Circ re. proposed solvent winding-up of Company
28 Mai 2010 - 5:05PM
UK Regulatory
TIDMLLT
RNS Number : 7664M
Limelight VCT plc
28 May 2010
For Immediate Release
28 May 2010
Limelight VCT plc
("Limelight VCT" or the "Company")
Proposed Solvent Winding up of the Company
Notice of General Meeting
Limelight VCT plc is pleased to announce that today it has posted a Circular and
Notice of General Meeting to Shareholders to appoint liquidators and solvently
wind up the Company. The General Meeting will be held at 5pm on 24 June 2010 at
41 - 44 Great Queen Street, London WC2B 5AD.
Having now exceeded the minimum three year period required for VCT status, the
Board has been considering possible future plans for the Company. As agreed the
Directors have now completed the VCT Market Review, as set out in the Disposal
Circular dated 26 February 2010, the results and recommendations of which are
contained in the Circular. Extracts of the Circular are set out below:
Background
The Company committed to the following course of action following completion of
the Disposal:
'The Company intends to pursue 2 options:
1. It will continue withthe current investment policy whilst carrying out a
review of the current state of the film finance industry in considering whether
there are suitable opportunities for investment. VCT Rules dictate that the
Company has 6 months from receipt of the Disposal proceeds to redeploy the funds
or distribute them to Shareholders and therefore it has up to 6 months to
complete the market review. The Directors are committed however, to completing
this review in such a way as to ensure the decision is made as quickly as
possible.
2. Should this review conclude that the opportunities do not remain attractive
for investors then the Company will attempt to solvently wind up the Company and
distribute the cash and any other assets to Shareholders. The Directors would
expect to have held the General Meeting to approve the solvent winding up of the
Company within 2 months of the completion of the market review although this
timeline will be accelerated in the interest of the Shareholders if at all
possible.'
Now, having conducted a Market Review of opportunities available in the
marketplace, in the opinion of the Directors continuing to trade is not likely
to increase returns to shareholders.
This is due to the challenges highlighted in the Market Review as follows:
1. It is hard to secure investment deals when offering tax credit
funding only. This is due to the tax credit discounting being the lowest risk
element of most feature film financing packages and as such (especially in the
current market where finance is limited) is frequently only offered to a
financier also willing to offer pre-sale funding or take a more risky gap
position in the film.
2. There are now more competitors in the UK tax credit financing sector
than there were when the VCT started. In this environment of comparatively low
interest rates, financiers drawing on more traditional bank facilities are able
to offer rates for tax credit financing much more competitively, making the
VCT's (the Company's) 20% fixed premium unattractive.
3. The VCT's remaining competitive advantage is its willingness to
advance 100% of the forecast value of the tax credit and to take its return from
sales of the film. However, this strategy has proved risky on previous
investments, with the return on a number of films being impaired or delayed as a
result of poor sales and the difficult state of the international sales market
for independent films.
4. The final consideration is that even when the VCT (the Company) was
able to secure a good number of deals the profits generated were insufficient to
cover the substantial costs of running the VCT.
The Board and the Investment Manager have therefore investigated the best route
for the return of capital to Shareholders. The Board and the Investment Manager
are both of the view that the optimum way for Shareholders to have their value
realised, and returned to them, is through the orderly winding-up of the
Company.
Should the Company seek to continue deployment of funds as per the existing
investment policy, the likely monthly running costs of the Company would be
GBP15,000. This is based on the historical costs of running the Company and
equates to a reduction in the NAV of the Company of 3p per Share per year. This
coupled with the limited opportunity to secure revenues would result in a steady
diminution in the NAV of the Company over time.
The Directors therefore recommend that the Company be placed into members'
voluntary winding-up. This would permit a low cost structured winding-up and
such a process would maximise the amount returned to Shareholders.
The Winding-up of the Company, the Appointment of Liquidators and the
Cancellation of the Listing of the Shares on the Official List
The Board proposes that the Company be placed into members' voluntary winding-up
and (after payment of its liabilities and after deducting the costs of
implementation) the cash held by the Company and any net proceeds from the last
few remaining assets be distributed amongst Shareholders in accordance with the
provisions of the Articles. This will involve the suspension of the listing of
the Shares on the Official List on the morning of the General Meeting. If the
Resolutions are passed at the General Meeting, the Company will apply for
cancellation of trading of the Shares on the Official List with cancellation
expected to take place on the second day after the date of the General Meeting.
