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Vision Opportunity (VOC)

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Thursday 21 July, 2011

Vision Opportunity

Proposed Change of Investmnt Policy&Capital Return

RNS Number : 7922K
Vision Opportunity China Fund Ltd
21 July 2011
 



NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART INTO
the united states of america, CANADA, AUSTRALIA, SOUTH AFRICA OR JAPAN

21 July 2011

Vision Opportunity China Fund Limited

Proposed Change of Investment Policy

and

Proposed Capital Return to Shareholders of US$20 Million

Introduction

The Company announced on 24 May 2011 that the Board is recommending that the Company should not make any new investments, should seek to realise its remaining investments in an orderly fashion and should return surplus cash to Shareholders from time to time.  As implementation of the Board's recommendation will constitute a material change to the Company's investment policy, such change must be approved by Shareholders (in the form of an ordinary resolution) at an extraordinary general meeting.

The Company has already realised a number of investments in accordance with its existing investment policy and the Company now has a significant amount of cash and cash equivalents (US$28.4 million as at 15 July 2011).  The Board is proposing to return US$20 million of this amount to Shareholders at this stage.  The Board has been in discussions with its advisers to determine appropriate mechanisms for returning surplus cash to Shareholders and has decided that, on this occasion, the most appropriate mechanism is a pro rata return of capital of US$0.3063 per Ordinary Share.  This return must also be approved by Shareholders (in the form of an ordinary resolution) at an extraordinary general meeting.

The Company is posting a circular to Shareholders today which contains a notice convening an extraordinary general meeting for 11.00 a.m. on 12 August 2011 at which the resolutions to approve the proposed change of investment policy and proposed capital return to Shareholders will be proposed.

VOC also announces the departure of David Benway from his role as Director of Origination of the Investment Manager, to pursue other interests.  He will remain a director of VOC for the time being on his current terms.

Changes to the Company's Investment Policy

In view of the Company's recent performance, the current adverse conditions in the financial markets and the uncertain outlook for smaller US-listed Chinese companies and after consulting Shareholders representing the majority of the issued share capital, the Directors have concluded that the Company's investments should be realised in an orderly manner and surplus cash returned to Shareholders.  Pending the EGM, the Board has instructed the Investment Manager to make no further investments other than in cash equivalents.  Within the parameters of the existing investment policy, the Investment Manager has already realised the Company's investments in China Gerui Advanced Materials Group Ltd. (NASDAQ:CHOP), China Security & Surveillance Technology, Inc. (NYSE:CSR), Global Education & Technology Group Limited (NASDAQ:GEDU) and China Ceramics Co., Ltd. (NASDAQ:CCCL).

If the proposed investment policy is adopted at the EGM, the Board will work to implement the new investment policy in an effective and efficient manner with a view to achieving a balance between returning cash to Shareholders from time to time in such manner as the Board may (in its absolute discretion) determine and the realisation of optimum value for the Company's remaining investments.  Accordingly, the timing and quantum of future returns of cash to Shareholders are uncertain and will, in part, depend on the timing and quantum of the disposal of the assets and the ongoing liabilities incurred in the operation and management of the Group.

Periodic Announcements

If the proposed investment policy is approved at the EGM, the Company will keep the market informed of the status and progress which has been made in relation to its implementation in accordance with the AIM Rules for Companies, including: weekly announcements of the Company's NAV; monthly announcements of the Company's NAV, its cash position and whether any positions have been exited in full; and quarterly announcements of the Company's remaining investments.

As at 15 July 2011 (being the latest practicable date prior to this announcement), VOC's portfolio comprised:

 

 

Value (US$m)

% of Gross

Assets

Shengkai Innovations, Inc. (NASDAQ:VALV)

12.66

23.98%

QKL Stores Inc.(NASDAQ:QKLS)

11.21

21.23%

Tianyin Pharmaceutical Co. (AMEX:TPI)

0.31

0.59%

Wuhan General Group (China) Inc. (NASDAQ:WUHN)

0.12

0.22%

Keyuan Petrochemicals Inc. (NASDAQ:KEYP)

0.03

0.05%

China Integrated Energy Inc. (OTCPK:CBEH)*

0.00

0.00%

Cash and cash equivalents

28.35

53.68%

* This investment is currently valued at US$nil.

