. Currently the Company has
GBP376,000 in its share premium account relating to past issues of
Ordinary Shares and, as a result of the B Shares being issued under the
Offer, additional share premium will be created.
The additional new reserve created by the cancellation of the share
premium account will allow the Company to create a special reserve that
can be used to pay dividends, assist in writing off losses or finance
market purchases of the Company's Shares. The opportunity to cancel the
share premium account at this stage is being taken in order to save the
costs of convening a further general meeting following the closing of
the Offer. In addition, the reserve created by the cancellation may also
be used by the Company to purchase shares in the capital of the Company,
whether in the market or by a tender offer, although the Company has no
current intention of doing so.
Resolution 5 -- Adoption of investment policy for the B Share Pool
(ordinary resolution)
Resolution 5, if passed, will adopt the Company's investment policy in
respect of the B Shares. Resolution 5 is conditional on the passing of
Resolutions 1, 2 and 3 and on Admission.
Resolution 6 -- Cancellation of capital redemption reserve (special
resolution)
Resolution 6 will, if passed and subject to the sanction of the Court
and conditional on the issue of B Shares by the Company pursuant to the
Offer, cancel all amounts standing to the credit of the capital
redemption of the Company. The capital redemption reserve was created
on the repurchase of the Company's Ordinary Shares under the tender
offer in 2017.
The cancellation of this reserve, like the cancellation of share premium
account, will create further distributable reserves to assist in the
payment of dividends or to assist in the return of funds to
Shareholders.
Resolution 7 -- Authorise the Company to make market purchases of B
Shares (special resolution)
Resolution 7 will, if passed, permit the Company to make market
purchases of its own B Shares at the Directors' discretion.
The Directors will only use this authority in circumstances where a
holder of B Shares has died. This authority does not authorise or
permit the Company to make market purchases of Ordinary Shares.
10. Action to be taken
Included with the Circular is a Form of Proxy for use at the General
Meeting. Whether or not Shareholders propose to attend, they are
requested to complete and return the Form of Proxy, by post or hand, to
Neville Registrars, Neville House, Steelpark Road, Halesowen B62 8HD, so
as to be received as soon as possible, in each case to arrive not later
than 48 hours before the time of the meeting. Completion and return of a
Form of Proxy will not affect a Shareholder's right to attend and vote
at the General Meeting should he or she wish to do so.
11. Recommendation
The Board considers that the Proposals relating to the Company are in
the best interests of the Company and its Shareholders as a whole and
the Board unanimously recommends that Shareholders vote in favour of the
Resolutions to be proposed at the General Meeting, as the Directors
intend to do in respect of their own beneficial holdings of 58,033
Ordinary Shares (representing approximately 1.09% of the issued share
capital as at 19 October 2018, being the latest practicable date prior
to publication of this announcement).
This announcement contains inside information for the purposes of
Article 7 of EU Regulation 596/2014.
Enquiries: Richard Roth, Oxford Technology 2 Venture Capital Trust Plc;
richardaroth@yahoo.co.uk
Investment Policy for B Shares
Subject to Shareholders' approval of Resolution 5 to adopt the
investment policy, the investment policy of the Company in respect of
the B Shares shall be as follows:
Investment Objectives and Policy
The investment objective of the Company for the B Shares is to provide
private investors with attractive returns from a portfolio of
investments in unquoted companies including existing AIM and NEX
Exchange Growth Market (NEX) quoted companies in the United Kingdom. It
is the intention to maximise tax-free income available to Investors from
a combination of dividends and interest received on investments and the
distribution of capital gains arising from sale of assets.
By virtue of the legislative framework governing the Company, the
Company's investment policy for the B Shares has been designed to be
aligned with the need to comply with VCT legislation which is key to the
proposition being offered to Investors.
The Company will target investments in UK unquoted companies through a
range of securities including, but not limited to, ordinary and
preference shares, loan stock, convertible securities and fixed interest
securities. Unquoted investments are likely to be structured as a
combination of ordinary shares and loan stock. The Company may also
invest in stocks that are traded on the London Stock Exchange (including
AIM) and on NEX; such stocks may include ordinary shares, preference
shares and/or loan stock. As well as quoted securities, the Company may
hold investments in permitted funds, including interest bearing money
market open-ended investments companies in addition to cash on deposit.
Qualifying Investments
Compliance with the VCT rules and regulations is to be considered in
respect of all investment decisions made. While it is recognised that
venture capital investments carry a significant risk of capital loss,
the Company will aim to ameliorate that risk as far as possible by
targeting investee companies that are carrying out a qualifying trade
and have assets.
Non-Qualifying Investments
Funds not yet employed in Qualifying Investments will be managed in
accordance with VCT Rules for non-qualifying investments with the
intention of ensuring the Company has sufficient liquidity to invest in
Qualifying Investments as and when opportunities arise. The
non-qualifying portfolio will comprise units or shares in UCITS or AIFs
(in each case redeemable on not more than 7 days' notice), or short term
cash deposits or shares or securities acquired on a recognised
investment exchange (within the meaning of Part XVIII FSMA).
