(Alliance News) - Pollen Street Secured Lending PLC on Thursday said it has now formally appointed a replacement investment manager and signed a termination agreement with PSC Credit Holdings LLP.
In March, Pollen Street Secured Lending had said it was mulling legal action against PSC Credit, accusing it of deliberately withholding information needed for proper due diligence to be carried out by potential buyer Waterfall Asset Management LLC.
This possible acquisition is ongoing, and Pollen Street Secured Lending noted on September 8 that the UK takeovers panel had approved a deadline extension for Waterfall to either make an offer for the company or walk away.
Pollen Street Secured Lending has now formalised its appointment of Waterfall as its replacement investment manager, having already announced an interim advisory agreement in August.
The firm has also signed an investment management agreement with its new alternative investment fund manager, Mirabella Financial Services LLP, and with Waterfall as new delegated portfolio manager effective from October 1.
Mirabella and Waterfall have confirmed they are ready to assume their roles as alternative investment fund manager and delegated portfolio manager after a period of preparatory work.
Waterfall is to: "Receive a monthly fee in arrears equal to 1/12th of 0.75% of net asset value, less an amount equal to the AIFM fee payable to Mirabella for the same period, which taken together with the performance fee change, represents a significant reduction compared to the previous management fee arrangements."
Waterfall is also entitled to a performance fee of 10% of distributions made by Pollen Street Secured Lending in excess of 105% of most recently published NAV before the agreement date. Further, for the starting August 14, 2020, and ending March 31, 2021, fees payable to Waterfall and Mirabella have a GBP2.0 million cap.
Pollen Street Secured Lending has entered into a termination agreement with PSC Credit and will pay it a sum of approximately the balance of the unpaid base management fee, including the unexpired notice period.
"The board believes that Waterfall's appointment materially increases the likelihood that a firm all cash offer will be brought to the table for shareholders to consider. As previously stated, if a recommendable offer is not forthcoming the board is likely to recommend to shareholders that the company pursues an orderly run-off with capital to be returned to shareholders in as timely a manner as possible during the process. Any change to the company's investment policy will be conditional upon the approval of shareholders. Further announcements will be made in due course," said Pollen Street Secured Lending.
Shares in Pollen Street Secured Lending were up 0.2% at 846.00 pence in London on Thursday morning.
PSC Credit on Thursday said it was "pleased to confirm it has reached agreement with the board of Pollen Street Secured Lending for the early termination of the investment management agreement in place between the two entities."
By Anna Farley; annafarley@alliancenews.com
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