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New Century AIM VCT, Winding up, sort of, just not now.

Sophisticated and complex high-risk tax-sensitive investments in small companies: handle with care
CrackAddick
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New Century AIM VCT, Winding up, sort of, just not now.

#510861

Postby CrackAddick » June 30th, 2022, 11:50 am

Xmas comes early, as following on from the pantomime with it's sister VCT, as discussed below.
https://www.lemonfool.co.uk/viewtopic.php?f=25&t=30069

There is some interesting information in the Annual Report published today for New Century AIM.
https://data.fca.org.uk/artefacts/NSM/BWI/20220629005816.html

The juicy part is at the start in the Chairman's statement. To paraphrase the Chairman,

- The performance had been rubbish (33.1% return over 17 years including dividends, now only 24.05% TR).

- We/I wanted to wind the fund up, but were a few percentage points short of the required 75% needed. So I decided I wanted rid of all the old directors and previous Chairman. I have now appointed myself the new Chairman and two other people to be "Independent" Directors.

- Even though we cannot formally wind the company up, we have decided, subject to market conditions, to sell off assets and return any realised proceeds in a series of dividends. (I assume down the line, they will have a second stab at a Formal winding up vote)

In recent years I have always viewed these two VCTs as more of a Personal Investment Company, than a proper VCT. As the new chairman owns just over 27% of the issued shares and they haven't raised fresh funds in years. I guess now Mr Barnard has retired, he wants his money out.

127tolmers
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Re: New Century AIM VCT, Winding up, sort of, just not now.

#579389

Postby 127tolmers » March 29th, 2023, 5:41 pm

https://www.investegate.co.uk/new-centu ... 2900Z7445/

The end game

In September 2022, shareholders voted for an orderly wind down of the company. At the time the fund held approximately 80 investments. We have reduced the number of quoted investments down to just 6 which are valued at around £330,000. In doing so, we concentrated on the sale of securities in loss making companies where we saw a possibility of those companies coming back to the Market for more cash. This involved selling what we considered to be the riskiest and least marketable investments first. The core holdings which we are now left with are all in companies that are trading profitably and are of much higher quality.

We now have cash of around £1.436 million which we would like to pay to shareholders. Unfortunately, this is not possible as we have exhausted our distributable reserves. Should we put the company into members voluntary liquidation (MVL), it will then be possible to distribute our cash reserves to shareholders. This is one of the main reasons why we would urge shareholders to vote in favour of winding up the fund. Assuming the winding up proposals are voted in favour by at least 75% of the votes cast, it would be the intention of the directors to pay a distribution of at least 18p per share.

The Board is also concerned about difficulties in selling shares in the company. At present the current bid price (selling price) of the shares is 1p while the offered price (buying price) is 50p. Trading in the shares is very infrequent and anyone wishing to sell their shares is unlikely to be able to sell them except at a substantial discount to their net asset value. The last reported net asset value as at the 31st January 2022 was 23.05p per share, much of which was represented by cash. Even after the cost of winding up the company, it seems likely that the best way to maximise shareholder value would be to wind up the company.

Under HMRC rules, once a VCT enters into an MVL, it can continue to retain VCT status for tax purposes for three years. It is our belief that the remaining holdings can be realised well within this three year period. Remaining as a quoted VCT, it would be difficult to maintain its VCT status which is another reason why we would urge shareholders to vote for the winding up of the fund. We have not issued new shares within the past 5 years and thus the exiting shareholders will not lose their VCT tax reliefs as a result.

With the fund now at a much smaller size, we no longer consider it to be commercially viable for the directors to run it as a small registered Alternative Investment fund (AIF).

In order to enter into an MVL, we need the support of at least 75% of the shares voted, to be in favour of winding up the fund which is why we urge you to vote in favour.

The directors are currently in discussions with qualified insolvency practitioners and should the requisite vote to wind up the VCT be carried, it would be the intention of the Board to make a Declaration of Solvency and commence winding down. With a view to maximising the realisation proceeds for shareholders, the directors would assist the liquidators in the sale of the remaining holdings.

The liquidator will be responsible for settling all accounts payable and will also be responsible for arranging the payment of cash to the registrars for distribution to shareholders.

Board Recommendation

Given the small size of the fund, the difficulty in selling its shares, the wide spread between the bid and offered prices and the wish to pay out the cash reserves by means of distributions to shareholders, the Board unanimously recommend voting in favour of winding up the fund.

The Directors are aware that there are certain unquoted investments that they believe only have a nominal value. Purely to simplify and speed up the liquidation process we propose to donate these to charity. To help expedite the winding up of VCT, the Directors would urge you to vote in favour of this donation.

127tolmers
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Re: New Century AIM VCT, Winding up, sort of, just not now.

#585207

Postby 127tolmers » April 25th, 2023, 10:03 pm

The end and last rites

https://www.investegate.co.uk/new-centu ... 0100Z6203/

Since the agreement with a majority of shareholders to wind down the portfolio, we have reduced the number of holdings from 80 to just 5 with a value of £243,000. The company’s cash balance now stands at £1.523million.

Following the approval at the EGM held today to voluntarily wind up the company, we are in a position to commence distributions to shareholders. We plan to initiate this with a distribution of 19p per share.

Following this, we shall be left with net assets of around 3.7p per share. With a share price of 1p bid and 50p offered, we are concerned that a false market could arise. We therefore decided to suspend dealings in the shares and in due course we shall take steps to delist. Liquidators have been appointed and it is our intention to pay what assets remain to shareholders once the trust has been fully liquidated and any outstanding liabilities have been settled.


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