19 Apr 2018 12:30
Legal Entity Identifier: 2138006S6U2X7L4R8V74
19 April 2018
Update re Realisation Opportunity
Terra Capital PLC (the "Company")
In January 2015, as part of the recommended restructuring proposals, shareholders in the Company ("Shareholders") approved proposals whereby the board of the Company (the "Board") was released from the obligation to propose a continuation vote in 2017. Instead, Shareholders approved a proposal whereby in June 2018 they would be offered an opportunity to realise all or part of their investment in the Company at a price equal to the then prevailing net asset value (less costs associated with the opportunity) (the "Realisation Opportunity"). Additionally, it was envisaged that if the number of Shareholders who availed themselves of the Realisation Opportunity was such that the Company was no longer a viable proposition the Realisation Opportunity would be abandoned and the Company would be placed into voluntary liquidation.
The Board has consulted with the Shareholders who between them hold in excess of 60 per cent. of the issued share capital of the Company. It has become clear to the Board that such Shareholders would accept the Realisation Opportunity and as such the Company would no longer be a viable proposition.
In the light of the above consultations the Board has determined, subject to the formal approval of Shareholders to be given in General Meeting, to dispense with the Realisation Opportunity, and instead cease all new investments and seek to realise, in an orderly fashion, the Company's portfolio of investments and return the net proceeds generated to Shareholders as soon as is practicable. The Board, having consulted with its advisers, believe an orderly realisation of the portfolio of investments is preferable to an immediate liquidation as it is likely to achieve greater returns to Shareholders.
The proposal outlined above constitutes a change to the investment policy of the Company and as such is subject to approval by Shareholders. Accordingly, a circular (the "Circular") containing details of the proposed change of investment policy will be sent to Shareholders in the near future and will also contain a notice of General Meeting (the "General Meeting") at which Shareholders will be asked to approve the proposed change of investment policy.
The Circular will also contain details of the manner in which the Company proposes to return the net proceeds of the sale of investments to Shareholders. Furthermore, the Company is consulting with its advisers (and Shareholders) as to whether it is necessary or desirable for the Company to maintain its AIM quotation pending the realisation of its investments. If it is determined to cancel the AIM quotation an appropriate resolution will also be proposed at the General Meeting.
For more information, please visit www.terracapitalplc.com or contact:
Galileo Fund Services Limited (Administrator)
Frazer Pickering
+44 1624 692600
Panmure Gordon (UK) Limited (Nominated adviser and corporate broker)
Paul Fincham or Jonathan Becher
+44 20 7886 2500
Terra Capital plc.
Ian Dungate, Director
+44 1624 692600
NOTES:
Terra Capital plc is an AIM quoted investment company focussed on generating high absolute returns while attempting to keep volatility to a minimum. The Fund predominantly invests in under-researched and under-valued companies listed on Frontier Market stock exchanges. The Fund Manager targets for investment companies that it believes are trading for less than their intrinsic worth and so, aside from any potential growth prospects, provide scope for capital appreciation as a result of a reversion towards their underlying value. Investments are also made in companies which are viewed as trading at fair value but which offer opportunities for growth at a reasonable price. The Investment Manager believes many such 'value' opportunities can be found in Frontier Markets due to inherent market inefficiencies in such markets. The Manager utilises in-house teams of its own analysts, resident on the ground in areas of interest to investigate suitable opportunities rather than rely on third party research.