Quarterly Review and Sale (2286F)
April 20 2011 - 1:00AM
UK Regulatory
TIDMVOC
RNS Number : 2286F
Vision Opportunity China Fund Ltd
20 April 2011
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART
INTO THE UNITED STATES, CANADA, AUSTRALIA, SOUTH AFRICA OR
JAPAN
20 April 2011
Vision Opportunity China Fund Limited
(the "Company" or "VOC")
Quarterly Review and Sale of Substantially all of Holding in
China Integrated Energy
Vision Opportunity China Fund Limited (AIM: VOC.L) announces
that the Quarterly Review for the period ended 31 March 2011 will
be available on its website later today and incorporates the
Investment Manager's commentary on recent developments in the
Company's portfolio, including details concerning the sale of
substantially all of its position in China Integrated Energy Inc
(Nasdaq:CBEH). The Investment Manager's commentary, which was
prepared as at 19 April 2011, is replicated below:
Investment Manager Commentary
This past quarter was particularly challenging for investors in
US listed Chinese companies, such as VOC. While most of our
portfolio companies reported strong results, several
highly-critical research reports on US-listed Chinese companies
weighed heavily on the sector. Our portfolio was deeply affected by
this crisis and as such suffered its worst performance since the
autumn of 2008, with the share prices of our investee companies
falling 32.2% over the quarter on a weighted average basis and
trading in the range of about 4.9 times 2011 projected net income
as at 31 March 2011.
The NAV per VOC share fell by some 37% over the 3 months ended
31 March. A major contributor to this decline was China Integrated
Energy (CBEH), an integrated biodiesel manufacturing and
distribution company which was our third largest portfolio holding
at the beginning of the quarter (representing 17% of the NAV). Two
separate research reports issued by private individuals raised
serious allegations of misconduct and fraud against CBEH. CBEH has
strongly denied the allegations and its Board has commissioned an
independent review of its activities by Deloitte and Pillsbury
Winthrop Shaw Pittman (a major international full-service law
firm). In view of the nature and extent of the allegations, it is
unsurprising that they have had a devastating effect on the price
of CBEH, which ended the quarter down 61.9%.
Even if the most significant of the allegations against CBEH
prove to be ill-founded, we would expect that CBEH's share price
will not recover for some time. Accordingly, as liquidity in CBEH
shares has risen substantially in recent weeks, we were able to
significantly reduce our position through a series of on-market
transactions during March and April 2011. The total investment in
CBEH by VOC was $14.6 million. Through 15 April 2011, we have
realised total proceeds of $11.7 million. We continue to hold
approximately 533,000 CBEH shares in the portfolio valued at
approximately $1.06 million as at 15 April 2011.
As noted in VOC's announcement on 14 April 2011, since the
quarter end we have also sold our entire investment in China
Security & Surveillance Technologies (CSR). We invested a total
of $8 million at $4.00 per share in CSR last May and our total sale
proceeds were $10.2 million, representing an IRR of 39.8%.
It is expected that the net proceeds from both the CBEH and CSR
sales will be held in cash or near-cash investments in the
short-term.
For further information, please contact:
Vision Opportunity China Fund Limited Tel: +1 (212) 849 8225
David Benway / Adam Benowitz
Canaccord Genuity Limited Tel: +44 (0)20 7050 6500
Guy Blakeney / Sue Inglis
Financial Dynamics Tel: +44 (0)20 7269 7132
Ed Gascoigne-Pees / Ed Berry
NOTE TO EDITORS
Vision Opportunity China Fund Limited is a closed-ended fund
traded on AIM. VOC primarily invests directly in listed companies
with operations principally within Greater China.
Greater China is a collective term for the territories
administered by the People's Republic of China, those administered
by the Republic of China and Singapore.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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