Tapestry Inv Co PCC Company Update


 
TIDMTIC 
 
TAPESTRY INVESTMENT COMPANY PCC LIMITED 
                                (the "Company") 
 
                Update on portfolio realisation and future plans 
 
 
7 October 2010 
 
Further returns of cash to shareholders 
 
The  Company currently has  net assets of  approximately GBP 21.4m, of which GBP 
4.5m is cash. 
 
The  Company  expects  a  number  of  its  underlying portfolio holdings will be 
redeemed  in the next two months so that  the Company should be in a position to 
return  approximately GBP 8-9m by way of a further compulsory partial redemption 
of shares towards the end of November 2010. 
 
The  Company also expects  to be in  a position to  return a further GBP 2-3m to 
shareholders  in February 2011, following  the anticipated receipt  of cash from 
further redemptions early in the New Year. 
 
Shareholders  should note that  the anticipated redemption  amounts stated above 
take  account of the available information regarding the redemption terms of the 
Company's  assets including notice periods, gate events, redemption restrictions 
and  settlements periods, which may be subject to material change. The amount of 
available  cash  is  also  based  on  the  latest valuations from the underlying 
managers  which may be materially different to the amount actually realised from 
the  underlying fund redemptions.  Shareholders  should note that although cash, 
once  received,  is  converted  to  GB  pounds  ( GBP),  the  underlying  funds are 
overwhelmingly  denominated in US dollars (US$) and as the Company no longer has 
a currency hedge in place, movements in the US$ /  GBP exchange rate can materially 
effect   the   amount   of  cash  in  Sterling  available  for  distribution  to 
shareholders. 
 
Anticipated Portfolio 
 
The  table below shows the Company's significant investments (excluding cash) as 
they  are  expected  to  be  held  as  at  31 January 2011, based on information 
currently available; 
 
 Estimated Percentage of Portfolio as at 31 Jan 2011 
 
 Cerberus International, Ltd.                          (side pocket)   30.4% 
 
 Blue Mountain Credit Alternatives, Ltd.               (gated)*        24.5% 
 
 Goldman Sachs Investment Partners Offshore, LP        (side pocket)   11.6% 
 
 Tapestry Pooled Account V, Ltd.                       (side pocket)   10.9% 
 
 Lenado Offshore, Ltd.                                 (side pocket)   7.0% 
 
 SAC Multi Strategy Fund, Ltd.                         (side pocket)   3.5% 
 
 Castlerigg International Limited                      (side pocket)   2.7% 
 
                                                                       90.6% 
 
*  Currently 5% quarterly 
 
 
Proposals for the liquidation of the Company 
 
At  some stage in the coming months it will no longer be appropriate or possible 
for  the Company to maintain its listing on  the Main Market of the London Stock 
Exchange  and the most appropriate course of  action will be for the  Company to 
be put into liquidation. At the end of February 2011 the remaining assets of the 
Company  are expected to be  less than  GBP10m and  receipt of cash thereafter from 
the   realisations   of  the  remaining  portfolio  is  expected  to  slow  down 
significantly.   The portfolio  will also  be highly  concentrated, with  a much 
higher  proportion of assets in side  pockets and hence greater uncertainty over 
their ongoing valuation. 
 
The  Directors of  the Company  do not  believe it  would be appropriate for the 
Company  to remain listed given the likely concentration of its portfolio at the 
end of February 2011, the Listing Rule requirement that a fund spread investment 
risk  and also that valuations  are likely to be  sufficiently uncertain for the 
Company  to be in a position to  provide sufficient information to the market so 
that  a reasonable valuation of its assets  can be made.  In addition, the Board 
is  aware that there  is very little  liquidity in the  market for the Company's 
shares  and  that  the  shares  have  become concentrated in a few shareholders' 
hands. 
 
The  Board is also concerned that the ongoing costs of maintaining a listing for 
such a small fund would be disproportionate with the benefits that maintaining a 
listing  would bring. Such costs include, inter alia, listing fees, audit costs, 
Board fees and a fee of 1 per cent. for managing the Company's assets as well as 
providing administrative and accounting services. 
 
Having consulted the Company's major shareholders, the Board expects to despatch 
a  circular to shareholders early in the New Year with proposals for the Company 
to  be put into liquidation in or  around February 2011. It is expected that any 
liquidator  appointed will seek to maximise the value of cash collected from the 
remaining  portfolio by continuing the present policy of the Company rather than 
seeking  to sell  the portfolio  in the  secondary market  at a  discount to its 
carrying value. 
 
In  light of the proposal to liquidate the Company, the Company has given formal 
notice of termination to its Manager and Investment Adviser under the management 
agreement which provides for a six month notice period. 
 
The  net  asset  valuations  of  the  Company  going forward will incorporate an 
estimated  provision  for  the  expected  costs  of the liquidation amounting to 
approximately 0.8p per share. 
 
The  Board expects  to make  an updated  announcement at  the time of the fourth 
compulsory partial redemption expected to be in November 2011. 
 
 
Contacts for queries: 
 
Tapestry Investment Company PCC Limited 
Mel Carvill (Chairman) 
01481 727111 
 
Kleinwort Benson (Channel Islands) Fund Services Limited 
Company secretary 
01481 727111 
 
Collins Stewart Europe Limited 
Andrew Zychowski 
Lucy Lewis 
020 7523 8000 
 
Collins  Stewart  Europe  Limited,  which  is  authorised  and  regulated by the 
Financial  Services  Authority,  is  acting  for Tapestry Investment Company PCC 
Limited  (the "Company")  and for  no one  else in  connection with  the matters 
detailed  in this announcement and will not  be responsible to anyone other than 
the Company for providing the protections afforded to clients of Collins Stewart 
or  for affording advice  in relation hereto,  or any other  matters referred to 
herein. 
 
 
[HUG#1449783] 
 
 
 
 
 
 
 
 
This announcement is distributed by Thomson Reuters on behalf of 
Thomson Reuters clients. The owner of this announcement warrants that: 
(i) the releases contained herein are protected by copyright and 
    other applicable laws; and 
(ii) they are solely responsible for the content, accuracy and 
     originality of the information contained therein. 
 
Source: Tapestry Investment Company PCC Limited via Thomson Reuters ONE
Tapestry Investment (LSE:TIC)
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