30 Nov 2016 12:02
Carador Income Fund plc
30 November 2016
Redemption Arrangements
Redemption Arrangements
In accordance with the current provisions of the Articles of Association (the "Articles") of Carador Income Fund plc (the "Company") shareholders may, at the Directors' discretion, be offered a redemption opportunity in 2017 for up to 100 per cent of the shares in issue if the shares have traded at an average discount to net asset value in excess of 5 per cent over the 12 month period prior to 30 April 2017 ("discount trigger realisation mechanism"). In the event that the discount trigger realisation mechanism is not activated, the Directors may at their discretion propose an ordinary resolution to shareholders at the annual general meeting ("AGM") in 2017 to approve a redemption opportunity for up to 100 per cent of the shares in issue (in each case the "2017 Redemption Opportunity").
It is intended that after 2017 the Directors will, every five years, consider at their discretion whether or not to offer redemption opportunities to shareholders on the same basis.
Additional Arrangements
The Directors have determined that they would like to consider whether or not to offer Shareholders potential redemption opportunities on a more frequent basis. Accordingly, whilst the discount trigger realisation mechanism described above will occur every five years, the Directors intend to consider every two and a half years whether to put an ordinary resolution to shareholders to approve a redemption opportunity for up to 100 per cent of the shares in issue, subject to any necessary changes to the Articles being approved. Any such redemption opportunities would be made available at the Directors' discretion and would be implemented through the creation of a Repurchase Pool in the same manner described below.
In the run up to April 2017 the Directors will continue to monitor the Company's share price relative to its net asset value and any decision whether to provide shareholders with the 2017 Redemption Opportunity will be made at that time.
Redemption Mechanics
If a redemption opportunity is offered to shareholders, the Directors would allocate to a repurchase pool (the "Repurchase Pool") assets of the Company with an aggregate value (as at the NAV calculation date immediately preceding the establishment of the Repurchase Pool) equal to the NAV (as at the same date) attributable to the shares to be repurchased. As the general pool of assets comprising the Company is likely to consist of cash as well as investments in CLOs, the assets allocated to the Repurchase Pool would include a cash element as well as a share of the non-cash assets held.
Shareholders participating in any redemption opportunity ("Exiting Shareholders") would have their shares redesignated as shares in the Repurchase Pool ("Repurchase Pool Shares") which, subject to the then existing regulations, are anticipated to be admitted to listing on the Official List of the UK Listing Authority ("UKLA") and to trading on the Main Market of the London Stock Exchange. Repurchase Pool Shares would carry full voting rights. The Repurchase Pool Shares will then be compulsorily repurchased in tranches as the assets comprised in the Repurchase Pool are realised and such realisation proceeds thereby returned to the holders of Repurchase Pool Shares.
Enquiries
Ciara Timon
State Street Fund Services (Ireland) Limited
Company Secretary
Tel: +353 1 776 8419