TIDMKKVL
RNS Number : 1962F
KKV Secured Loan Fund Limited
13 November 2020
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 OF
SUCH JURISDICTION
FOR IMMEDIATE RELEASE
LEI: 2138007S3YRY3IUU4W39
13 November 2020
KKV SECURED LOAN FUND LIMITED
Publication of Circular and Notice of Extraordinary General
Meeting and Class Meetings
The Board of KKV Secured Loan Fund Limited (the "Company") is
pleased to announce the details of the recommended proposals for a
managed wind-down of the Company and associated adoption of the New
Investment Objectives and Investment Policies, and proposed
adoption of the New Articles (the "Proposals").
A circular in connection with the Proposals (the "Circular") is
expected to be posted to Shareholders later today containing,
amongst other things, a letter from the Chairman of the Company, an
expected timetable of principal events, notices of the EGM,
Ordinary Share Class Meeting and C Share Class Meeting (together,
the "Meetings") and details of the actions to be taken by
Shareholders, together with the Forms of Proxy for the
Meetings.
The Circular will shortly be available on the Company's website
at https://www.kkvim.com/kkv-secured-loan-fund/. The contents of
such website are not incorporated into, and do not form part of,
this announcement (the "Announcement"). A copy of the Circular will
also be submitted to the National Storage Mechanism and will be
available for inspection at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism.
Capitalised terms used in this Announcement, unless otherwise
defined, have the same meanings as set out in the Circular.
Background to the Proposals
On 24 September 2020, the Board announced the intention to put
forward proposals for a managed wind-down of the Company, in
relation to both the Ordinary Share Class and the C Share Class.
The Board noted that whilst Ordinary Shareholders as a whole
supported continuation of the Ordinary Share Class, a substantial
proportion of the Ordinary Shareholders voted against continuation.
In addition, since the 16 July Shareholder Meetings, the Portfolio
Manager has raised concerns over the valuation of certain assets
held within the Company's Portfolios, as announced on 6 August 2020
(and further announced on 30 September 2020 and 11 November). These
assets are subject to ongoing review by both the Portfolio Manager
and KPMG LLP. The Board believes that these two factors are likely
to continue to impact the rating of Ordinary Shares for an extended
period of time. As a consequence of this and feedback from several
major Shareholders, both the Board and the Portfolio Manager have
determined to place the Ordinary Share Class into managed wind-down
along with the C Share Class.
In order to do this, the Company is seeking Shareholder approval
to replace the Current Investment Objective and Investment Policy
with the New Investment Objectives and Investment Policies set out
in 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.
In addition, the Board is seeking Shareholder approval for the
Adoption of the New Articles to:
-- provide the Company with an alternative mechanism for making
distributions to Shareholders, namely the B Share Mechanism and the
D Share Mechanism, further details of which are set out in the
Circular;
-- remove the continuation vote;
-- give the Board greater flexibility to capitalise profits at
the Board's discretion in order to effect the B and/or D Share
Mechanism;
-- remove the right of conversion of C Shares into Ordinary Shares; and
-- give the Board more flexibility in relation to the
composition of the Board and how proceedings of the Board and its
committees are effected, by removing any requirement that there
shall not be a majority of the Directors resident in the United
Kingdom.
Summary of the Proposals
1. Amendments to the Current Investment Objective and Investment Policy
The Proposals involve amending the Current Investment Objective
and Investment Policy to reflect a realisation strategy and to
cease making any new investments except in very limited
circumstances as detailed in the Circular.
The Company's listing and the capacity to trade in its Ordinary
Shares and C Shares will be maintained for as long as the Directors
believe it to be practicable and cost-effective during the Managed
Wind-Down period, subject to being able to meet the requirements of
the Listing Rules. Accordingly, once a significant proportion of
the Company's assets have been realised and distributed to
Shareholders, the Board will then consider, in light of the then
prevailing market conditions and Shareholders' views, whether it
would be appropriate to propose a resolution for delisting the
Ordinary Shares and/or the C Shares (as applicable), which would
require additional Shareholder approval at that time.
The Board will continue to treat the Ordinary Share Class and
the C Share Class as separate pools of capital during the Managed
Wind-Down and there will not be a combination of the two Share
Classes.
Irrespective of whether or not the Board seeks to delist the
Ordinary Shares and/or the C Shares (as applicable), once all, or
substantially all, of the Company's investments have been realised,
the Company will, at an appropriate time, seek Shareholders'
approval for it to be placed into members' voluntary
liquidation.
2. Mechanics for returning cash to Shareholders
The Board has carefully considered the potential mechanics for
returning capital to Shareholders as part of the Managed Wind-Down
and the Company's ability to do so. The Board currently believes it
is in the best interests of Shareholders as a whole to return cash
to Shareholders at the appropriate times at the Board's discretion
using a B Share Mechanism and a D Share Mechanism, and it is
proposed certain changes to the Articles are made by the Adoption
of the New Articles in order to enable to Company to use such
mechanisms, as set out in further detail in the Circular.
3. Adoption of the New Articles
The proposed Managed Wind-Down requires certain changes to the
Articles which are proposed to be effected by the Adoption of the
New Articles, details of which are set out in detail in the
Circular.
Benefits of the Proposals
The Directors believe, having taken into account the views of a
range of major Shareholders, that the Proposals are in the best
interests of the Company and its Shareholders as a whole, and
should yield the following principal benefits:
-- implementing a managed wind-down and orderly disposal of
investments in relation to both the Ordinary Portfolio and C
Portfolio is expected to achieve a balance between maximising the
net value received from those investments and making timely returns
to Shareholders; and
-- the Proposals will allow cash to be returned to Shareholders
in a cost-effective and timely manner through the proposed B Share
Mechanism and D Share Mechanism (or by way of such other mechanisms
which the Directors consider, in their discretion, are in the best
interests of Shareholders from time to time).
