(Alliance News) - Chrysalis VCT PLC on Friday said it has concluded that it is in the best interests of shareholders to undertake an orderly wind up of the company following a reduction in the investment company's size.
The venture capital trust had a net asset value per share of 57.00 pence on April 30, the end of the company's financial first half, falling 19% from 70.80p per share a year prior.
Return per share was negative 6.7p in the recent half, down from positive 0.6p a year before.
Chair Martin Knight said: "For some time, two things have been clear: the company's investment manager has been and remains unenthusiastic about the investment opportunities available to it under the current VCT rules; and, as previous realisation proceeds have been paid out to shareholders in special dividends on top of the regular 5p annual dividends, the size of the company has reduced to a level that is becoming increasingly difficult to justify as an independent publicly quoted entity."
Following this, Chrysalis VCT has decided to undertake an orderly wind up of the company using the VCT winding up regulations.
"These relax the usual restrictions on Chrysalis VCT investing; this relaxation which may assist in recovering value from the investments," the company said.
Chrysalis VCT said that this involves putting the company into members' voluntary liquidation with cash proceeds from realisations being distributed to shareholders as they occur.
"In this way, as distributions are made, each shareholder will be able to decide where and how to invest the proceeds to suit their own interests, whether in the VCT universe or outside it," the company said.
In the recent half-year, Chrysalis's three restaurant and catering businesses were affected most by Covid-19.
Locale Enterprises Ltd, the operator of a chain of Italian restaurants in London, was reduced in value by GBP791,000. Life's Kitchen Ltd, a provider of event management and catering services in the City of London, was reduced by GBP200,000. K10 London Ltd, the operator of a chain of Japanese restaurants also in the City of London, has been fully provided against from a previous valuation of GBP1.1 million, the company said.
Chrysalis VCT said: "Despite these negative developments, there was some positive news in the case of Enthuse Holdings Ltd. The company made a successful acquisition last year, which has been the basis for an uplift in valuation of GBP711,000."
The company said it will pay out an interim dividend of 1.75 pence per share
Going forward, Knight said that the company's investment manager is providing support to the businesses affected most by Covid-19 as a means to preserve value for shareholders.
He added: "Some of the company's larger investments have been less exposed to the direct impact of the pandemic and have reasonable prospects of delivering successful outcomes in an orderly realisation of the portfolio."
Chrysalis VCT shares were untraded on Friday morning in London, quoted at 42.50 pence.
By Greg Roxburgh; gregroxburgh@alliancenews.com
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