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FRM Diversified Alph (DIVA)

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Friday 17 April, 2009

FRM Diversified Alph

Further Statement re Liquidit

RNS Number : 7758Q
FRM Diversified Alpha Limited
17 April 2009
 



FRM Diversified Alpha Limited (the 'Company')


17 April 2009


Further to the announcement made on 12 March 2009, the board of directors of the Company (the 'Board') has been considering several options for the future of the Company. The Board believes, given the size, nature and activities of the Company, the best interests of shareholders of the Company would be served by proceeding with one of the following two options.


The first option would be to place the Company into liquidation. A liquidation would involve putting to shareholders a resolution to put the Company into a members' voluntary liquidation, the appointment of liquidators, the repayment of the Company's liabilities and a realisation of the Company's portfolio. Repayment of the Company's liabilities, which include the facility being used to finance currency hedging, would necessitate the removal of the currency hedge.


The second option would be to place the Company into a managed wind-down outside of a formal voluntary liquidation, with a view to realising the assets of the Company and returning cash to shareholders on a timely basis. To implement such a strategy the Company's investment policy would be changed to prevent any further new investments and committing the Company to redeeming its portfolio. Only once the vast proportion of the Company's assets have been realised on an orderly basis would the Board propose, in the light of prevailing market conditions and shareholders' views, a formal voluntary liquidation of the Company.


Further to the liquidity analysis released on 12 March 2009, the Investment Manager has provided the Board with further details of the anticipated liquidity profile of the Company. From information available at today's date, the Board believes that the Company's assets could be realised from 30 June 2009 on the following basis:


0 - 3 Months

4 - 6 Months

7 - 12 Months

13 - 24 Months

24 Months +

Unknown

69.42%

2.59%

4.51%

5.42%

10.09%

7.97%



The above percentages refer to the dealing dates for the redemptions if placed at 30 June 2009. It would generally be expected that cash would be available from such redemptions on average within 60 days of the relevant dealing date.  Shareholders should expect that, under a managed wind-down, the Board and the Investment Manager would be committed to distributing as much of the available cash as quickly as reasonably possible having regard to the liquidity profile set out in the table above. It is intended that overall, in order to minimise administrative burden, 3 to 4 distributions will be made.


It should be noted that the Company is currently in a particularly strong position as regards portfolio liquidity as compared with its peers.


The Investment Manager has also provided the Board with details of the Company's portfolio of assets on a look-through basis, on the basis that increased portfolio transparency is in the best interests of shareholders ahead of the continuation vote. The table below shows the Company's significant positions (>1%) as they are expected to be as at 30 June 2009 based on information available at today's date (it should be noted that the cash element shown here includes both cash and receivables):

Cash
63.81%
DE Shaw Composite
4.17%
Confidential Multi-Process Manager
4.03%
Kensington Global Strategies Fund
3.79%
Cerberus
2.76%
The Childrens Investment Fund
2.38%
BlueBay Value Recovery Fund Limited
2.13%
Ferox
2.11%
CQS Convertible & Quantitative Strategies Fund
2.04%
Spinnaker Global Opportunity Fund
1.80%
Spinnaker Global Strategic Fund
1.52%
Castlerigg
1.39%
Drawbridge Global Macro
1.30%
North Run
1.20%
Plainfield Special Situations
1.16%


 


The Board intends to seek additional feedback from major shareholders on the two options under consideration. Following consultation with major shareholders, a decision will be made by the Board as to whether a liquidation or a managed wind-down is the most appropriate course of action. Following such decision, a further announcement, including the timetable for the EGM to put the continuation vote to investors and to seek shareholder approval for either a liquidation or managed wind-down (as appropriate) will be made in due course. The Board currently expects to hold the EGM by the end of June, although the timetable may be extended at the Board's discretion. Each of the options is subject, for its implementation, on Board approval and all requisite shareholder and regulatory approvals being received.



Contacts: 


FRM 

Mark Shaw                           020 7968 6141

Greg Taylor                          020 7968 6206


JPMorgan Cazenove          020 7588 2828

Angus Gordon Lennox


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