LMS Capital PLC Review of Liquid Resources & Proposed Tender Offer (2075H)
June 06 2017 - 1:01AM
UK Regulatory
TIDMLMS
RNS Number : 2075H
LMS Capital PLC
06 June 2017
6 June 2017
LMS Capital plc
Board Review of Liquid Resources and Proposed Tender Offer
In its circular published on 27 July 2016 (the "2016 Circular"),
LMS Capital plc (the "Company" or "LMS") proposed two further
returns of capital to Shareholders by way of tender offers and
associated share repurchases together representing a maximum of 50%
of the net proceeds of further disposals of assets in the Company's
existing portfolio. The details of these further capital returns
are as follows:
- the first tender offer and associated share repurchases would
return up to GBP6 million to Shareholders (once net realisation
proceeds, after 27 July 2016, exceeded GBP12 million), (the "First
Tender");
- the second tender offer and associated share repurchases would
return up to GBP5 million to Shareholders (once net realisation
proceeds, after 27 July 2016, exceeded GBP22 million in total),
(the "Second Tender");
- both tender offers and associated share repurchases would be
priced at a 5% discount to the net asset value of the Company at
the relevant time; and
- the concert party (comprising members of the extended Rayne
family and associated trusts together currently holding 36.12% of
the issued share capital of the Company) has undertaken not to
participate in these tender offers.
As envisaged in the 2016 Circular, the disposal proceeds of the
Company's portfolio (as realised and net of the First Tender and
Second Tender and amounts required for working capital purposes)
will be invested in accordance with the Company's investment
policy.
The Company announced on 22 May 2017 that net realisation
proceeds since the change in investment policy totalled GBP12.4
million, exceeding the threshold of net realisations for a First
Tender. As at 31 May 2017, net realisation proceeds amounted to
GBP12.8 million.
The Board also announced that it would commence a full review of
the Company's liquid resources, future cash requirements,
commitments and costs with a view to determining the appropriate
amount and timing of a further tender offer.
The Board has now completed this review, advised where required
by the Company's investment manager, Gresham House Asset Management
("GHAM"), and announces the following conclusions:
- As at 31 May 2017 the Company's liquid resources amounted to
GBP9.2 million comprised of cash and cash equivalents.
- The Company has uncalled commitments to third party funds of
up to approximately GBP3.5 million - the timing and amount of these
potential future calls is unknown.
- Taking the Company's liquidity levels and liquidity
requirements into account, including its ability to realise some of
its existing quoted holdings, the Board has concluded that it is
able to fulfil its First Tender commitment with a capital return of
GBP6 million. As set out in the 2016 Circular, this will be priced
at a 5% discount to the net asset value of the Company at the
relevant time. A circular convening a general meeting to consider
the resolutions required to effect the First Tender is expected to
be sent to Shareholders in July.
- As set out in the 2016 Circular, the Board intends to return
up to a further GBP5 million to satisfy the Second Tender
commitment. At this stage it is not possible to confirm the timing
or final amount of the Second Tender. It is possible that liquidity
and working capital constraints could lead to a delay in effecting
the Second Tender. The Board will update Shareholders as progress
is made with realisations from the Company's portfolio and the
implementation of the new investment policy.
Following the changes to the Company's investment policy
approved by Shareholders in August 2016, LMS focuses predominantly
on private equity investment, targeting a return on equity after
running costs of between 12% - 15% per annum over the longer term,
principally through capital gains and supplemented with the
generation of longer term income yield. It is the intention of the
Board and GHAM to deliver this revised investment mandate for
Shareholders.
The information contained within this announcement is deemed to
constitute inside information as stipulated under the Market Abuse
Regulation (EU) No. 596/2014. Upon the publication of this
announcement, this inside information is now considered to be in
the public domain.
For further information please contact:
LMS Capital plc
Martin Knight, Chairman 020 7935 3555
Gresham House Asset Management
Limited
Graham Bird 020 3837 6270
J.P. Morgan Cazenove
(Corporate Broker) 020 7742 4000
Michael Wentworth-Stanley
This information is provided by RNS
The company news service from the London Stock Exchange
END
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