CYS.L Regulatory News (CYS)

19 Jan 2006 11:32

Chrysalis VCT PLC19 January 2006 Chrysalis VCT plc Proposed issue of new shares to raise up to £25 million General Fund to invest in established businesses Unique Fund to generate returns from Art and Antiques businesses Chrysalis VCT plc ("Chrysalis" or "the Company") is proposing to raise £25million in two new share classes to capitalise on the strong turnaround in theCompany's fortunes since its board reorganisation and the appointment of a newmanagement team in April 2004. One share class ("the General Fund") will invest in established unquotedcompanies for the purpose of funding expansion, acquisitions, management buyouts or turn around opportunities. Occasionally it will invest in technology,early stage businesses and AIM stocks. The existing VCT has been doing thissuccessfully for the past two years. The other share class ("the Art & Antiques Fund") will, for the first time in aVCT, offer the opportunity to invest in highly reputable and established art andantiques businesses. More importantly the investments will enjoy the benefit ofthe security of the dealers trading stock and a share of dealing profits. Uniquely in the VCT world Chrysalis has been self-managed since April 2004. Thenew management team, led by Chris Kay and working closely with former BVCAChairman Robert Drummond, have achieved a remarkable turnaround in theperformance of the Company. Since April 2004 the total NAV return includingdividends has been 30.5% showing an annualised Internal Rate of Return of over19%. This outstanding performance has prompted the Company to seek new funds toincrease the size of the existing VCT, to build on its success with further newinvestments and to launch the Art & Antiques Fund. Robert Drummond said: "The excellent performance of Chrysalis over the pasteighteen months and dividends paid of 7.5% of Net Assets in the last year, fullyvindicates our move to self management. I am particularly excited by theopportunities offered by the innovative Art & Antiques Fund. This is an assetclass which we believe will be attractive to many VCT investors. I am alsodelighted to have secured the services of Spencer Ewen as adviser to this fund." Currently Chrysalis' total management, corporate and administrative costs areamongst the lowest in the venture capital industry. Future administration,corporate and management costs are not expected to exceed 2.5%. Chrysalis' audited results for the year ended 31 October 2005 show an increasein net assets of £6.1m before dividends totalling 5p per share for the year. Netassets grew to £26.7m Issue detailsProposed launch date 25 January 2006Issue size £25m across both share classesOffer Closes 5 April 2006Offer Price £1.00Up to 30 pence for each £1.00 invested targeted to be returned in cash on orbefore 5 April 2010 in the Art & Antiques FundUp to 20 pence for each £1.00 invested targeted to be returned in cash on orbefore 5 April 2010 in the General FundIncome dividends will be payable yearlyCapital Dividends will be payable as appropriateMinimum application of £3,000 and thereafter in multiples of £1,000.One application form allows the investor to allocate their investment acrossboth or either of the Funds subject to £1,000 minimum per fund.No minimum subscription for either Share Class so Company can allot sharesimmediatelyExpenses to new funds of the issue will not exceed 5.5%3% initial commission paid to IFAs. Annual trail commission of 0.25% paid over4 years Further details and copies of the Prospectus will be available from:Kreis Consulting Limited, 180 Hope Street, Glasgow, G2 2UE. Telephone: 0141 5641529, Fax: 0141 564 1524 email kcuk@kreisconsulting.com and from launch date maybe downloaded from www.kreisconsulting.com For further information: Robert Drummond, Chairman Richard Eliott Lockhart David Foxman/Claire MellyChrysalis VCT Kreis Consulting Ltd Tavistock Communications07831 091545 0141 564 1523 020 7920 3150 cmelly@tavistock.co.uk NOTES TO EDITORS Chrysalis VCT plc Chrysalis was listed on the London Stock Exchange in April 2001 when it raisedapproximately £20.8 million. In April 2004, following Board changes, Chrysalis'management contract with Classic Fund Management Ltd was terminated and theCompany became self managing. In January 2005 Chrysalis made an offer for thewhole of the issued share capital of three other VCTs for a total of £8.2million, in the first ever VCT merger. Chrysalis is now seeking to raise up to a further £25 million by way of an issueof new D Shares and new E Shares at £1 per share. D Shares (the General Fund) The D Shares will be invested in a general portfolio of qualifying businesses tofund expansion, acquisitions, management buy-outs or turnaround opportunities inthe same way as the existing fund. E Shares (the Art & Antiques Fund) The E Shares will be invested in unquoted reputable fine art and antiquesdealers principally by way of a mixture of shares and secured loan stock. Theloan stock will be secured on the underlying physical stock of these businessesthereby giving the investors in the E Shares greater security than mighttraditionally be the case. To advise on Art & Antiques Fund investments Chrysalis has appointed SpencerEwen, a London-based art consultant, historian and valuer with over 20 years'experience in the Art World. Mr Ewen's clients include wealthy individuals andleading insurers and law firms. Investors who apply for at least 10,000 E Shares will be sent catalogues and beinvited to exhibitions and dealer open days. The team The Company's wholly owned subsidiary, Chrysalis VCT Management Limited, isresponsible for managing funds in excess of £26 million. The team have extensiveindustry backgrounds and venture capital experience. Robert Drummond (Chairman of Chrysalis VCT plc) - formerly of 3i, ManagingDirector of NatWest Ventures Limited, Managing Director of Grosvenor DevelopmentCapital. Currently he is Chairman of Acta SpA (AIM listed) and former Chairmanof the British Venture Capital Association. Robert will have specialresponsibility for the Art & Antiques Fund. Chris Kay (Managing Director of Chrysalis VCT Management Limited) - formerly of3i and Elderstreet Private Equity Limited has the role of Chief InvestmentOfficer focused primarily on current and new investments in all the funds. Robert Wilson (Director of Chrysalis VCT Management Limited) - formerly of 3iand ISIS, is involved in making new investments and the management ofinvestments in the existing fund and will be involved in investing and managinginvestments for the new General Fund. The Art & Antiques Fund will be advised by Spencer Ewen who has worked in theart world since graduating in Art and Art History. Seymour Management(www.seymourmanagement.co.uk), which he founded, is an art adviser and valuerwhose clients include leading insurers and law firms in the UK. In addition to Robert Drummond, the other Chrysalis VCT board directors are: Julie Baddeley - a non-executive director of Greggs plc and Yorkshire BuildingSociety. Formerly a partner of Accenture, Managing Director of Sema Group's UKconsulting group, director of Woolwich plc and a member of the Audit Commission. Peter Harkness - currently a non-executive director of Datamonitor plc andExecutive Chairman of Knight Banner Business Information Limited, he hasconsiderable experience of working with venture capital investors. The Promoters are Kreis Consulting Limited, who specialise in the design,marketing and promotion of Tax effective Investments, including VCTs. EISs, Filmand Property Partnerships to the Intermediary Market. This information is provided by RNS The company news service from the London Stock Exchange