Amended Notice of EGM

29 Jul 2005 16:01

Matrix Venture Fund VCT PLC29 July 2005 Matrix Venture Fund VCT plc (the "Company" or "Fund") Amended Notice of Extraordinary General Meeting ("EGM") Change of EGM date to 7 September 2005 A circular is being sent to shareholders requisitioning an EGM to be held at theoffices of Matrix Group Limited, One Jermyn Street, London SW1Y 4UH at 10.30 amon 7 September 2005. Please note that the Company announced on 8 July 2005 thatthe EGM was to be held on 11 August 2005, but this has now been changed. The purpose of the EGM is to approve resolutions to change the name of thecompany to Matrix Income & Growth 2 VCT plc and to approve related partytransactions in connection with a proposed offer for subscription of C shares. The circular also details changes at the Company's investment manager and abroadening of the investment strategy. Further information on the above is set out below. Contacts: Matrix Venture Fund VCT plc Mark Wignall Tel: 0207 925 3300 Williams de Broe Plc Richard Lindley Tel: 0113 243 1619 Proposed change of name The Directors propose to change the name of the Company to Matrix Income &Growth 2 VCT plc. This name reflects the new investment strategy and places theCompany alongside the existing Matrix Income & Growth VCT plc. Related party transactions The Directors intend to implement the proposals approved by shareholders inMarch 2004 to raise further funds by way of a C share offer for subscription.It is proposed that the capital raised by the issue of C shares will create aseparate fund (the "C Share Fund"). The Directors intend to launch the furtherfundraising this autumn. As part of the arrangements for this proposed C share issue, the Directorsintend to enter into agreements with Matrix-Securities Limited ("Matrix-Securities") and Matrix Private Equity Partners Limited ("MPEP") for theprovision of promotion and investment management services. The investmentmanagement services to be provided by MPEP will replace those currently beingprovided by Matrix Private Equity Limited. These agreements will both beregarded as related party transactions under the Listing Rules. Proposed management and performance incentive arrangements MPEP will be paid a fund management fee of 2% per annum of the value of the netassets of the C Share Fund. In addition, the management fee payable on theordinary share fund will also be reduced at that time to 2% from 2.5%. TheDirectors believe that these arrangements reflect current market conditions andare appropriate to the Company at the present time. As is customary in the private equity industry, MPEP, as investment manager willalso receive a performance related incentive fee, to reward exceptionalperformance, in respect of the management of the C Share Fund. A new carriedinterest agreement will entitle MPEP, from the end of the Company's third annualreporting period, to receive a performance fee of 20% of the excess above 6p perC share of the annual dividends paid to the holders of C shares. After theCompany's third annual reporting period following the launch of the C shareoffer this 6p hurdle will rise in line with the Retail Price Index (All Items).The performance fee will only be payable if the mean net asset value per C shareover the year relating to payment has remained at or above 100p. The performancefee will be payable annually, with any cumulative shortfalls below the 6p pershare hurdle having to be made up in later years. No changes are proposed to theperformance related incentive fee in respect of the ordinary share fund. Proposed arrangements for the appointment of a promoter As promoter, Matrix-Securities will market the proposed C share offer forsubscription to potential investors and independent financial advisers. Apromoter's agreement will be entered into under which the Company will pay toMatrix-Securities a commission of 5.5% of the gross amount subscribed under theoffer for subscription. Out of this fee Matrix-Securities will pay all costsagreed between the Company and the promoter, including charges and expenses ofor incidental to the offer, including the fees of the sponsor in connection withthe offer and the initial (but not annual trail) commission payable toindependent financial advisers. The agreement will contain a warranty given bythe Directors to Matrix-Securities in relation to the accuracy of theinformation in the prospectus. The Company will also agree to indemnifyMatrix-Securities against specified losses suffered in respect of its role aspromoter. There will be no time limits on these indemnities. Recommendation The Directors consider that the proposals referred to in the circular are in thebest interests of the Company and its shareholders as a whole. The Directors consider the proposed management and performance incentivearrangements for MPEP in respect of the C Share Fund and the arrangements forthe appointment of Matrix-Securities as the promoter in respect of the proposedC share offer for subscription to be fair and reasonable so far as theshareholders of the Company are concerned and have been so advised by Williamsde Broe Plc. Accordingly, the Directors recommend Shareholders to vote in favour of thespecial resolutions to be proposed at the Extraordinary General Meeting, asthey, other than Kenneth Vere Nicoll, intend to do in respect of their ownbeneficial shareholdings totalling 58,794 ordinary shares (representing 0.46% ofthe issued share capital of the Company). Kenneth Vere Nicoll, a Director of the Company, is also a director andshareholder of Matrix Group and will abstain from voting on the resolutions toappoint Matrix-Securities as promoter and MPEP as the investment manager. Hehas also undertaken to take all reasonable steps to ensure that his associatesand any employees or directors of companies in the Matrix Group, includingMatrix Private Equity, MPEP and Matrix-Securities, who hold shares in theCompany, will not vote on these resolutions. This information is provided by RNS The company news service from the London Stock Exchange