MERI.L Regulatory News (MERI)

The information contained in this announcement is restricted and is not for publication, release or distribution in the United States of America, any member state of the European Economic Area, Canada, Australia, Japan or the Republic of South Africa.

26 March 2020

Merian Chrysalis Investment Company Limited (the "Company")

Statement relating to COVID-19

This is an update due to the market uncertainty relating to COVID-19 (Coronavirus). The Company would like to highlight that against this difficult backdrop its strategy remains unchanged and the Company is well-positioned at this time, in particular:

· The Company has no leverage in place and has a strong balance sheet with approximately £65 million of cash, after allowing for the previously disclosed follow-on investment in Embark Group, which the Company expects to complete later in Q2 2020;

· Less than 5% of the portfolio operates in business sectors most directly exposed to COVID-19, such as travel and leisure;

· The top six positions in the portfolio (Transferwise, Starling Bank, Graphcore, Klarna, The Hut Group and Embark) accounting for ca. 87% of invested NAV, in aggregate continue to trade robustly versus Merian Global Investors (the "Investment Adviser") expectations, helped by the fact they are typically on-line based;

· The majority of portfolio companies are tech-enabled: typically operating on cloud based systems, these dispersed business models are well suited to remote working;

· The portfolio companies typically have no leverage, or have substantial balance sheet liquidity, and are often backed by other well-regarded investors;

· The Investment Adviser has an active management strategy, with Board rights and/ or representation in certain cases, and so is closely engaged with portfolio companies' management and their strategy;

· A number of the Company's holdings contain downside protection and / or liquidity preference structures; and

· The Investment Adviser has activated its own business contingency plans and has seen minimal impact on its ability to transact business as a result.

While there will inevitably be some impact on the business plans of our key positions, the Investment Adviser's current assessment is that this is likely to be relatively modest for this group of companies. All of our investee companies have introduced business continuity programmes that the Investment Adviser considers appropriate for their organisations, as well as initial mitigation strategies.

A number of them have also recently raised capital, including:

· Graphcore - January 2020 raise of $150m, leaving a cash position of $300m;

· Klarna - July 2019 raise of $460m, with a further investment in March 2020; as of December 2019 CET1 ratio was 28.1%;

· Starling Bank - February 2020 raise of £60m, following a total of £205m raised across 2019, including the CIF award;

· The Hut Group - December 2019 raise of £66m of equity, in addition to substantial amounts of balance sheet liquidity; and

· Embark Group - £84.5m raised over 2H 2019, leaving the company in a strong liquidity position.

In addition, Transferwise, Klarna and The Hut Group have proven profit generating capabilities.

Whilst it is early days in terms of the effects of COVID-19, and the full impact on trading of our investee companies is impossible to predict at this time, the Board and the Investment Adviser are closely monitoring the situation and offering support where needed, with a view to ensuring that any impact is mitigated wherever possible.

-ENDS-

LEI: 213800F9SQ753JQHSW24

A copy of this announcement will be available on the Company's website at https://www.merian.com/chrysalis/. Neither the content of the Company's website, nor the content on any website accessible from hyperlinks on its website for any other website, is incorporated into, or forms part of, this announcement nor, unless previously published by means of a recognised information service, should any such content be relied upon in reaching a decision as to whether or not to acquire, continue to hold, or dispose of, securities in the Company.

This announcement may include "forward-looking statements". All statements other than statements of historical facts included in this announcement, including, without limitation, those regarding the Company's financial position, business strategy, plans and objectives of management for future operations (including development plans and objectives relating to the Company's products and services) are forward-looking statements.

Forward-looking statements are subject to risks and uncertainties and accordingly the Company's actual future financial results and operational performance may differ materially from the results and performance expressed in, or implied by, the statements. These factors include but are not limited to those described in the formal Prospectus. These forward-looking statements speak only as at the date of this announcement. The Company expressly disclaims any obligation or undertaking to update or revise any forward-looking statements contained herein to reflect actual results or any change in the assumptions, conditions or circumstances on which any such statements are based unless required to do so by the Financial Services and Markets Act 2000, the Listing Rules or Prospectus Rules of the Financial Conduct Authority or other applicable laws, regulations or rules.

This announcement is for information purposes only and is not an offer to invest. All investments are subject to risk. Past performance is no guarantee of future returns. Prospective investors are advised to seek expert legal, financial, tax and other professional advice before making any investment decision. The value of investments may fluctuate. Results achieved in the past are no guarantee of future results.