Variation to the Investment Management Agreement
The Company, the Portfolio Manager and IFM, as parties to the
Investment Management Agreement, have agreed the following
variations to the Investment Management Agreement (the "IMA
Variation"):
-- a clawback of management fees paid up to the publication of
the audited accounts of the Company for the financial year ending
30 June 2020 (the "Initial Management Fees") (the "Annual Report
2020") if the NAV as at 30 June 2020 as reported in the Annual
Report 2020 (the "Actual NAV") is less than the NAV as at 30 June
2020 as published in the Company's announcement dated 24 July 2020.
The Initial Management Fees will be re-calculated using the Actual
NAV (the "Re-calculated Management Fees") and the difference
between such Recalculated Management Fees and the Initial
Management Fees shall be deducted from future payments of the
management fee by the Company until such time as the amount has
been deducted in full;
-- subject to the passing of resolution 1 at the Ordinary Share
Class Meeting, the parties to the IMA agree to use reasonable
endeavours to agree a management fee scale for the Ordinary Shares
in January 2021, or such later date as agreed in writing, but in
any event following the publication of the Annual Report 2020;
and
-- a waiver and release of the Portfolio Manager's obligation to
use 5 per cent. of management fees received by it in relation to
Ordinary Shares and C Shares to purchase Ordinary Shares and C
Shares in the market for the calendar months from and including
June 2020 to and including January 2021.
The IMA Variation has been agreed in light of the announcements
of 6 August and 30 September 2020 regarding the likelihood of
material impairments as well as delay in publication of NAVs prior
to the conclusion of the third-party valuation review, and the
Board considered it appropriate that any excess management fees
calculated at the conclusion of this process be clawed back. The
Board will also be seeking to negotiate a revised management fee
scale for the Ordinary Shares in January 2021 in order to re-align
the Portfolio Manager's interests with the New Investment
Objectives and Investment Policies.
Notices of the EGM, Ordinary Share Class Meeting and C Share
Class Meeting
The EGM, Ordinary Share Class Meeting and C Share Class Meeting
to be held at BNP Paribas House, St Julian's Avenue, St Peter Port,
Guernsey GY1 1WA on 4 December 2020, will commence respectively at
10.00 a.m. GMT, 10.05 a.m. GMT and 10.10 a.m. GMT (or as soon
thereafter as the preceding Meeting concludes or is adjourned).
In light of the Covid-19 pandemic, and travel restrictions
currently in place in Guernsey, Shareholders are strongly
encouraged to exercise their voting rights by completing and
submitting the Forms of Proxy provided alongside the Circular to
avoid the need to attend the EGM or Class Meetings in person. It is
highly recommended that Shareholders submit their Form of Proxy as
early as possible to ensure that their votes are counted at the EGM
and the Class Meetings.
Shareholders should carefully read the Circular in its entirety
before making a decision with respect to the Proposals.
Timetable
The current expected timetable of principal events for the
implementation of the Proposals is set out below and in the
Circular. If any of the key dates set out in the expected timetable
change, an announcement will be made through a Regulatory
Information Service. All times shown in this Announcement are
London times, unless otherwise stated.
Event Time and/or date
Publication of the Circular 13 November 2020
Latest time and date for receipt of 2 December 2020 at 10.00
Forms of Proxy for EGM a.m. GMT
Latest time and date for receipt of 2 December 2020 at 10.05
Forms of Proxy for Ordinary Share a.m. GMT
Class Meeting
Latest time and date for receipt of 2 December 2020 at 10.10
Forms of Proxy for C Share Class Meeting a.m. GMT
EGM 4 December 2020 at 10.00
a.m. GMT
Ordinary Share Class Meeting 4 December 2020 at 10.05
a.m.(1) GMT
C Share Class Meeting 4 December 2020 at 10.10
a.m.(1) GMT
(1) Or as soon thereafter as the preceding meeting concludes or is adjourned.
Enquiries:
KKV Secured Loan Fund Limited
Peter Niven via the Company Secretary
Brett Miller
BNP Paribas Securities Services S.C.A., Guernsey
Branch
Company Secretary 01481 750 853
Winterflood Securities Limited
Neil Langford 020 3100 0000
Cautionary statements
This Announcement may contain and the Company may make verbal
statements containing "forward-looking statements" with respect to
certain of the Company's plans and its current goals and
expectations relating to its future financial condition,
performance, strategic initiatives, objectives and results.
Forward-looking statements sometimes use words such as "aim",
"anticipate", "target", "expect", "estimate", "intend", "plan",
"goal", "believe", "seek", "may", "could", "outlook" or other words
of similar meaning. By their nature, all forward-looking statements
involve risk and uncertainty because they relate to future events
and circumstances which are beyond the control of the Company.
As a result, the actual future financial condition, performance
and results of the Company may differ materially from the plans,
goals and expectations set forth in any forward-looking statements.
Any forward-looking statements made in this announcement by or on
behalf of the Company speak only as of the date they are made. The
information contained in this Announcement is subject to change
without notice and except as required by applicable law or
regulation, the Company expressly disclaims any obligation or
undertaking to publish any updates or revisions to any
forward-looking statements contained in this Announcement to
reflect any changes in the Company's expectations with regard
thereto or any changes in events, conditions or circumstances on
which any such statements are based.
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END
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