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Hazel Renewables 1 and 2

Sophisticated and complex high-risk tax-sensitive investments in small companies: handle with care
timbo003
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Hazel Renewables 1 and 2

#24642

Postby timbo003 » January 20th, 2017, 10:06 am

See links to the old TMF thread and a PDF of the old TMF thread on a shared drive (for when they turn the lights off for the old TMF site):

http://boards.fool.co.uk/hazel-renewabl ... e#13342856
https://drive.google.com/file/d/0B2AtIS ... sp=sharing

There were a couple of RNS announcements from these two VCTs yesterday after the close which were quite remarkable'. I'm not a holder, but I would love to know who is coordinating this shareholder action, it doesn't seem to be anyone within ShareSoc, or anyone who regularly posts on here (or the Motley Fool when it was active):

http://www.investegate.co.uk/hazel-ren- ... 4751H2460/
http://www.investegate.co.uk/hazel-ren- ... 4857H2464/


Hazel Renewable Energy VCT1 plc ("Hazel 1") and Hazel Renewable Energy VCT 2 ("Hazel 2") held General Meetings earlier today to seek shareholder approval for the Companies to continue as Venture Capital Trusts for a further five years.

The resolution in respect of Hazel 1 was passed. The resolution in respect of Hazel 2 was defeated.

parallellines
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Re: Hazel Renewables 1 and 2

#24729

Postby parallellines » January 20th, 2017, 1:33 pm

What a mess.

No-one contacted me with the exception of the formal board communications.

I only invested through the 2014 top up issue so it was a fairly easy decision to vote for continuation. Not happy.

127tolmers
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Re: Hazel Renewables 1 and 2

#24942

Postby 127tolmers » January 21st, 2017, 11:14 am

I bought mine second hand and it has taken a long time to get actual delivery so as to receive communications direct. I had pencilled in going to the extraordinary GM but it was only scheduled for 15 mins and I thought it would be a formality so obviously missed the fun. Apparently these resolutions were voted down at the last AGM.

I agree it is a mess. In the half years they said they were going to get a third party valuation and then have a continuation vote.

http://www.investegate.co.uk/hazel-ren- ... 1038H6789/

I then missed the detail that was hidden in the circular.

http://www.investegate.co.uk/hazel-ren- ... 3912H7476/

http://www.downing.co.uk/sites/default/ ... c_2016.pdf

This is actually well worth a read and also for Ventus shareholders. The valuer valued the portfolio at £49.0m compared to the directors' ongoing valuation of £60.1m. It appears that the refinancing was done over too long a period delaying good dividends to a long way out ie 2033 - 2036.

The next pair of AGMs should be interesting.

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Re: Hazel Renewables 1 and 2

#26708

Postby Converse » January 27th, 2017, 2:45 pm

This situation is quite incredible.

127tolmers
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Re: Hazel Renewables 1 and 2

#49504

Postby 127tolmers » April 28th, 2017, 5:05 pm

http://www.investegate.co.uk/hazel-ren- ... 3410H0489/

http://www.investegate.co.uk/hazel-ren- ... 3546H0492/

The differing outcomes of the shareholder votes has presented a significant challenge to the Board in developing proposals which both maintain Shareholder value and offer a satisfactory way forward for all Shareholders. The Board has so far engaged with a number of parties, including Hazel Capital, the Investment Advisor, who may be able to help to provide a satisfactory solution and work is ongoing with these parties to allow them to produce formal proposals. The Board has also appointed a consultant to assist with this process. It is however clear to the Board that fully developing these plans will take some time.

The Board had hoped to be in a position to call a further Shareholder meeting in mid-May. It now appears that this is an unrealistic deadline and further time will be needed to ensure that a flexible solution can be offered that meets the requirements of and maximises value for all Shareholders.

The Board envisages that it will be in a position to present such proposals to Shareholders by August.