The winding-up of the Company will commence immediately following the General
Meeting.
Members' Voluntary Winding-up
It is proposed that the Company should be placed into members' voluntary
winding-up, and that Stephen Ryman and Robert Smailes of Shipleys LLP should be
appointed Liquidators of the Company. The winding-up of the Company will be a
solvent winding-up in which all creditors will be paid in full. The appointment
of the Liquidators becomes effective immediately upon the Resolutions being
passed. At this point the powers of the Directors will cease and the Liquidators
will assume responsibility for the winding-up of the Company, including the
payment of fees, costs and expenses, the discharging of the liabilities of the
Company and the distribution of its surplus assets.
Potential Returns and Duration and Uncertainties of Winding-up
The recent disposal of predominantly all of the Company's assets for cash (the
'Disposal') should enable the Liquidators to make distributions in a timely
manner following the passing of a resolution to wind-up the Company.
The Board has been notified that the proposed Liquidators would hope to make a
first interim distribution to Shareholders within six weeks of their
appointment, being on or around 5 August 2010.
The amount of this distribution, which will be determined by the Liquidators,
will be equal to the Company's cash resources at that time, less all known
liabilities and a retained amount to cover unknown liabilities including
liquidation costs and corporation tax. Based on information currently available,
the Board estimates that the interim distribution per share could be in the
region of 65p.
Once all costs and corporation tax obligations have been confirmed and paid or
provisioned, and any final investment values realised, a final distribution will
then be made. We anticipate this final distribution would be made within 12
months of the Liquidators' appointment.
The unaudited net asset value per Ordinary Share as at 30 April 2010 is 84.71p
and, using this asset value as the base position, the Board anticipate the final
total distribution (including the interim distribution above) to be
approximately 83p per Ordinary Share.
Given that the final distribution will be determined at a future date, it is
difficult at this stage to estimate the final position. Shareholders should be
aware that actual payments will depend on movements in the Company's net assets
from 30 April 2010 to the date of final distribution, whether any unforeseen
liabilities arise and the actual realised values of the remainder of the
investment portfolio (being at this stage only the shares held in Adulthood Ltd
and a sales advance due from Skellig Productions Ltd, against which full
provisions are currently in place).
Summary of the Proposal for Winding-up
Resolution 1 relates to the winding-up of the Company and Resolutions 2, 3 and 4
relate to the appointment of the Liquidators, the grant to the Liquidators of an
authority to distribute the Company's assets in accordance with the Insolvency
Act 1986 and the fixing of their remuneration and expenses.
The winding-up process will return the net proceeds of realisation of the
Company's portfolio to Shareholders in the short to medium term. This is subject
to the direct costs of winding-up and realisation which are estimated to be
approximately GBP30,000.
If the Resolutions put to the Shareholders are not passed, the Board will
continue its consideration of the future strategy of the Company and the
strategic alternatives available to it as a VCT.
Recommendation of the Board
In the Board's opinion the Proposals described in this circular and the proposed
Resolutions set out in the Notice of the General Meeting are in the best
interests of the Shareholders as a whole. Accordingly, the Board recommends that
all Shareholders vote in favour of all the proposed Resolutions, as they intend
to do in respect of their own shareholdings, amounting, in aggregate, to 200,000
Ordinary Shares, which represent 3.56% of the Company.
Expected Timetable
Despatch of Notice of General Meeting
28 May 2010
Deadline for receipt of Proxy Forms
5.00pm on 22 June 2010
Suspension of trading in the Ordinary Shares on the Main Market 7:30am on 24
June 2010
General Meeting
5.00pm on 24 June 2010
Cancellation of the listing of the Shares on the Main Market
8.00am on 28 June 2010
A copy of this Circular is available from the offices of Limelight VCT plc, 41 -
44 Great Queen Street, London, WC2B 5AD or from the Document Viewing Facility of
the UKLA.
