NOT FOR RELEASE, PUBLICATION OR
DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART IN, INTO
OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A
VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH
JURISDICTION
THIS ANNOUNCEMENT CONTAINS INSIDE
INFORMATION.
FOR IMMEDIATE RELEASE
14 March 2024
GCP Asset
Backed Income Fund Limited
("GABI"
or the "Company")
LEI:
213800FBBZCQMP73A815
Strategic
Review Update
On 13 December 2023, the Company
announced that its board (the "Board") would be commencing a strategic
review to consider how it may best deliver value to
shareholders (the "Strategic
Review"). Following a further announcement on 29 January
2024, the Board has engaged extensively with shareholders in
seeking feedback to inform its decision-making process.
As part of this process, the Board
has specifically sought shareholders' views in respect of i) the
potential continuation of the Company in its present form in
accordance with its current investment policy delivered by Gravis
Capital Management Ltd, the Company's investment manager (the
"Investment Manager"),
paired with a partial capital return ("Continuation"), ii) a wind-down of the
Company with an orderly realisation of its assets (the
"Orderly Realisation") and
iii) a potential sale of the entire issued share capital of the
Company and/or its assets (a "Potential Sale").
Feedback on the future strategic
direction of GABI has been provided to the Board by shareholders
representing a majority of the total voting rights in the Company.
Whilst differing views have been expressed by
shareholders on the future of the Company, a majority indicated a
preference for an Orderly Realisation or a Potential Sale. Further,
whilst a minority of shareholders indicated a preference for
Continuation, the Board believes that the likely scale and take-up
of returns of capital that would be necessary to provide an exit
for shareholders would be substantial and that, as a result, the
Company would no longer be of a viable size to provide sufficient
liquidity and scale.
Alongside shareholder feedback, the
Board has also considered the prevailing and persistent discount to
net asset value at which the Company's shares have traded over the
course of the past 18 months, the liquidity of trading in its
shares, and the limited prospects for achieving greater scale in
the foreseeable future and wider market conditions.
Accordingly, the Board has reached
the conclusion that shareholder value will be best served by a
proposed orderly realisation and return of capital.
Orderly Realisation and Return of
Capital
Shareholders will be given the
opportunity to vote on a discontinuation of the Company at the
Company's annual general meeting on 15 May 2024
(the "2024 AGM"),
which will be presented as an ordinary resolution requiring a
majority of those voting to vote in favour of discontinuation in
order for the resolution to pass. The Board intends to recommend
that shareholders vote for discontinuation of the Company in its
present form.
In addition, and subject to the prior approval of the Financial Conduct
Authority, the Board intends to convene an extraordinary general
meeting (the "2024 EGM") to
be held immediately after the 2024 AGM at which it will seek
approval from shareholders to i) amend the Company's
investment objective and policy to contemplate the Orderly
Realisation, ii) adopt new articles of association and iii) approve
any related matters necessary to facilitate the Orderly Realisation
(together, the "Proposals").
The Orderly Realisation will not
result in a liquidation of the Company in the immediate future and
the Board will seek to implement the Orderly Realisation in a
manner that maximises value to shareholders.
The Company currently has a cash
balance of circa. £55 million. It is the Board's expectation that,
subject to the adoption of the Proposals and receipt of anticipated
cashflows, the Company will make an initial capital distribution of
at least this amount as soon as reasonably practicable following
the conclusion of the 2024 EGM. In addition, the Board will seek to
expedite regular capital distributions when practicable thereafter.
It is currently envisaged that adoption of the Proposals will
enable the Company to return capital to shareholders by way of a
compulsory partial redemption of shares pro rata to their
shareholding in the Company at the appropriate time.
Should the Proposals be approved by
shareholders, it is the Board's current intention to maintain the
Company's existing level of dividend of 6.325 pence per annum
whilst the Company remains substantially invested, for as long as
practicable. This is a target only and does not constitute a profit
forecast.
Further, subject to the adoption of
the Proposals, in order to reduce costs to a more appropriate level
for the duration of the Orderly Realisation, with effect from 30
June 2024 the Company will publish half-yearly (rather than
quarterly) NAV updates. It is intended that the Company's listing
will be maintained during the Orderly
Realisation process for as long as practicable and cost-effective
to do so.