127tolmers
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Re: Hazel Renewables 1 and 2

#63526

Postby 127tolmers » June 28th, 2017, 8:46 pm

http://www.investegate.co.uk/hazel-ren- ... 3556H6391/
http://www.investegate.co.uk/hazel-ren- ... 5621H6390/

Future Strategy
As mentioned above, shareholders of Hazel 2 have voted against the company continuing as a Venture Capital Trust for a further five years. Your Company has a close relationship with Hazel 2 and has co-invested alongside Hazel 2 in all its investments. A wind-up of Hazel 2 could have a significant impact on your Company in that a new investment partner for the investments would need to be found.

With this in mind, your Board has been working closely with the Board of Hazel 2, to identify a solution that is in the best interests of all Shareholders. To this end, the Companies have appointed a consultant to run this process and have engaged with several parties, including Hazel Capital, the Investment Advisor, with the objective of preparing formal proposals seeking to provide all shareholders with an outcome which meets their requirements. The final proposals are expected to provide some Shareholders with an option to exit from their investment while maintaining viable vehicles for those Shareholders that wish to continue holding their investment.

We anticipate that these proposals will be ready to present to Shareholders in the late summer.


As a final comment, Hazel Capital has announced that it has agreed terms for its acquisition by Gresham House plc. This is a very positive development which will strengthen the Hazel Capital team and improve its ability to perform its services. The transaction is expected to complete in the third quarter of 2017.

parallellines
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Re: Hazel Renewables 1 and 2

#88952

Postby parallellines » October 17th, 2017, 7:53 pm

So after a prolonged huddle, we have the proposals :-

https://www.downing.co.uk/sites/default ... _final.pdf

https://www.downing.co.uk/sites/default ... t_2017.pdf

"New" investment manager for both companies and a fee reduction I guess in the hope of buying off the majority in favout of liquidating Hazel 2.

I'm glad that I found the old thread, as I didn't immediately see anything in the proposals to highlight that Hazel Capital and Gresham House are connected enterprises. Will be interesting to see. As someone who invested in Hazel 2 late, in 2014, it's a pretty easy decision to vote for continuation.

127tolmers
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Re: Hazel Renewables 1 and 2

#93915

Postby 127tolmers » November 7th, 2017, 4:59 pm

https://www.investegate.co.uk/hazel-ren-egy-vct2--hr2o-/gnw/hazel-renewable-energy-vct-2-plc---result-of-me---/20171107164006H7865/

I went to the General Meeting today and was the only non board shareholder present!

Both Hazel Boards were there plus Hazel Capital which has now been taken over by Gresham House and 3 people from Gresham House plus Grant Whitehead from Downing as Company Sec and their proposed new board member, Giles Clark

So I got to quiz them all on my own for 45 minutes.

https://www.investegate.co.uk/hazel-ren ... 0017H2164/

https://www.downing.co.uk/sites/default ... _final.pdf

The problem arose when VCT1 voted to continue and its mirror image VCT2 voted to wind up. Apparently the dissenting shareholders had a loss of trust, thought the assets were undervalued and were upset by the failure to call a timely continuation vote.

The boards decided to work together to find a solution which included putting the investment advisor contract up for bid. Gresham House, having taken over Hazel Capital, won the bid although they were not the low bidder and had no previous VCT experience. The VCTs intend to continue.

Advisors fee have been cut from 2.0% to 1.15% in year 2 onwards. The cost cap has been reduced from 3.5% to 3.0%.
The performance fee remains at 20% on dividends over 5p and 30% on dividends over 10p.

They plan to introduce a buyback policy of 2% discount. They have £9m of distributable reserves and access to some cash but don't expect a big shareholder rush to the door.

Directors' fees and Downing fees have been increased somewhat. The extra work involved to sort this out has led to the board paying one director an extra £25k and another £10k and Downing £15k.

The vote was 100% in favour. The next news flow is the annual report in December.

sinterklaas
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Re: Hazel Renewables 1 and 2

#125079

Postby sinterklaas » March 15th, 2018, 11:47 am

I noticed they have a new top-up offer out and they are issuing shares in the formerly-to-be-wound-up VCT

Looks like the dissatisfied shareholders have been appeased by a buyback at 2% discount

127tolmers
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Re: Hazel Renewables 1 and 2

#126812

Postby 127tolmers » March 21st, 2018, 6:02 pm

https://www.investegate.co.uk/hazel-ren ... 3627H7824/

The offer closed very quickly. No surprise when there was an opportunity to invest in a mature renewables VCT fund (no longer available) with 30% tax relief, a 2% buyback policy and a 1.15% mgt fee.

