Information  X 
Enter a valid email address

CMA Global Hedge (CMAE)


Friday 08 October, 2010

CMA Global Hedge

Publication of Circular and N

RNS Number : 1377U
CMA Global Hedge PCC Ltd
08 October 2010





Following the announcement on 24 August 2010 stating that the Directors of the CMA Global Hedge PCC Limited (the "Company") had decided to recommend to Shareholders that the Company be placed into liquidation, the Company has today published a Circular to its Shareholders including Recommended Proposals for a voluntary winding-up of the Company. The Circular also includes Notices for two Extraordinary General Meetings of the Company to be held on 3 November 2010 and 10 November 2010, respectively.


Background to the Proposals


The Company completed three redemption offers of 20 per cent. of the Company's issued share capital (in December 2008, March 2009, and June 2009), with more than 90 per cent. of Shareholders participating in all three offers. In addition to the initial cash payments that were distributed to redeeming Shareholders, the Company made additional cash distributions during 2009 and in early 2010 from the Company's Entitlement Pools. In each of the three redemption offers, participating Shareholders received more than 80 per cent. of the prevailing NAV attributable to the relevant Shares as at the time of the redemption offer.


On 27 November 2009 the Company published a circular in which Shareholders were offered the ability to elect either to retain an interest in a listed vehicle and receive realisation distributions until the Company is formally wound up or to receive a cash payment or payments equivalent to the realisable value of the proportion of the Portfolio that was attributable to their shareholding in the Company (described as the Cash Option in the Circular of 27 November 2009). That circular stated that, once such proportion of the Portfolio was realised as resulted in the value of the Portfolio decreasing to less than $10 million, the Directors would consider proposing a resolution for an immediate formal voluntary winding-up of the Company. The proposals were approved on 15 December 2009 and, since that date, the Company has been operating as a listed run-off vehicle, with the sole objective of raising cash in the Portfolio for future distributions to Shareholders.


In December 2009 the Company made a cash distribution to all Shareholders equivalent to approximately 73 per cent. of the Company's prevailing Net Asset Value at the time (totalling approximately $122.6 million in aggregate).


Following this distribution, the Net Asset Value of the Portfolio (as at 31 August 2010) was approximately $33.1 million, of which $14.6 million is held in cash. The Company's Non-Cash Assets (excluding the Entitlement Pools) now represent less than 5.3 per cent. of the Company's size at launch. It is expected to take at least three years to generate significant further liquidity for the Company, and potentially longer for the complete realisation of the Company's assets. In light of this liquidity outlook, the current size of the Company and its ongoing fixed costs, the Board, following discussions with the Manager and the Company's other advisors, has decided to recommend to Shareholders that the Company be placed into liquidation.


Sale of the Company's Non-Cash Assets


The Manager has evaluated the secondary market for the Company's Non-Cash Assets and has sought indicative bids for their disposal. The Board and the Manager believe that the Non-Cash Assets could be realised through an immediate sale in the secondary market, in contrast to the expectation that it will take at least three years before further significant liquidity can be generated for the Company. While it is difficult to predict accurately the value at which the Non-Cash Assets may be realised, Shareholders should note that the Company disposed of certain illiquid non-cash assets following its extraordinary general meeting of 15 December 2009. The price achieved represented approximately 40 cents on the Dollar. The Board considers that the Non-Cash Assets are more illiquid than the assets realised in December 2009 and therefore expects that the value realised for the Non-Cash Assets is likely to be lower than that realised following the meeting of 15 December 2009.


The Company proposes to realise its Non-Cash Assets in the secondary market so that, when the Company enters liquidation, the Portfolio consists entirely of cash and cash equivalents. The sale of the Non-Cash Assets will also result in the realization of the Non-Cash Assets attributable to the Entitlement Pools.


Benefits of the Proposals


As at the date of the Circular the Company has distributed the majority of its Net Asset Value to Shareholders.  These distributions have reduced the size of the Company to a level at which a voluntary winding-up is both appropriate and relatively inexpensive.


