10 Feb 2020 12:35
10 February 2020
Hadrian's Wall Secured Investments Limited
Company Update
Further to the announcement on 9 December 2019 the Board of Hadrian's Wall Secured Investments Limited (the "Company") has concluded its strategic review of the options available to the Company. The Board has determined that the Company should be put into managed wind-down with cash returned to shareholders in a timely and efficient manner.
The Board therefore intends to publish a circular to shareholders (the "Circular") within the next few weeks and to convene an extraordinary general meeting at which it will seek approval from shareholders to amend the Company's investment objective and policy and approve any related matters necessary to facilitate a managed wind-down. If approved the Board will then endeavour to realise all of the investments in a manner that achieves a balance between maximising the value received from investments and making timely returns to shareholders. The Board anticipates being able to make an initial distribution to shareholders in the second quarter of 2020.
Portfolio
Shareholders will be aware, from the announcement made by the Company on 17 December 2019, that certain of the Company's loans had their associated IFRS 9 general loss reserves increased. As noted in the NAV announcement released by the Company on 10 February 2020, the Board has increased the IFRS 9 general loss reserves relating to two of these previously identified loans by a total figure of £1.4 million. The Board advises that the borrower identified in the Company's update on 17 December 2019 continues to make progress on its capital raise. The Board is in ongoing discussions with the Investment Adviser and the underlying borrowers, but adverse developments on either of these loans could expose the Company to the risk of material loss.
At present the Board, based upon the outcome of its ongoing strategic review and the advice of Hadrian's Wall Capital Limited, the Company's investment adviser (the "Investment Adviser"), considers that the existing reserves associated with the remainder of the loan portfolio are appropriate.
The Board is also in the process of compiling the Company's interim report and accounts for the six-months to 31 December 2019, and as part of that process the Company's auditor will be engaged to carry out a review of the Interim Report and Accounts.
The longest dated loan in the portfolio matures in late 2023, whereas the weighted average life of the portfolio is 1.9 years. Subject to shareholders approving the managed wind-down, the Board will, in seeking to maximise value from the Company's portfolio, consider asset sales if appropriate terms can be agreed.
Board and management arrangements
The announcement by the Company on 9 December 2020 confirmed Brett Miller's appointment as a non-executive director, since when the Board has agreed that he should take on additional responsibilities of a quasi-executive capacity with effect from 1 January 2020, and as a consequence is working with the Investment Adviser and the Board to help maximise shareholder returns.
Dividends/Return of capital
The Company declared on 7 December 2020 a dividend of 1.5 pence per ordinary share for the final quarter of 2019. Thereafter, and subject to shareholder approval, the Board's intention is to return cash to shareholders in a timely manner. The most efficient means of doing so requires further consideration and will be commented on in the Circular. Such returns may comprise dividends, capital distributions and share buy backs or any combination of these.
Change of name
Subject to shareholder approval for the managed wind-down the Board intends to seek shareholder approval to change the name of the Company to HWSI Realisation Fund Limited.
LEI: 213800ABN7VKMVNOLG14
Contact Details
David Warr (Chairman)
Telephone 01481 737600
Brett Miller (Director)
Telephone 07770447338
Winterflood Investment Trusts (Corporate Broker)
Joe Winkley / Neil Morgan
Telephone 020 3100 0000
Forward-looking statements
This announcement may contain forward-looking statements with respect to the Company's future financial performance and position. Such statements are based on current expectations, estimates and projections of the Company and information currently available to the Company. The Company cautions readers that such statements involve certain risks and uncertainties that are difficult to predict and therefore it should be understood that many factors can cause actual performance and position to differ materially from these statements. The Company accepts no obligation to update the statements contained in this press release, unless required by law.