The AGM today approved the offer. Again I was the only independent shareholder present.

127tolmers
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Re: Hazel Renewables 1 and 2

#167269

Postby 127tolmers » September 18th, 2018, 5:49 pm

https://www.investegate.co.uk/hazel-ren ... 5500H9610/
https://www.investegate.co.uk/hazel-ren ... 5500H9608/

The Company announces that it has published a top-up offers for subscription document (the “Top-Up Offers Document”) in respect of two separate share offers to raise in aggregate up to £3.23 million, one relating to an offer for subscription for investors subscribing less than £100,000 (the “First Offer”) and one for investors subscribing £100,000 or more (the “Second Offer” and together the "Top-Up Offers"), for new Ordinary Shares and A Shares of 0.1p each (“New Shares”).

A downloadable version of the Top-Up Offers Document is also available from:

newenergy.greshamhouse.com/vct/


See p5-6 for Chairmen's letter and p7 for rationale

Investments in renewable energy generation no longer
count as qualifying investments under VCT rules. The new
capital raised will be deployed into opportunities consistent
with the terms of the Companies’ original mandate stated
in their Prospectuses, of maximising tax-free income and
capital gains to shareholders.

These include companies involved in cleantech hardware and software
development, companies providing services to the
cleantech sector, and companies developing new projects.
Companies that are quoted on London’s AIM market are
also included within the Company’s original mandate.

Although the Companies have until 30 September 2020 to
deploy the new capital for the purpose of increasing the
qualifying capital ratio, Gresham House has already
commenced screening potential investment opportunities
and will strive to deploy the new capital quickly without
compromising on the rigorous process it employs in
selecting and investigating new investment opportunities.

UncleEbenezer
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Re: Hazel Renewables 1 and 2

#167356

Postby UncleEbenezer » September 19th, 2018, 3:43 am

Hmmm. Interesting proposition. In principle I like it. Expanding slightly towards a more general environmental mandate like IEM (my oldest holding in the sector - held even longer than those Ventus "C" shares that were my first specialist VCT).

But will existing holders like the change? Could be a bold move in a stable where shareholders have a history of independent thinking?

onslow
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Re: Hazel Renewables 1 and 2

#167526

Postby onslow » September 19th, 2018, 6:26 pm

Notwithstanding the interesting(!) history of these two funds, I think this is shaping up to be a good offer:

Mature portfolio with almost guaranteed long term cash flow
The raising is a relatively small dilution
30% discount effectively due to VCT tax relief

Risk is the new money isnt invested wisely, and not sure the newish manager has much experience in VCT funds(I've starting reading the links at the start of this thread - havent finished reading however)

Cant quite work out why each VCT has 2 separate offers - i.e. those applying for above £100k worth of shares and those who are not - thoughts?

Whats the boards general view ?

If anything, if I was an existing shareholder I'd be wanting some assurances that whatever they have in mind for the capital they are raising is pretty attractive, else I'd be telling them to stick with the existing assets with long term cashflow, and not allow any new investors

sinterklaas
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Re: Hazel Renewables 1 and 2

#168891

Postby sinterklaas » September 25th, 2018, 5:07 pm

Most pertinent question to me is whether long term VCT2 shareholders might vote to wind up again in 2021 : )

I suppose whether or not they are sufficiently placated by new 'promise to do better' regime, they are more likely to be outvoted by new shareholders.

127tolmers
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Re: Hazel Renewables 1 and 2

#170036

Postby 127tolmers » September 29th, 2018, 10:38 am


onslow
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Re: Hazel Renewables 1 and 2

#170056

Postby onslow » September 29th, 2018, 12:27 pm

Interesting that Hazel 2 apparently had more demand than Hazel 1 - and thus increased its offering.


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