Circular & Notice of Extraordinary General Meeting

RNS Number : 7742I

ICG-Longbow Snr Sec UK Prop DebtInv

16 December 2020

 

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM, THE UNITED STATES, AUSTRALIA, CANADA, THE REPUBLIC OF SOUTH AFRICA, JAPAN OR ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION.

16 December 2020

ICG-Longbow Senior Secured UK Property Debt Investments Limited

Publication of Circular and Notice of Extraordinary General Meeting

The Board of ICG-Longbow Senior Secured UK Property Debt Investments Limited (the "Company") is pleased to announce the details of the proposed orderly realisation of the Company and associated adoption of the New Investment Objective and Investment Policy (together, the "Proposal"). The Proposal is subject to Shareholder approval as required by the Law and the Listing Rules.

A circular in connection with the Proposal (the "Circular") is expected to be posted to Shareholders later today  containing, amongst other things, a letter from the Chairman of the Company, an expected timetable of principal events, a notice of the Extraordinary General Meeting and details of the action to be taken by Shareholders, together with the Form of Proxy for the Extraordinary General Meeting.

The Circular will shortly be available on the Company's website at  www.lbow.co.uk. The contents of such website are not incorporated into, and do not form part of, this announcement (the "Announcement"). A copy of the Circular will also be submitted to the National Storage Mechanism and will be available for inspection at   https://data.fca.org.uk/#/nsm/nationalstoragemechanism .

Capitalised terms used in this Announcement, unless otherwise defined, have the same meanings as set out in the Circular.

Background to the Proposal

As announced by the Company on 3 November 2020, the Board has decided to recommend the orderly realisation and return of capital to Shareholders following a review of the Company's strategy and in line with the recommendation of its Investment Adviser.[i]

The underlying performance of the Company's portfolio has proved resilient and defensive through the Covid-19 pandemic, with no impairments, which enabled the Company to deliver a fully covered dividend to Shareholders in September 2020. The Board's focus is, however, on continuing to maximise shareholder value and it therefore believes that given the current economic backdrop and re‐rating of the sector, an orderly realisation is the most prudent option.

In reaching this decision, the Board took account of a number of factors including the prevailing discount to Net Asset Value of the Ordinary Shares, the market capitalisation of the Company and the lack of liquidity of the Ordinary Shares, the consequent difficulty in growing the Company's issued share base to permit greater diversification and liquidity for Shareholders, feedback received from Shareholders and the expected maturity profile of the Group's portfolio.

The Board has not made this decision because of a lack of potential reinvestment opportunities or because of any performance issues with any of the existing loans, all of which are expected to be repaid in full, along with all contractual interest and exit fees. However, the Board believes that an orderly realisation of the Group's assets will return better value to Shareholders than any other option, including proposing to put the Company into formal winding up.

In order to do this, the Company is seeking Shareholder approval to replace the Current Investment Objective and Investment Policy with the New Investment Objective and Investment Policy. If approved by Shareholders at the Extraordinary General Meeting, the new strategy would be implemented in such a manner as will endeavour to realise all the Group's investments in a manner that achieves a balance between maximising the net value received from those investments and making timely returns to Shareholders. The orderly realisation strategy would not result in the liquidation of the Company in the immediate future or require the Group to dispose of assets within a defined or accelerated timeframe.

The Board will continue to have an important role in representing Shareholders' interests and ensuring the best value is obtained during the realisation of the portfolio of assets. The number of Board members will reduce as the workload diminishes over time, while still retaining the mix of skills required to discharge their duties and statutory responsibilities.

Should the adoption of the New Investment Objective and Investment Policy be approved by Shareholders, the Board will seek to continue the payments of dividends out of earnings for as long as it is prudent and economic to do so. However, it is likely that at some point prior to the Company being placed into liquidation these will cease as the asset value and diversification of the Company's portfolio shrinks.

Summary of the Proposal

Adoption of the New Investment Objective and Investment Policy

The Board is proposing to adopt the New Investment Objective and Investment Policy to facilitate an orderly realisation strategy and to cease making any new investments except in very limited circumstances as detailed in the Circular.

The adoption of the New Investment Objective and Investment Policy is a material change for the purposes of the Listing Rules, which accordingly requires both the consent of the Financial Conduct Authority and Shareholders. The Company has received written approval from the Financial Conduct Authority to adopt the New Investment Objective and Investment Policy and, accordingly, is now seeking Shareholder approval to adopt the New Investment Objective and Investment Policy at the Extraordinary General Meeting in accordance with the Listing Rules.

The Board will endeavour to realise all the Group's investments in a manner that achieves a balance between maximising the net value received from those investments and making timely returns to Shareholders. The Group's investments continue to perform satisfactorily and in the view of the Directors, being prescriptive as regards the timeframe for realising the Group's investments could prove detrimental to the value achieved on realisation. Therefore, it is the Board's view that the strategy for the realisation of the Group's investments will need to be flexible and may need to be altered to reflect changes in the circumstances of a particular investment or in the prevailing market conditions. In so doing, the Board will take account of the continued costs of operating the Group. The Company's listing and the capacity to trade in its Ordinary Shares will be maintained for as long as the Directors believe it to be practicable and cost-effective during the orderly realisation, subject to being able to meet the requirements of the Listing Rules. Accordingly, once a significant proportion of the Company's assets have been realised and distributed to Shareholders, the Board will then consider, in light of the then prevailing market conditions and Shareholders' views, whether it would be appropriate to propose a resolution for delisting the Ordinary Shares, which would require additional Shareholder approval at that time.

Irrespective of whether or not the Board seeks to delist the Ordinary Shares, once all, or substantially all, of the Group's investments have been realised, the Company will, at an appropriate time, seek Shareholders' approval for it to be placed into voluntary winding up.