Risk Diversification
The Directors will control the overall risk of the Company. Chelverton,
as Investment Manager, will ensure that the B Share Pool has exposure to
a diversified range of VCT Qualifying Investments from different sectors
and that no more than 15% of the Company's assets are invested in any
one company, measured at the time of investment.
Borrowing Policy
There will be no set limit or restriction on the Company's borrowing.
However, it is not the Company's intention to have any borrowings of
more than 20% of gross assets at the time any such borrowing is
undertaken.
Changes to the Investment Policy for the B Shares
Any material change to the investment policy of the Company for the B
Shares will require the approval of Shareholders pursuant to the Listing
Rules.
Appendix
Definitions
The following defined terms apply throughout this announcement and are
extracted from the Circular, unless the context requires otherwise:
the Act Companies Act 2006 (as amended)
Admission admission of the B Shares to the
premium segment of the Official
List and to trading on the London
Stock Exchange's main market for
listed securities
AIM Alternative Investment Market
of London Stock Exchange plc
current Articles the current articles of association
of the Company adopted on 2 March
2000
B Shareholders holders of B Shares
B Shares B ordinary shares of 1 pence each
in the capital of the Company
B Share Pool assets and liabilities of the
Company attributable to the B
Shares
Chelverton Chelverton Asset Management Limited
Circular the circular letter dated 22 October
2018 to the Shareholders of the
Company
Company Oxford Technology 2 Venture Capital
Trust Plc (registered number 3928569)
Directors or Board the directors of the Company and,
collectively, the Board
DTR the Disclosure Guidance and Transparency
Rules published by the FCA pursuant
to Part VI of FSMA
FCA Financial Conduct Authority, acting
in its capacity as the competent
authority for the purposes of
Part VI of FSMA
Form of Proxy form of proxy for use in connection
with the General Meeting
FSMA the Financial Services and Markets
Act 2000 (as amended)
General Meeting the general meeting of the Company
to be held on 19 November 2018
Investment Manager Chelverton, conditionally on Admission
Investor an individual aged 18 or over
who is resident in the United
Kingdom and who subscribes for
B Shares under the terms of the
Offer
ISCA ISCA Administration Services Limited
ITA Income Tax Act 2007 (as amended)
Listing Rules Listing Rules published by the
FCA pursuant to Part VI of FSMA
Main Market the Main Market for listed securities
of London Stock Exchange plc
NAV or Net Asset the aggregate of the gross assets
Value of the Company less its gross
liabilities
Net Assets gross assets less all liabilities
(excluding contingent liabilities)
of the Company
New Articles the form of articles of association
of the Company to be adopted pursuant
to a special resolution to be
passed at the General Meeting
Notice the notice of the General Meeting
set out at the end of the Circular
Offer the proposed public offer for
subscription of B Shares in respect
of the 2018/19 and 2019/20 tax
years on the terms to be set out
in the Prospectus which it is
proposed will offer prospective
Investors the opportunity to subscribe
for up to 5,000,000 B Shares (with
an over-allotment facility for
up an additional 5,000,000 B Shares)
Official List Official List of the FCA
OTM or Investment Oxford Technology Management Limited,
Adviser the investment adviser to the
Company and the investment adviser
in relation to the Ordinary Share
Pool following Admission
OT2 Managers OT2 Managers Limited, the Company's
wholly-owned subsidiary, which
provides investment management
services to the Company
Ordinary Shareholders holders of Ordinary Shares
Ordinary Share Pool assets and liabilities of the
Company attributable to the Ordinary
Shares
Ordinary Shares existing ordinary shares of 10p
each in the capital of the Company
(ISIN: GB0003105052)
Proposals all of the proposals described
in the Circular, including the
proposed resolutions relating
to: (i) the adoption of the New
Articles, (ii) the authority to
allot B Shares, (iii) the authority
to issue such shares on a non-pre-emptive
basis, (iv) the cancellation of
the Company's share premium account
(both existing and that which
is to be created upon the issue
of B Shares) (v) adoption of the
Company's investment policy in
respect of B Shares, (vi) the
cancellation of the Company's
capital redemption reserve, and
(vii) authority to make market
purchases of B Shares.
Prospectus the prospectus proposed to be
issued by the Company in respect
of the Offer in accordance with
Section 84 of FSMA in late November
to early December 2018
Qualifying Investment investment in an unquoted trading
company, which comprises a qualifying
holding for a VCT as defined in
Chapter 4, Part 6, of the ITA
Resolutions the ordinary and special resolutions
set out in the Notice
Shareholders holders of Shares in the Company
Shares shares in the capital of the Company
VCT a company which is approved as
a venture capital trust by Her
Majesty's Revenue and Customs
pursuant to section 274 ITA
VCT Regulations Venture Capital Trust (Winding
Up and Merger) (Tax) Regulations
2004 SI 2004/2199 as amended from
time to time
VCT Rules Part 6 ITA and every other statute
(including any orders, regulations
or other subordinate legislation
made under them) for the time
being in force concerning VCTs,
as amended from time to time
(END) Dow Jones Newswires
October 22, 2018 02:00 ET (06:00 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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