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Investment Trust Times: October 20-26

Troubles in property, both past and present, are a common theme this week; debt recovery and proposed wind-ups are on the table with several companies

Jackie Beard, FCSI, 27 October, 2010 | 11:22AM
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Following the EGM for AcenciA Debt Strategies (ACD) at which shareholders approved a new Articles of Association and disapplication of pre-emption rights, the company is now eligible for inclusion in the FTSE Actuaries Indices.

Black Sea Property (BKSA) has recovered 80 units at the Nikea Park development in Bulgaria. The company had loaned money to the developer some years back but the developer defaulted, so it took legal action to recover its property. Bulgarian law required that the units on which the loan was secured be sold. The company will receive net proceeds of EUR 340,000 after VAT and legal costs, with further units to be sold.

BlackRock Hedge SE Cash (BHCF) has received a written request from Barclays Wealth Multi-Manager to offer a cash exit for its shares; this is permitted under the company’s Articles of Association. Barclays holds 3,237,154 shares, which is 97.88% of the total shares in issue. Shares are due to be redeemed today (October 27) at NAV less associated costs.

British Smaller Companies Technology VCT 2 (BST) has changed its name to British Smaller Companies VCT 2. The directors believe this is a more accurate reflection of the company’s investments and its shift since 2004 to include later-stage development companies in its portfolio to meet both income and growth requirements for shareholders. This resolution was passed at the general meeting held on October 18, 2010.

Following the latest conversion opportunity for shareholders in Carador Income Fund (CIF), 122,538 euro-denominated shares will be converted into US dollar-denominated shares. In addition, it has now invested around 91% of the net proceeds raised in the recent placing of new US dollar shares.

Shareholders in FRM Credit Alpha GBP (FCAP) are being asked to vote on continuation proposals for the company. Launched in 2007, the company invests in hedge funds of varying credit strategies. The market collapse in 2008 had a significant impact on the company’s ability to meet investors’ expectations on an absolute basis; the discount to NAV has widened to around 21% and both share price and NAV are in negative territory since launch. The proposals aim to improve liquidity, hold sufficient cash to maintain its currency hedging, realise liquidity from some holdings and maintain positions in long short credit funds where conviction is still high. The AGM is to be held on November 24.

The Board of Gartmore Growth Opportunities (GGOR) will declare a special interim dividend, ahead of the proposed merger with Artemis Alpha Trust (ATS). More details will be released in early November and the dividend is likely to be in the region of 27p per share.

The boards of Greenwich Loan Income Fund (GLIF) and Asset Management Investment Company (AMIC) are in discussions regarding the possible acquisition of AMIC by GLIF. The deal is subject to shareholder approval and, if successful, the likely timescale is January 2011.

Hansteen Holdings (HSTN), which invests in industrial property in Europe, has confirmed that 0.56p of its declared 1.4p dividend (per share) is a REIT property income distribution in respect of its tax exempt property rental business. In October 2009 the company converted to a REIT under UK tax legislation. This dividend is payable on November 25 to all shareholders on the register this coming Friday (October 29).

HSBC Infrastructure (HICL) is planning an issue of C shares through a placing, open offer and offer for subscription. The company will be seeking shareholder approval for a disapplication of pre-emption rights at an EGM on November 10 so the C shares can be issued.

Impax Asian Environmental Markets (IAEM) has announced the results of its C share issue, through which the company has raised gross proceeds of £131 million. A total of 131 million C shares are being issued at the issue price today.

NB Private Equity (NBPE) has announced its share buy-back programme, as first detailed at the AGM in early May. The aim of this programme is to return capital to shareholders and any shares bought back will be cancelled.

Off-Plan Fund (OPF) has made progress with its claim on Henry Homes (Wallington) Ltd, to whom it paid a deposit of £1.1 million in relation to 118 properties. Henry Homes (Wallington) Ltd went into insolvent liquidation. The company made a claim to recover this deposit from the insurer, Zurich Insurance. The amount will be repaid in full but this is expected to take a few weeks to process. Once received, the directors will determine the likely timescale to conclude the wind-up of the company.

Shareholders in Princess Private Equity Holding Ltd (PEY) have seen the fund’s discount to NAV widen significantly since the fund’s launch in December 2006. Although not at its peak, the discount still stands at some 33% to NAV. The company has released a statement confirming its commitment to narrowing this discount. It will be refocusing more on direct investments and the resumption of dividend payments; it will be selling some of its funds to achieve these two aims.

German property company Speymill Deutsche Immobilien Company (SDIC) has issued a trading update, with regards to its debt obligations. It continues to defer the amortisation payments on all of its debt packages. On three of these packages, it has paid more than half of the interest due and intends to pay the balance in the following quarter. Interest on the fourth package has been paid in full.

Speymill Macau Property (MCAU) has circulated proposals to shareholders regarding the realisation of all assets held by the company and its subsequent wind-up. In addition, the company is proposing a new Directors Incentive Plan, as they believe the directors have devoted more time to their duties than would normally be expected of a non-executive board. This follows their termination of the investment management agreement with Speymill Property Group Limited, the prior investment manager of the company, in June 2010. We will be reviewing these changes carefully when full details are available.

Director Appointments
Baronsmead VCT 3 (BMD) – Ian Orrock
JPMorgan Overseas (JMO) – Simon Davies

Director Resignations/Retirements
Acuity Environmental VCT (AEV1) – William Elliott
JPMorgan Overseas (JMO) – George Paul
JPMorgan Overseas (JMO) – Richard Barfield
TP70 2008 1 VCT (TPV1) – Michael Sherry

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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