REG - Chelverton Grwth Tst - Publication of Circular and Notice of GM

Chelverton Growth TrustAnnouncement

01/11/2023 07:15

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RNS Number : 9466R  Chelverton Growth Trust PLC  01 November 2023

RNS

1 November 2023

 

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 OR REGULATIONS OF THAT JURISDICTION

Chelverton Growth Trust Plc

(the Company)

Recommended proposals for members' voluntary liquidation of the Company

and

Notice of General Meeting

 

Highlights

·    Recommended proposals for members' voluntary liquidation of the
Company

·    General Meeting to be held on Monday 27 November 2023

·    Solvent distribution of certain assets in specie to Shareholders and
realisation for cash of the Company's other assets, with a return of that cash
(net of costs and other liabilities) to Shareholders

This summary should be read in conjunction with the full text of this
announcement.

Capitalised terms used but not defined in this announcement will have the same
meaning given to them in the Circular.

Introduction

In recent years, the Company's strategy has been to return cash to
Shareholders via a series of tender offers.   In total, 71% of the equity
(£5.4 million by value) has been returned. The Board has concluded that the
reduced size of the Company and its small number of investments preclude a
further tender offer, and as reported in the Company's annual report and
accounts, it has for some time been investigating other options to maximise
the return of funds to Shareholders. Unfortunately, this process has been
necessarily drawn out due to major economic events including Brexit, Covid 19
and the Russian invasion of Ukraine. These events have served to create market
uncertainty and turmoil such that only in recent months has the Board felt
able to move forward with its plans within a more stable economic environment.

After careful consideration, and following discussions with the Investment
Manager, the Board believes that it is in Shareholders' best interests that
the Company be wound up, with the intention that there will be an orderly,
solvent distribution of certain assets in specie to Shareholders and
realisation for cash of the Company's other assets, with a return of that cash
(net of costs and other liabilities) to Shareholders. The Board has,
therefore, resolved to recommend to Shareholders that a members' voluntary
liquidation of the Company be undertaken and to cancel the admission of its
Shares to the premium listing category of the Official List and on the Main
Market. The Board's primary aim in making this recommendation is to seek to
maximise the return to Shareholders using the most efficient route possible.

The purpose of the Circular is to provide Shareholders with further details of
the Proposals and to convene a General Meeting at which Shareholders will be
asked to approve the Proposals. No further distributions will be paid by the
Company pending the voluntary liquidation of the Company.

The General Meeting will be held at the offices of Charles Russell Speechlys
LLP, 5 Fleet Place, London, EC4M 7RD at 3.00 p.m. on Monday 27 November 2023.

The business to be conducted at the General Meeting is set out in the Notice
of General Meeting. Shareholders will be asked to consider and vote on the
Resolution set out in the Notice. An explanation of the Resolution is given
below.

Background to the Proposals

The Company was launched in November 1994 with the intention to provide
capital growth.

The remaining assets of the Company of approximately £2.9 million net of
creditors and other liabilities as at 23 October 2023 are equivalent to
approximately 53 pence per Share. The Board and the Investment Manager are of
the opinion that the Company is sub-scale and that the Company's ongoing
charges ratio renders the ongoing operation of the Company uneconomic.

The Board considers that the reduced size of the Company and its small number
of investments preclude a further tender offer, and it has been considering
other options to return funds to Shareholders.

The Board has accordingly concluded that a members' voluntary liquidation of
the Company should be undertaken, with the Company's shareholding in CEPS plc
(comprising in terms of value, approximately 75% of the Company's remaining
assets) being distributed in specie pro rata to Shareholders, with the
Company's other investments being sold, and the proceeds used to satisfy
creditors and the costs of the members' voluntary liquidation, with the
remaining small cash balance being distributed to Shareholders.

CEPS plc is an AIM-listed, industrial trading holding company that combines
the benefits of the financial structuring of private equity funding with the
entrepreneurial drive and flair of incentivised management teams. Further
information about CEPS can be found on its website www.cepsplc.com
(http://www.cepsplc.com) .

