Last checked at 19 Nov 2009 07:00
| 19 November 2009 |
THE OFF-PLAN FUND LIMITED
(the "Company" or "Fund")
Proposed Change of Investing Policy
The Company announces that it has today posted a circular to Members of the Company (the "Circular") detailing a proposal to vary the investing policy of the Fund so as to authorise and permit the Directors to undertake an orderly disposal of the remaining properties, investments and other assets of the Fund, on such terms as the Directors consider to be necessary or desirable, in order to achieve a systematic winding down of the activities of the Fund (the "Orderly Winding Down").
Save where the context requires otherwise, defined terms used in this announcement shall have the same meaning as given in the Articles of Associations of the Fund (the "Articles").
Background to the proposal
In light of recent discussions with a number of significant shareholders and further to the return of capital announced on 26 October 2009, the Directors have resolved, subject to approval of the Members, to commence the Orderly Winding Down.
The Directors of the Fund are of the view that a disposal of the remaining properties, investments and other assets of the Fund in anything other than an orderly manner will significantly reduce the level of potential returns of cash to Members. In effecting the Orderly Winding Down, the Directors will actively consider all offers for the remaining property units on an individual or group basis, in relation to their prevailing Red Book (the standard valuation manual of the Royal Institution of Chartered Surveyors) valuations, in order to seek to maximise the potential return of cash to Members. Whilst the Fund will always seek to achieve the best possible price in the market for its properties, depending on prevailing market conditions there is no certainty that any of the Fund's properties can be sold at their Red Book valuations. In addition, as property is an illiquid asset, the Orderly Winding Down may take some time to be completed and there is a risk that acceptable purchasers may not be found in the immediate term. As announced on 26 October 2009, the Fund will also pursue the recovery of £1.1 million in deposits, which has been guaranteed by Zurich Insurance Company. The Directors will take appropriate professional advice in connection with the return to Members of the net proceeds of the realisations made (taking into account relevant considerations such as the ongoing operating costs of the Fund and its potential liabilities).
In anticipation of the Orderly Winding Down and in order to reduce the termination costs potentially payable by the Fund, Development Capital Management (Jersey) Limited (the "Manager") has agreed with the Fund, subject to the consent of the Jersey Financial Services Commission, that, with effect from the date of approval of the Orderly Winding Down by the Members, the notice period for termination of the management agreement will be reduced from twelve to six months, such notice not to given before 30 June 2010. The Board is actively engaged in discussions with the Fund's advisers to consider appropriate methods by which costs can be minimised during the Orderly Winding Down.
Approval of Members required
The decision by the Directors to propose the Orderly Winding Down constitutes a change in the investing policy of the Fund under the AIM Rules. Consequently, the Fund is required to seek approval from its Members to this change and the adoption of a new investing policy. In addition, Article 8.01 of the Articles provides that the investing policy stated in the Offering Memorandum may be varied or rescinded in whole or in part by way of Ordinary Resolution (being a resolution of the Fund in general meeting or of the holders of any class of shares adopted by a simple majority of the votes cast at that meeting). A revised investing policy, which the Directors believe will allow them to achieve the Orderly Winding Down, is set out in the Circular, which can be found at the Fund's website, www.offplanfund.com.
Extraordinary General Meeting
A notice convening the Extraordinary General Meeting of the Fund to be held on 4 December 2009 at 8th Floor, Union House, Union Street, St. Helier, JE2 3RF at 10.30 a.m. accompanies the Circular, at which an Ordinary Resolution will be proposed pursuant to Article 8.01 of the Articles and Rule 8 of the AIM Rules for Companies to adopt a new investing policy so as to authorise the Orderly Winding Down. To be effective, the Ordinary Resolution must be passed by a simple majority of the votes cast at the Extraordinary General Meeting.
List of Contacts:
Development Capital ManagementRoger HornettAndy Gardiner
020 7355 7600
Merchant John East Securities Limited
(Nominated Adviser)
Bidhi Bhoma/Simon Clements
020 7628 2200