Dealings

The Ordinary Shares will continue, for the time being, to be traded on AIM.  The Board will monitor and review on an ongoing basis the costs, direct and indirect, of maintaining this arrangement relative to the benefits to Shareholders of such maintenance.  Unless the London Stock Exchange otherwise agrees, any cancellation of trading of the Ordinary Shares on AIM at the Company's request will be conditional upon the consent of not less than 75% of votes cast by the Shareholders given in a general meeting.

Return of Capital

In view of the amount of cash and cash equivalents now held by the Company, the Board is proposing to return US$20 million to Shareholders.  The Board has been in discussions with its advisers to determine appropriate mechanisms for returning surplus cash to Shareholders and has decided that, on this occasion, the most appropriate mechanism is a pro rata return of capital of US$0.3063 per Ordinary Share.  Information on the taxation implications for Shareholders of this Capital Return is set out in the circular which will be sent to Shareholders today convening the EGM.  

The Capital Return is subject to approval by Shareholders (in the form of an ordinary resolution) at the EGM.  Subject to the relevant resolution being passed at the EGM, the timetable for the Capital Return is as follows:

Shares commence trading without the right to receive the Capital Return,
assuming the relevant resolution is passed at the EGM
(what would typically be referred to as the ex-dividend date)                                                              17 August 2011

Record date                                                                                                                                                    19 August 2011

Payment date                                                                                                                                                 30 August 2011

The Capital Return will be paid in Sterling and calculated based on the rate of exchange as at 3.00 p.m. on 17 August 2011.

Definitions

The following definitions apply throughout this announcement unless the context otherwise requires:

"AIM"                                                         AIM, a market operated by the London Stock Exchange plc

"AIM Rules for Companies"                              the rules for AIM companies published by the London Stock Exchange plc, as amended or re-issued from time to time

"Capital Return"                                                     the proposed return of capital described in this announcement

"Company" or "VOC"                                              Vision Opportunity China Fund Limited

"Directors" or "Board"                                           the directors of the Company

"EGM"                                                                          the extraordinary general meeting of the Company convened for 11.00 a.m. on 12 August 2011 (or any adjournment thereof)

"Investment Manager"                              Vision Capital Advisors, LLC, the Company's investment manager

"NAV"                                                         net asset value

"Ordinary Shares"                                                   ordinary shares of no par value each in the capital of the Company

"Shareholders"                                                        the holders of Ordinary Shares

"Sterling"                                                                   pounds sterling, the lawful currency of the United Kingdom

"US$"                                                         the lawful currency of the United States of America

General

Canaccord Genuity Limited, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting exclusively for the Company and for no one else in relation to the proposals referred to in this announcement.  Canaccord Genuity Limited will not regard any other person as its client in relation to such proposals and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Canaccord Genuity Limited or for providing any advice in relation to the contents of this announcement or any transaction or arrangement referred to herein. 

For further information, please contact:

Vision Opportunity China Fund Limited                  Tel: +1 (212) 849 8225
Rebecca Kerner/Adam Benowitz

Canaccord Genuity Limited                                       Tel: +44 (0)20 7050 6500
Sue Inglis/Guy Blakeney

Financial Dynamics                                                    Tel: +44 (0)20 7269 7132
Ed Gascoigne-Pees/Ed Berry

NOTE TO EDITORS

Vision Opportunity China Fund Limited is a closed-ended listed fund traded on AIM.  VOC primarily invests directly in listed companies with operations principally within Greater China.  Greater China is a collective term for the territories administered by the People's Republic of China, those administered by the Republic of China and Singapore.

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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