The Company intends to publish a
circular in late April 2024 in connection with the Proposals and
incorporating a notice convening the 2024 EGM (the "Orderly Realisation Circular").
Update on a Potential
Sale
The Board will explore all avenues
for optimising shareholder value. Parties interested in a Potential
Sale should contact Barclays using the contact details given
below.
Investment management
arrangements
It is the Board's current intention
that the Investment Manager be retained to provide investment
management services in connection with the Orderly Realisation. The
Board considers the Investment Manager to be best placed to provide
such services taking into account its knowledge and experience of
the Company's investment portfolio.
To this effect, the Board has
commenced discussions with the Investment Manager in respect of
proposals for the provision of investment management services
during the Orderly Realisation under revised terms that seek to
incentivise the Investment Manager to achieve the objective of
maximising shareholder returns in a timely manner.
In due course the Investment Manager
will engage with shareholders to present its plan for the Orderly
Realisation.
Further information will be set out
in the Orderly Realisation Circular.
Directorate changes
In light of the outcome of the
Strategic Review, Joanna Dentskevich and Colin Huelin do not intend
to seek reappointment as non-executive Directors of the Company at
the 2024 AGM.
The Board will be seeking to appoint
a new non-executive Director at the 2024 AGM. In seeking the
appointment of a new non-executive Director, the Board will have
due regard for corporate governance best practice through an
independent process, taking into account relevant experience, Board
diversity and the regulatory requirements applicable to the
Company.
The appointment of the new Director
will be subject to the approval of the Jersey Financial Services
Commission and shareholder approval at the 2024 AGM. Subject to
such approvals, following the completion of the 2024 AGM, the Board
will comprise three non-executive Directors.
The Board will review the
composition of its committees ahead of the 2024 AGM and make
appropriate changes as required.
Further information will be included
in the Orderly Realisation Circular.
Alex Ohlsson, Chairman of GABI,
commented:
"The Board thanks shareholders for
the constructive feedback provided as part of the shareholder
engagement process. The extensive feedback has been invaluable in
informing the Board's decision-making process and in formulating
proposals for an orderly wind-down of the Company."
This announcement contains inside
information for the purposes of Article 7 of Regulation (EU) No
596/2014, as it forms part of domestic law by virtue of the
European Union (Withdrawal) Act 2018 (as amended) ("MAR"). Upon
publication of this announcement, the inside information is now
considered to be in the public domain for the purposes of
MAR. The
person responsible for arranging the release of this announcement
on behalf of the Company is Sophie Botterill, Manager at Apex
Financial Services (Alternative Funds) Limited.
For further information:
GCP Asset Backed Income Fund Limited
| +44 (0)15 3482 2251
Alex Ohlsson, Chairman
Barclays Bank PLC, acting through
its Investment Bank (Financial Adviser and Corporate Broker) | +44
(0)20 7623 2323
Adrian Beidas
Callum West
Dion Di Miceli (Corporate
Broking)
Stuart Muress (Corporate
Broking)
Buchanan/Quill |
+44 (0)20 7466
5000
Helen Tarbet
Sarah Gibbons-Cook
Henry Wilson
About GABI
GABI is a closed-ended investment
company traded on the Main Market of the LSE. The company makes
investments secured against physical assets or contracted cash
flows, in sectors which are integral to society.
Important notices
This announcement is not intended
to, and does not, constitute or form part of any offer, invitation
or solicitation of any offer to purchase, otherwise acquire,
subscribe for, sell or otherwise dispose of, any securities or the
solicitation of any vote or approval in any jurisdiction, whether
pursuant to this announcement or otherwise.
The release, distribution or
publication of this announcement in jurisdictions outside the
United Kingdom may be restricted by laws of the relevant
jurisdictions and therefore persons into whose possession this
announcement comes should inform themselves about, and observe, any
such restrictions. Any failure to comply with the restrictions may
constitute a violation of the securities law of any such
jurisdiction.