The Company's existing Investment Management Agreement, and the associated
obligations of the parties, will terminate automatically in accordance with
the terms of the relevant agreements on the Company's entry into liquidation
with no further amounts payable in respect of such arrangements.

Further details of the Resolution required to be passed to allow the
implementation of the Proposals are set out below.

The members' voluntary liquidation

The Board is recommending that the Company be placed into members' voluntary
liquidation. This requires the approval of Shareholders at the General
Meeting.

It is proposed that Milan Vuceljic and Michael Solomons, both licensed
insolvency practitioners of Moorfields Advisory Limited, 82 St John Street,
London ECM 4JN be appointed as joint liquidators of the Company (the
"Liquidators"), and that their remuneration shall be determined in accordance
with the letter of engagement between the Liquidators and the Company and as
set out in in the Resolution. Further details regarding the Liquidators'
proposed engagement and remuneration as agreed by the Directors can be made
available on request to the Company Secretary, ISCA Administration Services
Limited (01392 487056).

The winding-up of the Company will be a solvent winding-up in which it is
intended that all creditors will be paid in full. The winding up will require
a declaration of solvency to be sworn by the Directors. The appointment of the
Liquidators becomes effective immediately upon the passing of the Resolution
at the General Meeting, at which point the powers of the Directors will cease.

The Liquidators will then assume responsibility for the winding-up of the
Company, including the realisation of the remaining assets of the Company, the
payment of fees, costs and expenses, the discharging of the liabilities of the
Company, and the distribution of the Company's surplus assets to Shareholders.

The Liquidators intend to return the majority of the remaining net asset value
to Shareholders by the in specie distribution pro rata to Shareholders of the
Company's shareholding in CEPS plc, the AIM listed industrial holding company
in which the Company owns 5,460,301 shares. The Board believes that the
Company's other assets and investments should be best realised, when
appropriate to do so, given their size and illiquidity, and this is a policy
which the Company have been pursuing. The net proceeds of the realisation of
the Company's assets will be distributed to Shareholders after the Company's
outstanding liabilities and the costs of implementing the Proposals, including
the Liquidators' fees, have been met. The shares of the Company have
historically traded at steep discount to the asset value of the Company and
this strategy should enable higher value to be reflected for Shareholders, by
removal of the future costs of the running the Company and the distribution of
net cash and the direct ownership of shares in CEPS plc.

In order to facilitate the implementation of the Proposals, the Shares will be
suspended from listing on the Official List and from trading on the London
Stock Exchange with effect from 7.30 a.m. on Monday 27 November 2023, being
the date of the General Meeting.

If the Resolution is subsequently passed at the General Meeting, this will
also result in the cancellation of the listing of the Shares on the Official
List and the Shares ceasing to trade on the London Stock Exchange. It is
expected that the cancellation of listing and trading would take effect from
8.00 a.m. on Tuesday 28 November 2023.

Distributions to Shareholders

Assuming the Resolution is passed, the Liquidators expect to make an initial
in specie distribution pro rata to Shareholders of the Company's shares in
CEPS plc, the AIM listed industrial holding company in which the Company owns
5,460,301 shares. Because David Horner and his family are currently
beneficially interested in 6,299,000 ordinary shares in CEPS plc (representing
29.99% of the issued share capital of that company), any increase in that
family shareholding may have consequences under The Takeover Code, which is
currently being addressed by CEPS plc and the Horner family. This will not
delay any distribution by the Liquidators.

The Liquidators will retain sufficient funds in the liquidation to meet the
current, future and contingent liabilities of the Company, including the costs
and expenses (inclusive of VAT, if applicable) of the liquidation not already
paid at the point of liquidation.

Once the liquidators have satisfied the claims of creditors of the Company and
paid the costs and expenses of the liquidation, it is expected that the
Liquidators will make one final cash distribution to Shareholders, currently
expected to be approximately 5 pence per Share.

All Shareholders on the Register as at 6.00 p.m. on Friday 24 November 2023
will be entitled to any distributions made during the course of the
liquidation.