Mechanics for returning cash to Shareholders

The Board has carefully considered the potential mechanics for returning capital to Shareholders as part of the orderly realisation and return of capital to Shareholders. The Articles already include a B Share Mechanism for returning capital to Shareholders and the Board currently believes it is in the best interests of Shareholders as a whole to utilise the B Share Mechanism to return capital to Shareholders at the appropriate time, as set out in further detail in the Circular.

The Board considers that administering the B Share Mechanism would be relatively simple and therefore cost-effective. However, the Company reserves the right to use an alternative mechanism to return capital to Shareholders from time to time if the Board believes any such alternative mechanism to be in the best interests of Shareholders.

Benefits of the Proposal

The Directors believe, having taken into account the views of a range of Shareholders, the Investment Adviser and the AIFMⁱ, that the Proposal is in the best interests of the Company and its Shareholders as a whole, and should yield the following principal benefits:

· implementing an orderly realisation of investments is expected to achieve a balance between maximising the net value received from those investments and making timely returns to Shareholders;

· the Company will be able to return cash to Shareholders in a cost-effective and timely manner through the proposed B Share Mechanism (or by way of such other mechanisms which the Directors consider, in their discretion, are in the best interests of Shareholders from time to time); and

· it is intended that the Company's admission to listing on the premium segment of the Official List and to trading on the premium segment of the Main Market would be maintained during the orderly realisation and the capacity to trade in the Ordinary Shares will be maintained for as long as the Board believes it to be practicable, subject to ongoing adherence to the relevant Listing Rules (including the requirement that sufficient shares be held in public hands) and all other applicable law and regulation.

The Extraordinary General Meeting

The Extraordinary General Meeting is to be held at Floor 2, Trafalgar Court, Les Banques, St Peter Port, Guernsey GY1 4LY at 10.30 a.m. on Thursday, 14 January 2021.

At the Extraordinary General Meeting, an ordinary resolution will be proposed to adopt the New Investment Objective and Investment Policy. The ordinary resolution to adopt the New Investment Objective and Investment Policy requires a majority of those Shareholders voting to vote in favour in order to be passed. The vote on the Resolution contained in the Notice of Extraordinary General Meeting will be held by poll, which the Board considers to be the fairest approach in the light of the restrictions in relation to Covid-19 set out below.

The Guernsey government guidance on reducing social interactions between people (social distancing) to reduce the transmission of Covid-19, and specifically the avoidance of large gatherings and non-essential travel, has been eased. Currently, the Guernsey government have implemented a mandatory isolation period for people travelling to the island, which might make in-person attendance at the Extraordinary General Meeting impracticable for Shareholders, corporate representatives or proxies who would need to travel to Guernsey to attend in person. Shareholders should carefully consider whether or not it is appropriate to attend the Extraordinary General Meeting if the guidance continues to be the same or becomes even more restrictive.

The situation in respect of Covid-19 is developing rapidly and Shareholders should note that further changes may need to be put in place at short notice in relation to the Extraordinary General Meeting.

Updates on any changes to the proceedings of the Extraordinary General Meeting will be published on the Company's website www.lbow.co.uk and notified by the Company through a Regulatory Information Service announcement.

Shareholders should carefully read the Circular in its entirety before making a decision with respect to the Proposal.

Expected Timetable

The current expected timetable of principal events for the implementation of the Proposal is set out below and in the Circular. If any of the key dates set out in the expected timetable change, an announcement will be made through a Regulatory Information Service. All times shown in this Announcement are London times, unless otherwise stated.

Publication of Circular	16 December 2020
Latest time and date for receipt of Form of Proxy or CREST Proxy Instruction	10.30 a.m. on 12 January 2021
Time and date of the Extraordinary General Meeting	10.30 a.m. on 14 January 2021

For further information, please contact: Ocorian Administration (Guernsey) Limited: Rosemary Osborne-Burns [phone] Cenkos Securities plc: Will Rogers Rob Naylor Will Talkington [phone] [phone] [phone] Maitland/AMO Limited: [e-mail] Sam Turvey Finlay Donaldson [phone] [phone] ICG Real Estate   : Olivia Montgomery   + 44 (0)20 3545 1543

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[i] Shareholders should note that, as announced by the Company on 25 November 2020, the Company terminated the appointment of the Investment Adviser, Intermediate Capital Managers Limited, pursuant to the Investment Advisory Agreement and appointed the AIFM, ICG Alternative Investment Limited, an affiliate of the Investment Adviser, as its alternative investment fund manager pursuant to the AIFM Agreement.

Cautionary statements

This Announcement may contain and the Company may make statements containing "forward-looking statements" with respect to certain of the Company's plans and its current goals and expectations relating to its future financial condition, performance, strategic initiatives, objectives and results. Forward-looking statements sometimes use words such as "aim", "anticipate", "target", "expect", "estimate", "intend", "plan", "goal", "believe", "seek", "may", "could", "outlook" or other words of similar meaning. By their nature, all forward-looking statements involve risk and uncertainty because they relate to future events and circumstances which are beyond the control of the Company.

As a result, the actual future financial condition, performance and results of the Company may differ materially from the plans, goals and expectations set forth in any forward-looking statements. Any forward-looking statements made in this Announcement by or on behalf of the Company speak only as of the date they are made. The information contained in this Announcement is subject to change without notice and except as required by applicable law or regulation, the Company expressly disclaims any obligation or undertaking to publish any updates or revisions to any forward-looking statements contained in this Announcement to reflect any changes in the Company's expectations with regard thereto or any changes in events, conditions or circumstances on which any such statements are based.

 

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