TIDMIRIS
RNS Number : 7701Q
DCG IRIS Limited
03 September 2014
DCG IRIS Limited
3 September 2014
Recommended Proposals for a voluntary winding up of the
Company
On 18 June 2014 the Directors of DCG IRIS Limited (the
"Company") announced a proposal for the voluntary winding up of the
Company (the "Winding Up"). The Company is today posting a Circular
to Shareholders in connection with the Winding Up, a summary of
which is set out below.
Background to and reasons for the Proposals
The Company was admitted to the Official List on 27 June 2012
with the Admission of Sterling Shares representing initial net
assets of GBP39.5 million.
Having regard to the benefits of enlarging the Company the
Directors announced on 1 October 2012 that the Company planned to
proceed with a series of share offerings. Accordingly, the Company
commenced a Placing Programme, with the first placing of GBP11.025
million of Sterling C Shares gaining Admission on 20 December
2012.
On 22 May 2013, 15 July 2013 and 7 November 2013, the Company
issued GBP9.277 million, GBP1.175 million and GBP7.699 million of
Sterling Shares, respectively, also pursuant to the Placing
Programme.
Since the Company's launch in June 2012, it has delivered well
on its objective of providing exposure to insurance-linked
strategies. The annualised NAV total return as of 31 July 2014 (the
latest date for which the NAV per share has been finalised) was
4.45 per cent. since inception, compared to the 3 month sterling
LIBOR return over the same period of 0.54 per cent.. Annualised
volatility has been low at 0.46 per cent. over the same period, and
returns have exhibited low correlation to equity and fixed income
markets.
The Company's returns have been minimally affected by insurance
events, despite Hurricane Sandy in October 2012, which was the
second most expensive event in US history and resulted in insured
losses of US$36.89 billion (source: Swiss Re Sigma). Hurricane
Sandy resulted in a reduction to NAV of just 0.24 per cent..
Despite these successes, the Company remains of relatively small
asset size and has not attracted the investor demand that was
anticipated at launch.
In a circular to Shareholders dated 9 August 2013, the Directors
undertook to consider proposing a redemption offer for the entire
issued share capital of the Company if the net asset value of the
Company at 30 June 2014 was less than GBP150 million. The NAV at 30
June 2014 was GBP68.15 million.
As announced on 18 June 2014, in light of decreasing premium
levels in the reinsurance market and the Company's total asset
size, the Directors have resolved to put a proposal to Shareholders
for its voluntary winding up rather than propose a redemption
offer.
The Directors consider that the Winding Up is in the best
interests of Shareholders as a whole because it has come to the
Directors' knowledge that a significant proportion of Shareholders
are seeking an exit from their investment in the Company and,
accordingly, acceptances in respect of a redemption offer would be
likely to leave the Company materially smaller in total asset size,
with correspondingly reduced prospects for future growth. The
Directors do not consider it in the Company's or remaining
Shareholders' interests for the Company to continue in such
circumstances.
Realisation of the Portfolio
The Company has submitted a full redemption request to the CS
IRIS Low Volatility Plus Fund Limited (the "CS Master Fund") for
redemption on the next available dealing date in the CS Master
Fund, which is 1 October 2014.
The Company expects to receive redemption proceeds from the CS
Master Fund by 30 November 2014, except to the extent that the CS
Master Fund is entitled to defer or postpone redemptions as set out
in the Circular.
A redemption fee of one per cent. of the redemption proceeds
(the "Redemption Fee") shall be payable in respect of CS Master
Fund Shares redeemed during the Soft Lock-Up Period. The Company
holds 7,295.3527 CS Master Fund Shares with a value of GBP7.73
million (as at 31 July 2014) which will be within their Soft
Lock-Up Period on 1 October 2014. The remainder of the Company's CS
Master Fund Shares, with a value of GBP59.88 million, are not
within a Soft Lock-Up Period and are not subject to the Redemption
Fee.
Costs of the Winding Up
The expenses incurred in relation to the Winding Up (including
all costs of redeeming CS Master Fund Shares during the Soft
Lock-Up Period, all amounts payable under the Excess Costs
arrangements described below, printing costs, postage costs,
professional advice and the Liquidator's fees) are currently
estimated to amount to approximately GBP740,000, or 1.07p per
Share, which excludes the fees and expenses of service providers in
the ordinary course of business up to the Effective Date in
accordance with the terms of their engagement.
Excess Costs
Pursuant to the terms of the Launch Costs Agreement and the
Costs Contribution Agreement, it was agreed that, in the event that
the Company ceases to invest in the CS Master Fund on or before 27
June 2019 (the seventh anniversary of the first Admission of the
Shares), an amount equal to the launch costs of the Placing and the
Placing Programme would become payable by the Company to Credit
Suisse AG (the "CS Master Fund Manager") (the "Excess Costs"). The
Excess Costs are GBP613,595.