In order to comply with the Company's obligations under the UK's domestic and
international sanctions regimes, no distribution made pursuant to the
implementation of the Proposals will be paid to a Sanctions Restricted Person.

Once in liquidation, the Company will not make any further investments.

Suspension and cancellation of admission of the Shares to trading on the Main
Market

The register will be closed at 6.00 p.m. on Friday 24 November 2023 and the
Shares will be disabled in CREST at the start of business on Monday 27
November 2023. Accordingly, to be valid, all transfers must be lodged before
6.00 p.m. on Friday 24 November 2023. Application will be made to the FCA for
suspension of listing of the Shares on the Official List and application will
be made to the London Stock Exchange for suspension of trading in the Shares,
in each case at 7.30 a.m. on Monday 27 November 2023. The last day for
dealings in the Shares on the London Stock Exchange on a normal rolling
two-day settlement basis will be Wednesday 22 November 2023. After Wednesday
22 November 2023, dealings should be for cash settlement only and will be
registered in the normal way if the transfer, accompanied by the documents of
title, is received by the Registrars by close of business on Friday 24
November 2023. The record date, being the date for determining which
Shareholders are entitled to receive liquidation distributions, is close of
business on 24 November 2023.

Transfers received after the time specified above will be returned to the
person lodging them and, if the Resolution relating to the Proposals is
passed, the original holder will receive any proceeds from distributions made
by the Liquidators.

If the Resolution relating to the Proposals is passed, the Company will make
applications for the cancellation of the admission of the Shares to listing on
the Official List and to trading on the Main Market following the General
Meeting with the cancellations expected to take effect at 8 a.m. on Tuesday 28
November 2023.

After the liquidation of the Company and the making of the final distribution
to Shareholders (if any), existing certifications in respect of the Shares
will cease to be of value and any existing credit of the Shares in any stock
account in CREST will be redundant.

Summary of the Resolution to be proposed at the General Meeting

The implementation of the Proposals will require Shareholders to vote in
favour of the Resolution to be proposed at the General Meeting.

Resolution

The Resolution is for the approval of the Company being wound-up voluntarily
and the appointment of the Liquidators for the purpose of the winding-up. It
also grants the Liquidators authority to make distributions in specie and in
cash to the Shareholders (after payment of the Company's liabilities and after
deducting the costs of implementation of the Company's winding-up), in
proportion to their holdings of Shares in accordance with the provisions of
the Articles. It also determines the remuneration of the Liquidators by
reference to the engagement letter signed by the Company with Moorfields
Advisory Limited and in the Resolution.

The Resolution will be proposed as a special resolution. A special resolution
requires a majority of at least 75 per cent. of votes cast by Shareholders to
be cast in favour, in order for it to be passed.

If the Resolution is not passed at the General Meeting, the Company shall
continue in operation until other proposals can be put forward. As noted
above, the Board and the Investment Manager are of the opinion that the
Company is sub-scale and that the Company's ongoing charges ratio renders the
ongoing operation of the Company uneconomic.

Expected Timetable of Principal Events

 
                        2023

 

 Last day of dealing in the Shares for settlement through CREST on a normal      22 November
 rolling two-day settlement basis in order to enable settlement prior to the
 record date

 Deadline for receipt of Forms of Proxy                                          3.00p.m. on 23 November

 Close of Register and Record Date for participation in the members' voluntary   6.00p.m. on 24 November
 liquidation

 Suspension of Shares from listing on the Official List and from trading on the  7.30 a.m. on 27 November
 London Stock Exchange and CREST disablement

 General Meeting                                                                 3.00p.m. on 27 November

 Appointment of Liquidators                                                      27 November

 Cancellation of the listing of the Shares on the Official List and of the       8.00a.m. on 28 November
 trading of the Shares on the

 London Stock Exchange

 

 

Enquiries

David
Horner
       01225 483030

Chelverton Asset Management Limited

dah@chelvertonam.com
 

 

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