Notice of EGM

RNS Number : 9911A

VinaCapital Vietnam Opp. Fund Ld

01 October 2015

 

1 October 2015

VinaCapital Vietnam Opportunity Fund Limited (or the "Company")

Notice of Extraordinary General Meeting

VinaCapital Vietnam Opportunity Fund Limited (the "Company") (AIM: VOF) announces that it intends to seek the approval of the Company's shareholders ("Shareholders") for the migration of the Company from the Cayman Islands to Guernsey (the "Migration") and certain amendments to the Company's articles of association. Shareholder approval will be sought at an extraordinary general meeting ("EGM") of the Company's Shareholders to be held on 27 October 2015 at the offices of Northern Trust, Trafalgar Court, Les Banques, St. Peter Port, Guernsey GY1 3QL on 27 October 2015 at 12.00 p.m. (noon, London time). 

Full details of the Migration, including what action Shareholders should take, are set out in a circular dated 1 October 2015 (the "Circular") that will be posted to Shareholders shortly and also made available on the Company's website at http://vof-fund.com/. The below sets out the background and reasons why the Directors are recommending that Shareholders vote in favour of the Migration at the EGM.

Background to the Migration

The Company was admitted to trading on AIM on 30 September 2003 having raised US$9.5 million since launch. Since launch, the net assets of the Company have increased to US$681 million as at 31 August 2015, while the net asset value per ordinary share of the Company (the "Shares") has increased from US$1.00 at launch to US$3.12 at the same date. The Company has grown to become one of the largest funds through which international investors can obtain an active, professionally managed exposure to investment in Vietnam. The directors of the Company (the "Directors") and the Company's investment manager, VinaCapital Investment Management Ltd. (the "Investment Manager") believe that Vietnam will continue to enjoy strong economic growth, that this will lead to attractive investment opportunities over the medium to long term and that the Company should be well positioned to take advantage of these opportunities. The proposals set out in the Circular (the "Proposals") are designed to improve the marketability of the Shares, in order to make them attractive to a larger pool of potential investors.

The Company is currently incorporated under the laws of the Cayman Islands. It is proposed that the Company de-register as an exempted limited liability company in the Cayman Islands and re-register, by way of continuation, in Guernsey. As part of the Proposals, it is the also the Directors' intention to move the trading venue for the Shares from AIM to a premium listing on the Official List and trading on the Main Market and this is expected to occur shortly after completion of the Migration. The Circular sets out the resolutions required to achieve the objectives set out above. If passed, the resolutions will give the Directors the necessary authorities to implement the changes described in the Circular without seeking any further authority from Shareholders.

Reasons for the Migration

 

In seeking to promote the Company, it has become apparent that the Company's place of domicile and its quotation on AIM are barriers to certain potential new investors.  The Directors considered a number of alternatives for the domicile of the Company and selected Guernsey for the following reasons:-

 

·    the Company can maintain its existing tax-efficient structure;

·    Guernsey has a well-established infrastructure for the administration of closed-ended funds listed on the London Stock Exchange, with a large number of funds already utilising this route;

·    Guernsey has a robust regulatory and compliance regime;

·    the process of changing domicile from the Cayman Islands to Guernsey is relatively straightforward as the existing corporate entity can migrate; and

·    Shareholders will benefit from improved protections as the Company will fall within the remit of the UK Takeover Code. Details of the UK Takeover Code are set out in the Circular.

 

If the Migration is approved at the EGM, the Company will be required to adopt new articles of association (the "Amended Articles"), a copy of which is appended to the Circular. The Amended Articles are materially similar to the Company's existing articles of association and are drafted in a standard format appropriate for a premium listed, Main Market traded, Guernsey company and in conformity with the Companies (Guernsey) Law, 2008, as amended. A summary of the key differences between the existing articles of association of the Company and the Amended Articles, which, in the opinion of the Directors, are relevant for Shareholders, are set out in the Circular.

In addition to requiring Shareholder approval, the Migration is also subject to regulatory approval from the Guernsey Financial Services Commission.

Reasons for the move to the Main Market

 

Together with the proposed Migration, the Company also intends to change its trading venue from AIM to a premium listing on the Official List and to trading on the Main Market. Following consultation with the Company's major Shareholders, the Directors believe that a move to the Main Market will:-

·    provide a more appropriate platform for the continued growth of the Company and further raise its profile and status as a growth business focused on Vietnam;

·    place the Company in a better position to improve liquidity and increase the valuation of its Shares because of the larger number of institutional investors who regularly trade in shares of companies admitted to the Main Market and the higher profile of such companies; and

·    benefit Shareholders due to the more rigorous corporate governance, regulatory and reporting requirements imposed on Main Market companies.

 

Furthermore, the Directors consider the Main Market to be a more appropriate market for a company of the size and maturity of the Company, given its growth since it was admitted to trading on AIM.  