Enquiries
Limelight VCT plc
Michael Henry 020 7478 9144
Beaumont Cornish Limited
Roland Cornish 020 7628 3396
The Definitions and Notice of General Meeting are attached to this announcement:
DEFINITIONS
The following definitions apply throughout this document unless the context
requires otherwise:
Articles the
articles of association of the Company;
Beaumont Cornish Limited Beaumont Cornish
Limited, authorised and regulated by the Financial Services Authority;
Board the
board of directors of the Company;
Business Day any day
(except Saturdays and Sundays) on which banks and the principal
recognized
exchanges in London are open for business;
Company
Limelight VCT PLC;
Disposal the
disposal of certain investments held by the Company as detailed in the Disposal
Circular and completed on 24 March 2010.
Disposal Circular the
Circular to Shareholders dated 26 February 2010 setting out details of the
Disposal of certain investments held by the Company
FSA
Financial Services Authority;
General Meeting or GM the general
meeting of the Company convened for 5pm a.m. on 24 June 2010 (and including any
adjournment thereof), notice of which is set out on page 11 of this document;
ITA
Income Tax Act 2007 (as amended);
Investment Manager Limelight
Investment Management Limited;
Liquidators the
Liquidators jointly and severally of the Company proposed to be appointed at the
General Meeting;
Listing Rules the
rules relating to admission to the Official List;
Main Market the Main
Market of the London Stock Exchange;
Market Review a review
completed by the Directors of the ability of the Company to deploy funds as per
its existing investment policy;
NAV Net
Asset Value;
Notice of General Meeting the notice
convening the General Meeting set out on page 11 of this
document;
Official List the
Official List of the UK Listing Authority;
Proposals means
the proposals to delist the Company, and sanction and complete the solvent
wind-up the Company
Proxy Form the form
of proxy for use in connection with the General Meeting;
Register the
register of members of the Company;
Resolutions the
various resolutions as set out in the Notice of General Meeting;
Registrars Share
Registrars Ltd, Suite E, First Floor, 9 Lion and Lamb Yard, Farnham, Surrey GU9
7LL who maintain the register of members;
Share, Ordinary Shares and Shares ordinary shares of 10p
each in the capital of the Company;
Shareholder(s) holders of
Shares;
UK Listing Authority the FSA
acting in its capacity as the competent authority under the Financial Services
and Markets Act 2000; and
VCT a
venture capital trust as defined in section 259 ITA.
LIMELIGHT VCT PLC
(Registered in England and Wales No. 05594694)
NOTICE OF GENERAL MEETING
NOTICE IS HEREBY GIVEN that a General Meeting of Limelight VCT PLC will be held
on 24 June 2010 at 41 - 44 Great Queen Street, London WC2B 5AD, commencing at
5pm, for the purpose of considering and, if thought fit, passing the resolutions
set out below as special and, in one case, ordinary resolutions.
SPECIAL RESOLUTIONS
1 Subject to the passing of Resolutions 2,3,and 4 THAT the Company be
wound-up voluntarily pursuant to Section 84 of the Insolvency Act 1986 and
Stephen Ryman and Robert Smailes of Shipleys LLP, 10 Orange Street, Haymarket,
London, WC2H 7DQ, having consented to act, be and are hereby appointed Joint
Liquidators for the purposes of such winding-up, and are to act jointly and
severally (the "Liquidators").
2 Subject to the passing of Resolutions 1, 3 and 4, THAT the
Liquidators be and are hereby authorised to distribute all or part of the assets
in cash to the shareholders in proportion to their shareholdings.
3 Subject to the passing of Resolutions 1, 2 and 4, THAT the
Liquidators be authorised under the
provisions of Section 165(2) of the
Insolvency Act 1986 to exercise the powers laid down in Schedule 4, Part I, of
the Insolvency Act 1986.
ORDINARY RESOLUTION
4. Subject to the passing of Resolutions 1, 2 and 3, THAT the
Liquidators be entitled to receive remuneration for their services by reference
to the time properly given by them and their staff in attending to matters
arising on the winding- up.
Dated: 28 May 2010
By Order of the Board
.........................................
This information is provided by RNS
The company news service from the London Stock Exchange
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