30 Oct 2015 15:00
30 October 2015
Vinaland Limited
Notice of Extraordinary General Meeting (EGM)
Vinaland Limited (the "Company" or "VNL"), announces that its EGM will be held on Tuesday 24 November 2015 at Trafalgar Room 2, Institute of Directors, 16, Pall Mall, London, SW1Y 5ED and will commence at 11:30 a.m. (local time) to consider proposals in relation to the future of the Company.
1. Introduction
At the Company's extraordinary general meeting held on 21 November 2012, Shareholders approved the adoption of proposals to amend the investing policy of the Company. Under these new arrangements for a period of up to three years following the extraordinary general meeting the Company would make no new investments and would adopt a realisation strategy whereby the Company's existing property portfolio of assets would be developed (where necessary) and/or divested in a controlled, orderly and timely manner. During this three year period the net proceeds of all portfolio realisations would be returned to Shareholders, at the Board's discretion, having regard to working capital requirements and the cost and tax efficiency of individual transactions and/or distributions. The Company also undertook that Shareholders would be provided with an opportunity to reassess the investing policy and distribution policy at the end of this three year period. This three year realisation period expires on the 22 November 2015.
Further to the Company's update presentation to investors on 15 October 2015 (and subsequent update presentation dated 29 October 2015 available for viewing on the Company's webpage www.vnl-fund.com, and following consultation with the Company's Investment Manager, corporate advisers and major shareholders, the Board is now putting forward the Proposals (more particularly described in paragraphs 2 and 3 below) to implement a proposed modification and limited extension of the Company's realisation strategy for a further period of up to twelve months.
The purpose of this EGM is to vote upon the Resolutions necessary to implement the Proposals that are being put to Shareholders. The EGM will be held following the Company's annual general meeting for 2015.
2. The Continuation Resolution
The Continuation Resolution, which will be proposed as a special resolution, will be proposed at the EGM. In the event that the Continuation Resolution is passed, as the Company's current investment objective and investing policy has a fixed three year tenure, the Board will seek to formulate alternative proposals in relation to the future direction of the Company to be presented to Shareholders. If the Continuation Resolution is passed, the Reorganisation Resolution (details of which are set out at paragraph 3 below) will not be put to Shareholders at the EGM.
Following the process of consultation noted above, the Board does not believe that continuation of the Company as presently constituted is in Shareholders' best interests and is recommending that Shareholders vote AGAINST the continuation of the Company. If, as the Board recommends, the Continuation Resolution is not passed at the EGM, Shareholders will then have the opportunity to vote on the Reorganisation Resolution.
3. The Reorganisation
In the event that the Continuation Resolution is not passed, the Board proposes a limited extension of the Company's current realisation and distribution strategy together with amendments to the remuneration structure of the Investment Manager. The Reorganisation is conditional upon the approval of the Reorganisation Resolution at the EGM.
The Reorganisation comprises the following elements:
3.1 Investing policy and distribution policy
For a period of no more than twelve months from the Effective Date (the "Extension Period"), the Company will make no new investments (save that it may invest in, or advance additional funds to, existing projects within the Company's property portfolio to maximise value and assist in their eventual realisation). The Company will maintain a realisation strategy whereby the Company's existing property portfolio of assets will be developed (where necessary) and/or divested in a controlled, orderly and timely manner. Further details of the Company's proposed investing policy are set out in Part 2 of the circular to shareholders dated 30 October 2015 detailing in full the shareholder proposals and notice of EGM (the "Circular"). Board approval will be required for all divestments of property assets to be made by the Company.
The principal purpose of the Extension Period will be to enable the Company to complete Contracted Disposals and the distribution of Distributable Proceeds arising therefrom. In addition, to the completion of Contracted Disposals, the Investment Manager will seek to divest additional property assets approved by the Board.
During the Extension Period the Distributable Proceeds arising from all portfolio realisations will be returned to Shareholders, at the Board's discretion, having regard to requirements to invest further funds in existing projects within the Company's property portfolio to enhance or preserve exit values; the Company's working capital requirements (including the fees payable under the Second Amended and Restated Investment Management Agreement) and the cost and tax efficiency of individual transactions and/or distributions.
Shareholders will be provided with an opportunity to reassess the investing policy and distribution policy at the end of the Extension Period. To that end, a further special resolution for the Company's continuation will be proposed at an extraordinary general meeting to be convened no later than 22 November 2016. However, if prior to 22 November 2016, the Company has made distributions to Shareholders, since 21 November 2012, of in aggregate US$125 million, the Company will bring forward the date of such extraordinary general meeting (the "Early Continuation EGM").
3.2 Investment Manager's remuneration
The Company and the Investment Manager have, conditionally upon the approval of the Reorganisation Resolution at the EGM, entered into the Second Amended and Restated Investment Management Agreement which will replace the Current IMA with effect from the Effective Date. The Second Amended and Restated Investment Management Agreement is in materially similar form to the Current IMA save for the treatment of the fees payable to the Investment Manager.
Management fees
The management fee will be reduced to US$390,000 per month (currently US$6.5 million per annum).
Realisation fees where definitive agreements entered into on or before 21 November 2015 ("Contracted Disposals")
The Second Amended and Restated Investment Management Agreement maintains, and does not amend, the current position in relation to payment by the Company to the Investment Manager of the currently accrued but unpaid performance fees, which total approximately US$28.2 million.
Disposal fees where definitive agreements entered into after 21 November 2015
In order to provide a continued incentive for the Investment Manager to pursue asset disposals between the Effective Date and the Long Stop Date, in relation to any further assets where the Company enters into a definitive sale agreement between 21 November 2015 and 21 November 2016, the Manager shall be entitled to receive a disposal fee equal to 2.8 per cent. of the Distributable Proceeds arising from such realisations. Unlike the Realisation Fees, any such amounts will not be subject to the reinvestment provisions which apply to Realisation Fees.
Further details of the Second Amended and Restated Investment Management Agreement are set out in Part 2 of the Circular.
The Board, having consulted with the Nominated Adviser, believes the entry into of the Second Amended and Restated Investment Management Agreement is fair and reasonable insofar as the Shareholders are concerned.
The Company will shortly send a circular and form of proxy to shareholders detailing the resolution that will be put to shareholders for their approval at the EGM. Both documents will also be posted on the Company's website at www.vnl-fund.com
The Circular contains notice of the EGM of the Company to be convened in connection with the two resolutions being the Continuation Resolution and the Reorganisation.
The Board unanimously recommends that Shareholders vote against The Continuation Resolution and for the Reorganisation at the EGM.
Terms have the same meaning as defined in the Circular.
Enquiries:
Jonathon Trewavas
VinaCapital Investment Management Limited
Investor Relations/Communications
+84 8 3821 9930
jonathon.trewavas@vinacapital.com
Philip Secrett
Grant Thornton UK LLP, Nominated Adviser
+44 (0)20 7383 5100
philip.j.secrett@uk.gt.com
Hiroshi Funaki / William Marle
Edmond de Rothschild Securities, Broker
+44 (0)20 7845 5960
funds@lcfr.co.uk
David Benda / Hugh JonathanNumis Securities Limited, Broker
+44 (0)20 7260 1000
funds@numis.com
Andrew Walton
FTI Consulting, Public Relations (London)
+44 (0)20 7269 7204
andrew.walton@fticonsulting.com