The primary benefit of the Proposals is that they offer Shareholders the opportunity to realise their investment in the Company in the near future at an achievable price, rather than realising their investment at a future date and incurring market risk over this time with the Company's NAV being eroded by the running costs incurred over that period.


The remaining Non-Cash Assets of the Portfolio are illiquid in nature, and the Board considers that, in light of the continued uncertainty in the financial markets and the fixed costs of running the Company, it is preferable to liquidate the Non-Cash Assets after the First EGM rather than at a later date.


There is currently an active market offering the potential for the prompt realisation of the Company's remaining Non-Cash Assets.  The Board anticipates that such a realisation would be at a value representing a very substantial discount to the NAV attributable to those Non-Cash Assets, but that this represents a preferable means of realising Shareholder value than continuing the Company in its current situation for at least three years, with the associated running costs and asset valuation risk.


If the proposals are approved it is expected that Shareholders will overall receive considerably more cash for the illiquid assets that they held in December 2009 than Cash Option Shareholders who opted to sell their illiquid assets in the secondary market on 15 December 2009.


Overall, the Board believes that the Proposals will enable the Company to effect a cost-effective winding-up that will enable a prompt distribution of value to the Shareholders.


The Proposals for a voluntary winding-up of the Company


The proposals are:


a)   to seek Shareholder approval for the secondary market sale of the Company's remaining illiquid hedge fund investments;

b)   for the Company to adopt new Articles of Incorporation in order to enable the entitlements of the Entitlement Pool Holders to be preserved on the winding-up of the Company;

c)   to cancel the admission to the Official List of the Company's Shares; and

d)   to appoint joint liquidators and to place the Company into voluntary winding-up.


Proposals a), b), and c) above are subject to Shareholder approval at the First EGM. Proposal d) is subject to Shareholder approval at the Second EGM. The resolution to be proposed at the Second EGM is conditional on the passing of the resolution at the First EGM.


Cancellation of the Company's listing


In connection with the Company's entry into liquidation and if the First EGM Resolution is approved, the Company will seek the suspension and subsequently the cancellation of the listing of its Shares on the Official List and their trading on the Main Market of the London Stock Exchange. The suspension of the listing is proposed to take effect at 07.30 a.m. on 10 November 2010 (being the morning of the Second EGM), and the cancellation of the listing is proposed to take effect on 08.00 a.m. on 2 December 2010. 


Extraordinary General Meetings


The Proposals are subject to Shareholder approval. Notices convening the First EGM (to be held at 11.00 a.m. on 3 November 2010) and the Second EGM (to be held at 11.00 a.m. on 10 November 2010), both to be held at Arnold House, St. Julian's Avenue, St. Peter Port, Guernsey GY1 3NF, are set out in the Circular.


Both the First EGM Resolution and the Liquidation Resolution are special resolutions and require the approval of not less than seventy five (75) per cent. of the Shareholders present and voting at the relevant EGM in person or by proxy to be passed.


Expected Timetable


Latest time and date for receipt of the Form of Proxy for the First EGM

by 11.00 a.m. on 1 November 2010

First EGM

11.00 a.m. on 3 November 2010

Announcement of the result of the First EGM

3 November 2010

Latest time and date for receipt of the Form of Proxy for the Second EGM

11.00 a.m. on 8 November 2010

Suspension of the listing of the Shares

07.30 a.m. on 10 November 2010

Second EGM and, if approved, the appointment of the Joint Liquidators

11.00 a.m. on 10 November 2010

Announcement of the result of the Second EGM

10 November 2010

Closing of the Company's register and record date for participation in liquidation distributions

6.00 p.m. on 10 November 2010

Initial Distribution declared

week commencing 15 November 2010

Cancellation of the listing of the Shares

08.00 a.m. on 2 December 2010



Unless otherwise defined, capitalised terms used in this announcement will have the same meaning given to such terms in the Circular of the Company dated 7 October 2010.





CMA +1 441 295 5929

Keri Wong


Oriel Securities Limited  +44 (0) 20 7710 7600

Joe Winkley

Neil Langford





This information is provided by RNS
The company news service from the London Stock Exchange

a d v e r t i s e m e n t