REG - Crystal Amber Fund - Shareholder returns update & dividend declaration

Crystal Amber FundAnnouncement

11/11/2022 07:16

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RNS Number : 0532G  Crystal Amber Fund Limited  11 November 2022

The information contained within this announcement is deemed by the Company to
constitute inside information pursuant to Article 7 of EU Regulation 596/2014
as it forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 as amended.

11 November 2022

CRYSTAL AMBER FUND LIMITED

("Crystal Amber", the "Company", or the "Fund")

 

Update on shareholder returns and declaration of interim dividend

 

The Fund is pleased to provide an update on shareholder returns.

 

Hurricane Energy plc ("Hurricane")

 

On 2 November 2022, Hurricane, in which the Fund holds a 28.9 per cent
interest, announced that it had received an unsolicited offer for the company
and that following a period of engagement with the bidder Hurricane had
received an offer for the entire issued share capital of the Company at  an
indicative offer of 7.7p per Hurricane share in cash (the "Indicative
Offer")("the Hurricane Announcement"). In the Hurricane Announcement the
Hurricane Board stated that it had concluded that the Indicative Offer should
not be recommended to Hurricane shareholders.  The Hurricane Board also
stated that it had decided to launch a formal sale process for Hurricane to
establish whether there is a bidder prepared to offer a value the Hurricane
Board considers attractive, relative to the standalone prospects of Hurricane
as a publicly listed company and one that should be recommended to all
Hurricane Shareholders.

 

In the Hurricane Announcement, Hurricane stated that whilst the outcome of the
formal sale process is uncertain, it is in a very strong financial and
operational position but noted that Crystal Amber, which holds 28.9 per cent
of Hurricane's shares and is Hurricane's largest shareholder, has indicated to
the Hurricane Board its desire to monetise the value of its shareholding.

 

Crystal Amber, by virtue of its 28.9 per cent holding, is presumed by The
Takeover Panel to be acting in concert with Hurricane.

 

Should the formal sale process result in an offer for Hurricane and the
realisation of the Fund's holding at the indicative offer price of 7.7p a
share, it would amount to £44.3 million or 53.2p per Crystal Amber share.

 

In the Hurricane Announcement, the Hurricane Board stated that in the event
that the formal sale process does not result in a transaction, it intends to
commence a significant capital return programme with up to $70 million
(equivalent to 3.1p per Hurricane share at current exchange rates) to be
returned to shareholders in Q1 2023, upon completion of a capital reduction by
Hurricane which would require the approval of Hurricane shareholders and
confirmation by the High Court of Justice in England and Wales. In the event
that $70 million is returned to Hurricane shareholders and there is no change
in the US$:£STG exchange rate, Crystal Amber would receive approximately
£17.8 million, equivalent to 21.4p per Crystal Amber share. Furthermore,
Hurricane has announced that in the absence of alternatives that would
generate better returns for Hurricane shareholders, further distributions
totalling up to $110 million could be made during 2023 and 2024 in aggregate,
with a final distribution of up to $30 million in 2025, following the
cessation of production from the Lancaster operations. Hurricane further
advised that the amount of cash available to distribute to Hurricane
shareholders following cessation of operations and decommissioning is
dependent on many factors, including oil price, ultimate oil recovery from
Lancaster, whether the decision to cease operations is planned or forced and
the cost and timing of decommissioning.

 

In the Hurricane Announcement, the Hurricane Board reserved the right to alter
any aspect of the process as outlined above or to terminate the process at any
time and in such cases will make an announcement as appropriate.  The
Hurricane Board also reserved the right to reject any approach or terminate
discussions with any interested party at any time.

 

The quantum and timing of receipts from the Fund's shareholding in Hurricane
will depend upon the outcome of the formal sale process. It is the Fund's
current intention for substantially all proceeds received following the
conclusion of the formal sale process and/or capital distributions, to be
returned to shareholders.

 

Board Intelligence Limited ("BI")

 

The Fund is pleased to announce that it has agreed to dispose of its
shareholding in BI, a private unquoted company. The Fund acquired its
shareholding in the spring of 2018. In 2020, the Fund made a partial disposal
of its shareholding. At 30 June 2022, the carrying value of the Fund's
remaining shareholding was £1.25 million. The sale proceeds will amount to
£2.0 million, 60.0 per cent above carrying value. The total profit from the
Fund's investment in BI is £1.48 million, which represents a return of 39.9
per cent.

 

Declaration of interim dividend

 

The Board of Crystal Amber has resolved that, rather than await the outcome of
the Hurricane formal sale process, it should now resume its returns to
shareholders. Therefore, the Directors of the Fund are pleased to declare an
interim dividend of 10p per share in respect of the financial year ended 30
June 2023. This dividend will be payable to shareholders on the register as at
25 November 2022, with an ex-dividend date of 24 November 2022 and a payment
date of 23 December 2022.

 

The interim dividend of 10p per share represents a gross return of £8.3
million and will bring total distributions to shareholders in 2022 to 30p per
share, representing a gross return of £25 million.

 

 

For further enquiries please contact:

 

Crystal Amber Fund Limited

Chris Waldron (Chairman)

Tel: 01481 742 742

www.crystalamber.com (http://www.crystalamber.com)

 

Allenby Capital Limited - Nominated Adviser

David Worlidge/Freddie Wooding

Tel: 020 3328 5656

 

Winterflood Investment Trusts - Broker

Joe Winkley/Neil Langford

Tel: 020 3100 0160

 

Crystal Amber Advisers (UK) LLP - Investment Adviser

Richard Bernstein

Tel: 020 7478 9080

 

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