REG - Literacy Capital PLC - Literacy Capital announces sale

Literacy CapitalAnnouncement

29/08/2023 07:00

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RNS Number : 5031K  Literacy Capital PLC  29 August 2023

The information contained in this announcement is restricted and is not for
publication, release or distribution in the United States of America, any
member state of the European Economic Area, Canada, Australia, Japan or the
Republic of South Africa.

 

This announcement contains inside information.

 

29 August 2023

 

Literacy Capital plc ("Literacy" or the "Company")

 

Sale of major holding at significant premium, raising substantial cash for the
Company

 

Transaction highlights

 

·    Sale of another of Literacy's largest assets at >50% premium to
carrying value

·    Literacy sells its entire interest in the business, receiving more
than £20m in cash

·    £7.6m uplift to the asset's 31 March 2023 carrying value, increasing
NAV per share by 2.6% to 480.0p

·    The sale delivers a return in excess of 10x for shareholders, with no
carried interest payable by Literacy

·    Cash proceeds will be sufficient to repay Literacy's RCF in full and
allow for further new investments

 

Portfolio update

 

Literacy is pleased to announce that it has sold one of its larger investments
in full, generating a strong return for shareholders and a substantial amount
of cash, which will ultimately fund future investments.

 

The transaction at completion will deliver a return for shareholders in excess
of 10x the capital invested and valuing Literacy's stake at more than a 50%
premium to the 31 March 2023 carrying value.

 

Following the transaction involving Kernel Global in March 2023 (which
delivered a total return of 9.8x to shareholders and a 48.9% premium to
carrying value), this is another example of the progress made by a portfolio
company and value created since Literacy's investment, as well as prudence in
the fund's carrying valuations.

 

Had the sold asset been valued on 31 March 2023 in line with the valuation in
this announcement, the Company's estimated net asset value per share would
have been 12.7p per share, or 2.6%, higher at 480.0p (31 March 2023: 467.3p as
announced on 27 April 2023).

 

Literacy intends to use the cash proceeds to fully repay the amounts drawn
under its Revolving Credit Facility, before recycling these proceeds into new
investments. This represents another highly profitable and successful
investment for Literacy, demonstrating the growing maturity and interest from
large institutional investors in Literacy's portfolio companies.

 

Signing and exchange subject to regulatory clearance exchange has taken place,
with clearance and completion expected by the end of October. We will provide
further information in September, once details of the transaction can be
disclosed in full.

 

 

 

Enquiries

For further information, please contact:

 

   Literacy Capital plc / Literacy Capital Asset Management LLP:

   Richard Pindar / Tom Vernon                                      +44 (0) 20 3960 0280

   MHP Communications:

   Reg Hoare / Ollie Hoare / Matthew Taylor                         +44 (0) 20 3128 8276

                                                                    book@mhpgroup.com (mailto:book@mhpgroup.com)
   Singer Capital Markets Securities Limited:

   Robert Peel                                                      +44 (0) 20 7496 3000

About Literacy Capital:

 

Literacy Capital (BOOK.L) is an investment trust that was launched in 2017 by
Paul Pindar and Richard Pindar, before it listed on the London Stock
Exchange's main market in June 2021. The Company focuses on opportunities to
invest for the long-term in growing private UK businesses where a clear route
to creating additional value can be seen. It also has a unique charitable
objective to donate 0.9% of annual NAV to charities focused on improving
literacy in UK children. £7.1 million has been donated or reserved for
donation to charities since the trust's creation in 2017 up until 30 June
2023. For more information, please visit our website: www.literacycapital.com
(http://www.literacycapital.com) .

 

 

Website:

www.literacycapital.com

 

LEI: 2549006P3DFN5HLFGR54

 

A copy of this announcement will be available on the Company's website at
www.literacycapital.com (http://www.literacycapital.com) .

 

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