TIDMNCA
New Century AIM VCT plc
Legal Entity Identifier: 213800DEURQTGUXXPY18
On 12 August 2022, the Board of New Century AIM VCT plc (the
"Company") published a circular to Shareholders (the "Circular") in
relation to the recommended proposal for a managed wind-down of the
Company and the associated amendment of the Company's Investment
Policy (the "Proposal").
The Circular includes notice of a general meeting which will be
held at Brownheath Park, Gregory Lane, Durley SO32 2BS at 11.00
a.m. on 5 September 2022 (the "General Meeting"). A resolution will
be put to Shareholders to seek their approval of the New Investment
Policy at the General Meeting.
Copies of the Circular, together with a Form of Proxy for use in
connection with the General Meeting, were posted to Shareholders on
12 August 2022. Regardless of whether Shareholders intend to attend
the General Meeting, they are requested to complete and return the
Form of Proxy as soon as possible, in accordance with the
instructions printed on it.
A copy of the Circular will be submitted to the National Storage
Mechanism and will shortly be available for inspection at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism.
Defined terms used in this announcement have the meanings given
in the Circular unless the context otherwise requires.
Background to and reasons for the Proposal
At the 2021 AGM, an ordinary resolution to approve that the
Company continue being a venture capital trust was put to
Shareholders in accordance with article 163 of the Company's
Articles of Association.
Shareholders voted overwhelmingly against this resolution at the
2021 AGM and, in accordance with the Company's Articles of
Association, the Board convened the EGM at which the Winding-up
Resolution was put to Shareholders. The incumbent Board was divided
as to whether the passing of the Winding-up Resolution was in the
best interests of the Company and Shareholders as a whole, and was
therefore unable to make a unanimous recommendation in respect of
the Winding-up Resolution. The Winding-up Resolution narrowly
failed to be passed with approximately 72 per cent. of votes cast
being in favour of it, being just short of the 75 per cent.
threshold required for the resolution to be passed. Subsequent to
the EGM, all the directors who recommended voting against the
passing of the Winding-up Resolution have left the Board.
Your Board is of the opinion that, notwithstanding the fact that
the Winding-up Resolution failed to pass, the vast majority of the
Company's Shareholders wish for the Company to cease being a
venture capital trust and for the Board to return the Company's
capital to Shareholders. Accordingly, your Board has undertaken a
strategic review to determine the best means of returning capital
to Shareholders, which included consideration of proposing a second
resolution to wind-up the Company to Shareholders. Your Board has
also considered, alongside its principal advisers, the secondary
market for the sale of the majority of the Company's assets as well
as the relevant provisions of the VCT Rules. Following the
completion of that strategic review, your Board has concluded that
a well-managed sales process over the short to medium term will be
the most effective means of realising the Company's investments and
returning capital to Shareholders at a value which reflects the
Company's NAV.
With a view to maximising Shareholder value, the Board has
determined that the Company should be put into Managed Wind-Down,
with cash returned to Shareholders in a timely and efficient
manner, and in a way that protects the upfront VCT tax relief
received by Shareholders. The Board believes that proposing a
second resolution to wind-up the Company at this time would not be
as effective in maximising returns to Shareholders. In implementing
the Managed Wind-Down, the Company will benefit from having its
Portfolio realised by the Investment Manager who the Board believes
will be able to realise the Portfolio in such a way as to maximise
returns for Shareholders over the next 12 months. Your Board
believes this to be the case given that the Investment Manager has
acted in this capacity for many years and has an in-depth knowledge
of the investments that comprise the Company's Portfolio, and is
thus in a strong position to appraise the perceived valuation of
such investments. Your Board believes the Investment Manager is
also familiar with the marketability of those investments and is
well placed to judge the best exit route for them, whether it be
through brokers, market makers or in-house buyers.
If the Resolution is passed, your Board intends to serve notice
on the Investment Manager which will result in the Investment
Manager being removed from office upon the expiry of its 12 month
notice period. Once the Investment Manager is removed from office,
the Company will no longer have to pay the Investment Manager's
fee, which will result in reduced ongoing charges and will increase
the overall returns to Shareholders. However, your Board
anticipates that it will take more than 12 months to fully realise
the Company's Portfolio from the time the Managed Wind-Down is
approved and, as such, your Board will contemporaneously make an
application to the FCA to have the Company registered as a small
registered alternative investment manager ("AIFM"). This will allow
your Board to take over the Managed Wind-Down and the realisation
of the Company's remaining assets upon the expiry of the Investment
Manager's notice period. Your Directors are confident they will be
able to realise the majority of the Company's residual assets upon
their taking charge of the Managed Wind-Down and will do so whilst
continuing to not receive any directors' fees from the Company.
Once the Board is satisfied that the majority of the Portfolio
has been realised, and subject to Shareholder approval, the Company
will be put into members' voluntary liquidation and wound-up. In
order to implement the Managed Wind-Down, the Company is seeking
Shareholder approval, by means of an ordinary resolution, to
replace the Investment Policy with the New Investment Policy set
out in Part 2 of the Circular. If approved, the Board will
endeavour to realise all of the Company's investments in a manner
that achieves a balance between maximising the net value received
from those investments and making timely returns to
Shareholders.
Dividends
Should the Resolution be passed and the Managed Wind-Down
process initiated, the payment, quantum and timing of any dividends
paid during the Managed Wind-Down process will be at the sole
discretion of the Board, and will be dependent on the sale of the
assets, ongoing income streams generated by the assets held and the
Company's ongoing cash requirements. The amount of the net proceeds
that can be paid as dividends and the timing of any distributions
will also be determined by the distributable reserves of the
Company and the need to comply with the VCT Rules as they stand
currently, and in the future. There can be no guarantee as to the
payment, quantum or timing of dividends during the Managed
Wind-Down process.