Disclaimer
Barclays Bank PLC, acting through
its Investment Bank ("Barclays"), which is authorised by the
Prudential Regulation Authority and regulated in the United Kingdom
by the Financial Conduct Authority and the Prudential Regulation
Authority, is acting exclusively for the Company and no one else in
connection with the matters set out in this announcement and will
not be responsible to anyone other than the Company for providing
the protections afforded to clients of Barclays nor for providing
advice in relation to any matter referred to in this
announcement.
In accordance with the
UK City Code on
Takeovers and Mergers (the "Code"), normal United
Kingdom market practice and Rule 14e-5(b) of the Exchange Act,
Barclays and its affiliates will continue to act as exempt
principal trader in the Company's securities on the London Stock
Exchange. These purchases and activities by exempt principal
traders which are required to be made public in the United Kingdom
pursuant to the Code will be reported to a Regulatory Information
Service and will be available on the London Stock Exchange website
at www.londonstockexchange.com. This information will also be
publicly disclosed in the United States to the extent that such
information is made public in the United
Kingdom.
Disclosure requirements of the
Code
Under Rule 8.3(a) of the Code, any
person who is interested in 1% or more of any class of relevant
securities of an offeree company or of any securities exchange
offeror (being any offeror other than an offeror in respect of
which it has been announced that its offer is, or is likely to be,
solely in cash) must make an Opening Position Disclosure following
the commencement of the offer period and, if later, following the
announcement in which any securities exchange offeror is first
identified. An Opening Position Disclosure must contain details of
the person's interests and short positions in, and rights to
subscribe for, any relevant securities of each of (i) the offeree
company and (ii) any securities exchange offeror(s). An Opening
Position Disclosure by a person to whom Rule 8.3(a) applies must be
made by no later than 3.30 pm (London time) on the 10th business
day following the commencement of the offer period and, if
appropriate, by no later than 3.30 pm (London time) on the 10th
business day following the announcement in which any securities
exchange offeror is first identified. Relevant persons who deal in
the relevant securities of the offeree company or of a securities
exchange offeror prior to the deadline for making an Opening
Position Disclosure must instead make a Dealing
Disclosure.
Under Rule 8.3(b) of the Code, any
person who is, or becomes, interested in 1% or more of any class of
relevant securities of the offeree company or of any securities
exchange offeror must make a Dealing Disclosure if the person deals
in any relevant securities of the offeree company or of any
securities exchange offeror. A Dealing Disclosure must contain
details of the dealing concerned and of the person's interests and
short positions in, and rights to subscribe for, any relevant
securities of each of (i) the offeree company and (ii) any
securities exchange offeror(s), save to the extent that these
details have previously been disclosed under Rule 8. A Dealing
Disclosure by a person to whom Rule 8.3(b) applies must be made by
no later than 3.30 pm (London time) on the business day following
the date of the relevant dealing.
If two or more persons act together
pursuant to an agreement or understanding, whether formal or
informal, to acquire or control an interest in relevant securities
of an offeree company or a securities exchange offeror, they will
be deemed to be a single person for the purpose of Rule
8.3.
Opening Position Disclosures must
also be made by the offeree company and by any offeror and Dealing
Disclosures must also be made by the offeree company, by any
offeror and by any persons acting in concert with any of them (see
Rules 8.1, 8.2 and 8.4)
Details of the offeree and offeror
companies in respect of whose relevant securities Opening Position
Disclosures and Dealing Disclosures must be made can be found in
the Disclosure Table on the Takeover Panel's website at
www.thetakeoverpanel.org.uk, including details of the number of
relevant securities in issue, when the offer period commenced and
when any offeror was first identified. You should contact the
Panel's Market Surveillance Unit on +44 (0)20 7638 0129 if you are
in any doubt as to whether you are required to make an Opening
Position Disclosure or a Dealing Disclosure.
Rule 26.1 disclosure
In accordance with Rule 26.1 of the
Code, a copy of this announcement will be available (subject to
certain restrictions relating to persons resident in restricted
jurisdictions)
at https://www.graviscapital.com/funds/gabi-strategic-review/literature
by no later than 12 noon (London time) on the business day
following the date of this announcement. The content of the website
referred to in this announcement is not incorporated into and does
not form part of this announcement.