Result of AGM and Change to Investing Policy


 

TIDMDHIR 
 
RNS Number : 3922B 
Dhir India Investments plc 
26 October 2009 
 

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Dhir India Investments Plc ("the Company") 
 
 
Result of Annual General Meeting 
 
 
And 
 
 
Change to Investing Policy 
 
 
 
 
Result of Annual General Meeting 
 
 
The Company is pleased to announce that at the Annual General Meeting of the 
Company held today, all resolutions as set out in the notice of the Annual 
General Meeting were passed. 
 
 
Change to Investing Policy 
 
 
At the Annual General Meeting the shareholders approved amendments to the 
Investing Policy of the Company. The revised Investing Policy is set out below: 
 
 
Investing objective 
 
 
The Company intends to invest in distressed companies and distressed assets in 
India with the objective of providing shareholders with income and capital 
growth. 
 
 
Investing Strategy 
 
 
The investments will be structured primarily in the following four types of 
transaction: 
 
 
Turnaround of companies 
 
 
In these transactions, the objective is to acquire an interest in a target 
company through its secured debt (and a minority equity interest where 
appropriate). The aim will be to benefit from the control taken of the target 
company, its operations and its assets and, if appropriate, to change or 
motivate existing management and implement a new strategy to turn around the 
business. 
 
 
Target companies will typically be under-performing due to financial, 
operational or management constraints and an overhang of debt, but with the 
potential for achieving a turnaround through restructuring. In such 
transactions, the Manager may arrange to provide the target company with a range 
of technical, legal, management and financial inputs, as required. 
 
 
The Directors believe that exits from such an investment will be achieved 
principally through selling the controlling interest in the target company to a 
third party or to the target's existing management or via public offering. The 
Company intends to work to a time frame of 24-36 months from acquisition to exit 
in such transactions. 
 
 
Re-sale of assets or companies 
 
 
The objective in these transactions is to obtain benefit from a change in 
control of the target company or its assets through the secured debt. The 
Company and its subsidiaries (the "Group") will consider acquiring a minority 
equity interest in target companies and/or assets but the Company would not 
acquire a majority of the equity interest. 
 
 
The value in such transactions lies in being able to acquire or settle the debts 
of the target company at a discount to the market value of the underlying assets 
of the business as a whole and then to restructure the debts so as to achieve 
the desired return upon a sale of the target company or its assets. 
 
 
An exit is achieved through the sale of its assets to a third party purchaser 
and/or the equity when sold. The Manager will seek to identify such transactions 
in sectors where there is demand for consolidation and capacity addition. 
 
 
The Company intends to work to a time frame of 9-12 months from acquisition to 
exit in such transactions. 
 
 
Break-up and sale of assets 
 
 
The objective of these transactions is to obtain benefit from a change in 
control of the target company or its assets by taking a secured debt position 
with a view to realising latent value through the sale of individual assets or 
parts of the business to different buyers. The Group will consider acquiring a 
minority equity interest in target companies and / or assets, but the Company 
would not acquire a majority of the equity interest. This process will entail 
the negotiation and restructuring of debts with creditors and lenders, the 
consolidation of security and the sale of assets to third party buyers. 
 
 
The Directors consider that this type of transaction is particularly attractive 
where there are high value assets in the target company, and the Company expects 
that the debt can be settled at a discount to market value. The Company intends 
to work to a time frame of 12-15 months from acquisition to exit in such 
transactions. 
 
 
Bridge financing 
 
 
In these transactions the objective is to provide short term bridge financing to 
target companies that are in need of immediate funds to complete one time 
settlements with secured creditors and which have cash flows to support the 
repayment of the financing (together with the Company's desired return) to the 
Group over a period of 6-9 months. 
 
 
Gearing 
 
 
The Directors anticipate that, due to a lack of sophisticated distress lenders 
in India and with the exception of bridge financing transactions, the Group's 
transactions will generally be funded by the Group from the proceeds of equity 
investments into the Group and not through debt. 
 
 
Investing restrictions 
 
 
The Company will only invest in Indian distressed companies and distressed 
assets. The Company will not have a predetermined preference of allocation in 
the type of transactions outlined above, but will aim to build a diversified 
portfolio by: 
 
 
  *  investing no more than GBP5 million in transactions relating to one single 
  entity; 
 
  *  investing no more than 50 per cent. of the net asset value of its portfolio in 
  one single transaction type; and 
 
  *  not investing in transactions where the intrinsic value of the underlying assets 
  is believed to be less than the amount of the investment required. 
 
 
 
The Board may however consider deviation from the above parameters while 
evaluating specific proposals. 
These investment restrictions will apply at the time of the initial investment 
in a particular opportunity and subsequent transactions which affect these 
ratios will not lead to a requirement to divest any investment to rebalance the 
portfolio. There are no obligations on the Company or the Manager to make any 
investments or to return monies to shareholders within a minimum period of time. 
 
 
26 October 2009 
 
 
Enquiries 
 
 
Sarah Marshall, Company Secretary                            01624 689 589 
Simcocks Trust Limited 
 
 
Jeremy Ellis / Chris Clarke                                              0207 
071 4300 
Evolution Securities Limited 
 
 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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