Should the Resolution not be passed and the Managed Wind-Down
proposal therefore rejected, the Board will keep the payment of
annual dividends under review and, subject to ongoing income
streams generated by the assets held, the Company's distributable
reserves position and the Company's ongoing cash requirements, will
seek to pay these for as long as possible.
Indicative returns for Shareholders
The audit carried out by UHY Hacker Young LLP ("UHY") in respect
of the Company's 2022 Accounts resulted in UHY concluding that 2022
Accounts gave a true and fair view of the state of the Company's
affairs as at 28 February 2022. However, Shareholders should note
that the valuations upon which the 2022 Accounts are based are
themselves based on certain assumptions and whether the assets can
be sold in accordance with these valuations, or indeed at all,
depends on market conditions at the time of sale. Whilst the Board
believes the majority of assumptions relating to the audit hold
true as at the date of the Circular, there are some material
changes that will affect these valuations, including the
Government's reversal of the planned cuts in the rate of
corporation tax over the longer term, which will negatively impact
on future distributable profits and cash flows from the Company's
underlying investments, as well as current recessionary trends in
the global macro-economic outlook, increasing inflation and higher
interest rates. Whilst the Board believes market conditions over
the short to medium term will prove suitable as regards the sale of
the Company's assets, there is no guarantee such conditions will
not change over the short-to-medium, or longer, term and the market
value of, and returns from, the assets cannot be guaranteed. Many
shareholders will be aware of the recent weakness of the UK equity
market and, in particular, the AIM market. Consideration will be
given to the prevailing market conditions when implementing the
Managed Wind-Down and your Board will hold off selling assets if it
feels that market conditions are unfavourable.
In seeking to realise the Company's investments in an orderly
manner, the Directors will take into account the continued costs of
operating the Company and the impact of the reducing NAV on ad
valorem adviser fees. The capacity to trade in the Ordinary Shares
will be maintained for as long as the Directors believe it to be
practicable and cost-effective during the Managed Wind-Down period
and the Board will seek to minimise costs wherever it is reasonable
to do so.
Amendments to the Investment Policy
The Proposal involves amending the Company's Investment Policy
to reflect a realisation strategy and the Company ceasing to make
any new investments. The proposed amendments to the Company's
Investment Policy are considered a material change and therefore
the consent of Shareholders to the proposed amendments is being
sought.
The Directors believe that being prescriptive as regards the
timeframe for realising the Company's investments could prove
detrimental to the value achieved on realisation. Therefore, it is
the Board's view that the strategy for the realisation of the
Company's investments will need to be flexible and may need to be
altered to reflect changes in the circumstances of a particular
investment or in the prevailing market conditions.
Once all, or substantially all, of the Company's investments
have been realised and distributions in respect thereof made, the
Company will, at an appropriate time, seek Shareholders' approval
for the Company to be placed into members' voluntary
liquidation.
Part 2 of the Circular sets out the proposed New Investment
Policy in full.
Benefits of the Proposal
The Directors believe that the Proposal is in the best interests
of Shareholders as a whole and should yield the following principal
benefits:
-- implementing a managed and orderly disposal of investments should
maximise the value to be realised on the sale of the Company's assets and,
therefore, returns to Shareholders;
-- the Proposal will allow cash to be returned to Shareholders in a
cost-effective and timely manner; and
-- the Proposal will preserve the upfront tax relief for Shareholders.
Accordingly, the Directors are recommending that Shareholders
vote in favour of the Proposal.
Resolution
The Proposal is subject to the approval of Shareholders. Notice
of a General Meeting at which the Resolution to approve the
Proposal will be considered is set out on pages 12 to 15 of the
Circular.
The Resolution, which will be proposed as an ordinary
resolution, seeks authority to adopt the New Investment Policy. As
an ordinary resolution, for the Resolution to pass, more than 50
per cent. of the votes cast must be voted in favour.
General Meeting
The General Meeting has been convened for 11.00 a.m. on 5
September 2022 to be held at Brownheath Park, Gregory Lane, Durley
SO32 2BS. The Resolution will be voted on by way of a poll. In
accordance with the Articles, all Shareholders entitled to vote and
who are present in person or by proxy at the General Meeting shall
upon that poll have one vote in respect of every Ordinary Share
held.
Shareholders are strongly encouraged to appoint the Chairman of
the General Meeting as their proxy to vote on their behalf at the
General Meeting. This should ensure that your votes are
registered.
The Board encourages the submission of questions on the content
of the Circular to the Board via email to
CompanySecretarial@uk.tricorglobal.com by 5.00 p.m. on 1 September
2022.
Expected timetable
2022
Date Forms of Proxy must be returned by 11.00 a.m. on 1 September 2022
General Meeting 11.00 a.m. on 5 September 2022
Notes
1. The times and dates set out in the expected timetable above and mentioned
throughout the Circular may be adjusted by the Company, in which event
details of the new times and/or dates will be notified, as required, to the
FCA and the London Stock Exchange and, where appropriate, to Shareholders
and an announcement will be made through a Regulatory Information Service.
2. All references to times in the Circular are to London time, unless
otherwise stated.
For further information, please contact:
Tricor Secretaries Ltd, Company Secretary
Tel: 020 3216 2000
Email: CompanySecretarial@uk.tricorglobal.com
15 August 2022
View source version on businesswire.com:
https://www.businesswire.com/news/home/20220815005319/en/
CONTACT:
NEW CENTURY AIM VCT PLC
SOURCE: New Century AIM VCT Plc
Copyright Business Wire 2022
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August 15, 2022 06:44 ET (10:44 GMT)
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