The move to the Main Market is conditional upon the Company being registered as a Registered Closed-ended Collective Investment Scheme pursuant to the Protection of Investors (Bailiwick of Guernsey) Law, 1987 as amended, and the Registered Collective Investment Schemes Rules 2015 and also upon the relevant approvals being granted by the UK Financial Conduct Authority and the London Stock Exchange. As such, an application will be made to the UK Listing Authority and to the London Stock Exchange respectively for admission of all of the Shares to: (i) the premium listing segment of the Official List; and (ii) trading on the Main Market. It is expected that admission to trading on the Main Market ("Admission") will become effective and that dealings in the Shares on the Main Market will commence following publication of the Company's annual report and the issue of the Company's prospectus in respect of the move to the Main Market (the "Prospectus") in November. Upon Admission, trading in the Shares on AIM will be cancelled. An announcement will be made in due course detailing the timetable for the Migration and the move to the Main Market. The Prospectus will be available on the Company's website www.vof-fund prior to Admission.

On Admission, the Company will be subject to the UK Listing Rules (including the UK Corporate Governance Code and the Guernsey Code on corporate governance), the Prospectus Rules and the Disclosure and Transparency Rules. The Company will maintain its policy of holding a continuation vote every five years. From the point at which the Shares commence trading on the Main Market, they will be quoted and traded in UK pounds sterling rather than US Dollars. The Company expects its Shares to qualify for inclusion in the FTSE Indices in due course. The Company will continue to prepare its financial statements and report its net asset value in US Dollars. The nominal value of the Shares will remain as US$0.01.

 

Update of Investment Objective and Investment Policy

 

As part of the Proposals, the Company is also proposing to update its investment objective and investment policy. The new investment objective and investment policy will take effect immediately following the passing of the relevant resolution at the EGM.

 

The Directors and the Investment Manager believe that the Company's current investment objective should be updated to reflect more closely the way in which the Company's investment portfolio has developed since 2003 and to allow the Company to be able to take advantage of expected future opportunities. The Company's proposed new investment objective emphasises that it is sharply focused on opportunities in Vietnam and will be as follows:

 

"The Company's objective is to achieve medium to long-term returns through investment either in Vietnam or in companies with a substantial majority of their assets, operations, revenues or income in, or derived from, Vietnam."

 

Subject to the approval of the Migration at the EGM, the Company proposes to adopt a new investment policy which is materially similar to its existing investment policy but has been simplified to ensure that it will satisfy the UK Listing Authority's eligibility requirements for a premium listed company under the Listing Rules. In particular, the Company is introducing a limit on the level of gearing of 10 per cent. of the Company's total assets at the time that any debt is issued. There is no limit on gearing under the current investment policy.

 

The new investment policy is set out in full below:

 

"All of the Company's investments will be in Vietnam or in companies with at least 75 per cent.  of their assets, operations, revenues or income in, or derived from, Vietnam at the time of investment.

 

No single investment may exceed 20 per cent. of the net asset value of the Company at the time of investment.

 

The Company may from time to time invest in other funds focused on Vietnam. This includes investments in other funds managed by the Investment Manager. Any investment or divestment of funds managed by the Investment Manager will be subject to prior approval by the Board. No more than 10 per cent., in aggregate, of the value of the Company's total assets may be invested in other listed closed-ended investment funds. The restriction on investment in other listed closed-ended investment funds does not apply to investments in closed-ended investment funds which themselves have published investment policies to invest no more than 15 per cent. of their total assets in other listed closed-ended investment funds. 

 

The Company may from time to time make co-investments alongside other investors in private equity, real estate or similar assets. This includes, but is not restricted to, co-investments alongside other funds managed by the Investment Manager.

 

The Company may gear its assets through borrowings which may vary substantially over time according to market conditions and any or all of the assets of the Company may be pledged as security for such borrowings. Borrowings will not exceed 10 per cent. of the Company's total assets at the time that any debt is drawn down.

 

From time to time the Company may hold cash or low risk instruments such as government bonds or cash funds denominated in either Vietnamese Dong or US Dollars, either in Vietnam or outside Vietnam.

The Resolutions

The following resolutions will be put to Shareholders at the EGM: The first resolution seeks authority for the de-registration of the Company in the Cayman Islands and the re-registration of the Company in Guernsey, together with the adoption of the Amended Articles which incorporate the legal and regulatory requirements of the Company's new jurisdiction and the Listing Rules and the adoption of a new investment objective and new investment policy. The second resolution allows the Company to disapply pre-emption rights in relation to the issue of new Shares representing 10 per cent. of the Company's issued share capital following Admission. This is subject to the provision that such Shares would only be issued at a price at least equal to the net asset value per share.  Finally, the third resolution allows the Company to buy back Shares representing up to 14.99 per cent. of the Company's issued share capital which is in line with UK market practice.  The second and third resolutions are conditional upon the first resolution being passed by Shareholders at the EGM.  Shareholders should note that Shareholder approval is not being sought in connection with the proposed move to the Main Market.

The Directors believe that approval of these resolutions is in the best interests of the Company and recommend that Shareholders vote in favour of them at the EGM.

Enquiries:

Jonathon Trewavas

VinaCapital Investment Management Limited

Investor Relations

[phone]

[e-mail]

Philip J. Secrett

Grant Thornton UK LLP, Nominated Adviser

[phone]

[e-mail]

David Benda / Hugh Jonathan

Numis Securities Limited, Broker

[phone]

[e-mail]

Andrew Walton

FTI Consulting, Public Relations (London)

[phone]

[e-mail]

 

END

 

 

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