AGM Statement

Electra AGM Statement                             

 

 

The statement below will be made by the Chairman at the Annual General Meeting
of Electra Investment Trust PLC to be held at 12 Noon today.

 

                                                                               

I am pleased to report that Electra has made considerable progress over the
past twelve months, substantial value has been generated from realisations of
portfolio investments and Electra's share price has risen by approximately 39
per cent*. 

 

The climate for realisations of private equity investments has improved
significantly as stock markets have recovered and economic conditions
strengthened.  As an illustration, during the year to 30 September 2003 Electra
received £54 million from realisations.  In the current financial year Electra
has already announced anticipated realisations with aggregate proceeds of
approximately £200 million.

 

This progress has led to a material improvement in Electra's financial
position. The Board anticipates that by 31 March 2004 Electra will be in a net
cash position.  Electra's investment manager, Electra Partners, believes that
this improved climate for realisations is continuing, with a number of further
realisations and refinancings in prospect.  The Board therefore expects to
propose a further return of capital to shareholders in the summer.  It is the
Board's current intention that at least £100 million be returned to
shareholders by way of a tender offer at the then net asset value per share.** 
Further realisations in 2004 will enable additional returns of capital which
the Board expects to be biased towards on-market share buy-backs.

 

Electra's investment policy, which was approved by shareholders in June 2001,
primarily focuses on the realisation of investments and returns of capital,
with at least two-thirds of cash flow from realisations being returned to
shareholders.  The Board believes this strategy has provided Electra with
increased investment flexibility, which has allowed superior value creation
since its introduction.  In particular, this flexibility has allowed Electra to
time portfolio realisations appropriately to maximise value and also to make
selected reinvestments on what the Board believes to be attractive terms.

 

The Board continues to believe that there is a role for investment vehicles
such as Electra, providing cost effective and liquid access to private equity. 
The Board stated in June 2001 that Electra's investment strategy would be
reviewed in 2004.  To this end, the Board, with its advisers, continues to
assess the ways in which Electra can best position itself to maximise value
from its existing portfolio as well as creating further value from investments
sourced by Electra Partners. 

 

At this stage the inclination of the Board is to propose a fuller reinvestment
strategy, which will enable value from the current portfolio to be protected
and more effectively realised as well as generating value from new
investments.  The Board remains mindful of the need to retain a focus on
minimising the discount to net asset value per share at which Electra's shares
may trade and therefore expects that the strategy would also include an ongoing
commitment to returns of capital, including share buy-backs and a return to
paying dividends.

 

The Board expects that it will be in a position to provide an update for
shareholders, alongside the interim results, in June 2004.

 

 

*  Relates to the price change from the close of trading on 28 February 2003 to
the close of trading on 1 March 2004.  Information in this announcement on the
price at which Electra shares have been bought or sold cannot be relied upon as
a guide to future performance of the Electra shares.

 

**  The tender offer price will be calculated by reference to the latest
published net asset value, adjusted for market movements and any portfolio
changes to the date when the price is calculated and taking into account the
costs of the tender offer.

 

Enquiries:

 

Sir Brian Williamson,

Chairman, Electra Investment Trust PLC          020 7831 6464

 

Hugh Mumford,

Chief Executive, Electra Partners Limited       020 7831 6464

 

Nick Miles,

M: Communications                               020 7153 1530