The terms of the Launch Costs Agreement and the Costs
Contribution Agreement provide that the CS Master Fund Manager is
required to reimburse Dexion for the Excess Costs (all of which
were initially met by Dexion) in periodic instalments over three
years and that, in the event that the Excess Costs become payable
by the Company to the CS Master Fund (as described above), the CS
Master Fund Manager is required to reimburse Dexion to the extent
that such periodic instalments have not already discharged the
obligation in full. The amount payable by the CS Master Fund
Manager to Dexion on or around the Effective Date under this
provision is GBP158,626 (the "Dexion Reimbursement"), with the
balance of the Excess Costs retained by the CS Master Fund Manager.
For the avoidance of doubt, the Dexion Reimbursement is paid by the
CS Master Fund Manager and is not an additional cost to the Company
over and above the Excess Costs.
Related party transactions
During the 12 months up to the date of this document, the
Company paid Dexion GBP114,101 in commission relating to the
placing of Sterling Shares pursuant to the Placing Programme.
Dexion is a related party of the Company under the Listing Rules,
as an associate of the Company's investment manager, and such
payment amounted to a "small related party transaction" under
Listing Rule 11, Annex 1, paragraph 1. When aggregated with the
Dexion Reimbursement, the total payment of GBP272,727 represents a
"smaller related party transaction" for the purposes of Listing
Rule 11.1.10.
Winding Up
It is proposed that the Company be voluntarily wound-up in
accordance with section 391(1)(b) of the Law and that Ashley
Charles Paxton and Linda Maree Johnson of KPMG Channel Islands
Limited of 20 New Street, St Peter Port, Guernsey GY1 4AN be
appointed liquidators of the Company. The remuneration of the
Liquidator shall be fixed on the basis of time spent by the
Liquidator and members of its staff in attending to matters arising
prior to and during the Winding Up. The payment of fees and
expenses (other than in respect of accrued fees and expenses) to
the Directors will cease from that point and no payments for loss
of office will be made.
If the Winding Up Resolutions to be proposed at the
Extraordinary General Meeting of the Company are approved, the
Winding Up will commence on 24 September 2014 (the "Effective
Date").
As at the close of business on 29 August 2014 (the latest
practicable date prior to the publication of this document), the
unaudited estimated Net Asset Value of the Company was GBP67.91
million (equivalent to 98.24p per Share). If Shareholders vote in
favour of the Winding Up, the Liquidator will set aside sufficient
assets in a Liquidation Fund to meet the Company's liabilities
including the costs of the Winding Up. The Liquidation Fund will
include a Retention which will be set at an amount that the
Liquidator considers sufficient to meet any unascertained and
unknown liabilities of the Company. This Retention is currently not
expected to exceed GBP150,000. The Retention is in addition to the
costs of the Winding Up as set out in more detail under the heading
"Costs of the Winding Up" above.
Arrangements with the Company's service providers
Assuming the Winding Up is approved, all arrangements with the
Company's service providers, with the exception of the share
registrar, will be terminated upon the Company being placed into
voluntary winding up or when any services being performed in
connection with the Winding Up have been completed. No compensation
is payable in connection with the termination of these
contracts.
Dividends
As announced on 3 July 2014, the Company declared an interim
dividend, in respect of the period starting 1 April 2014 and ending
30 June 2014, of 1.25p per Sterling Share, which was paid on 12
August 2014 to holders of Sterling Shares on the register on 11
July 2014. The Company does not anticipate making further dividend
payments before (or after) the Effective Date.
Expected Timetable
2014
Latest time and date for receipt of Forms of 11.30 a.m. on 22
Proxy for the Extraordinary General Meeting September
Register of members closed 5.00 p.m. on 23
September
Suspension of Shares from trading on the London 7.30 a.m. on 24
Stock Exchange and suspension of the listing September
for Shares on the Official List
Extraordinary General Meeting 11.30 a.m. on 24
September
Effective Date: Winding Up commences and Liquidator 24 September
appointed
Cancellation of Shares from trading on the 8.00 a.m. on 8 October
London Stock Exchange and cancellation of listing
for Shares on the Official List
Redemption proceeds of CS Master Fund shares By 30 November (1)
received
Settlement of Winding Up monies As soon as practicable
following receipt
of redemption proceeds
from the CS Master
Fund
(1) Under normal conditions, the redemption proceeds should be
received in early November. The CS Master Fund has certain rights
to postpone or defer redemptions as set out in the Circular.
The above times and/or dates may be subject to change and, in
the event of such change, the revised times and/or dates will be
notified to Shareholders by an announcement through a Regulatory
Information Service.
Enquiries:
Robin Bowie / Ana Haurie Tel: +44 (0) 20 7832 0900
Dexion Capital plc
Chris Copperwaite Tel: +44 (0) 1481 743
Dexion Capital (Guernsey) Limited 940
Terms used and not defined in this announcement shall, unless
the context otherwise requires, bear the meanings given to them in
the Circular dated 3 September 2014.
A copy of the Circular will shortly be submitted to the National
Storage Mechanism and will shortly be available for inspection at:
www.Hemscott.com/nsm.do
This information is provided by RNS
The company news service from the London Stock Exchange
END
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