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Monday 12 November, 2007

AIM

Sch 1 Update- CQS Rig Finance

AIM
12 November 2007


 ANNOUNCEMENT TO BE MADE BY THE AIM APPLICANT PRIOR TO ADMISSION IN ACCORDANCE WITH RULE 2 OF THE AIM RULES FOR
                                             COMPANIES ('AIM RULES')

COMPANY NAME:


CQS Rig Finance Fund Limited ('the Company')


COMPANY REGISTERED OFFICE ADDRESS AND IF DIFFERENT, COMPANY TRADING ADDRESS (INCLUDING POSTCODES):


Dorey Court
Admiral Park
St. Peter Port
Guernsey

COUNTRY OF INCORPORATION:


Guernsey


COMPANY WEBSITE ADDRESS CONTAINING ALL INFORMATION REQUIRED BY AIM RULE 26:


www.cqsrigfinance.com


COMPANY BUSINESS (INCLUDING MAIN COUNTRY OF OPERATION) OR, IN THE CASE OF AN INVESTING COMPANY, DETAILS OF ITS
INVESTING STRATEGY).  IF THE ADMISSION IS SOUGHT AS A RESULT OF A REVERSE TAKE-OVER UNDER RULE 14, THIS SHOULD BE
STATED:


The Company is a closed-ended limited liability investment company that was registered and incorporated in
Guernsey on 8 November 2006. The Company invests primarily in debt instruments issued to finance the
construction, modification and/or refurbishment of rigs and other infrastructure and/or equipment used for the
offshore exploration and production of oil and natural gas.

The Company does not have a fixed life but, under the Articles of Association, Shareholders will be given the
opportunity to vote on the continuation of the Company at the annual general meeting to be held in 2014.



The Company's investment objective is to provide Shareholders with an attractive total return, primarily through
income with scope for capital appreciation. The Company targets, in the absence of unforeseen circumstances, an
annualised gross dividend yield of 8 per cent. of the net asset value of the Company at the start of each
financial year. The Company intends to pay quarterly dividends in respect of each period ending 31 March, 30
June, 30 September and 31 December.

The investment adviser seeks to achieve the investment objective of the Company by sourcing and trading a
portfolio of secured debt instruments using fundamental credit and industry analysis to identify instruments with
an attractive risk-adjusted yield. Such debt instruments are expected to be primarily issued to finance the
construction, modification and/or refurbishment of rigs and other infrastructure and/or equipment used for the
offshore exploration and production of oil and natural gas.

The Company seeks, on a global basis, to capture on its investments attractive risk-adjusted yields and potential
capital appreciation arising from possible corporate activity, including but not limited to, refinancing and
industry consolidation. Returns are expected to be enhanced through gearing the Company's investment portfolio by
approximately 100 per cent. although gearing up to 150 per cent. is permitted.



The Company seeks to construct its investment portfolio using a range of securities, derivatives and other
agreements including but not limited to positions in bonds, floating rate securities, sovereign bonds,
asset-backed securities, loans, repurchase agreements, interest rate and credit default swaps and swaptions,
total return swaps, interest rate futures and options, bond futures and options, currency swaps, foreign exchange
contracts, futures and options and other options and derivatives.

The portfolio includes exposure, either directly or synthetically using derivatives, to debt instruments that are
secured. Such instruments may be denominated in any currency and the Company will have flexibility to trade in
any market or instrument using various techniques to achieve its stated return objectives. The Company may trade
both rated and unrated debt instruments although it expects, in most cases, that such instruments will not be
rated by a recognised rating agency. The Company may also trade listed and unlisted securities.



Although the Company has the ability to make investments on a global basis, the breakdown of the existing
portfolio by country of rig construction shows that over half of the Company's investments have been made in
Singapore and China, with further investments on a smaller scale in Europe, the Middle East and the United
States.



Derivatives may be used for hedging or investment purposes. The Company may execute trades synthetically using
derivatives including, but not limited to, total return swaps referencing the secured debt instruments selected
for its investment portfolio. The Company may also retain amounts in cash, or cash equivalents, pending
reinvestment if this is considered appropriate to the achievement of its investment objective.

It is expected that investments will often be held through to maturity (or earlier redemption/repayment by the
issuer/borrower), although the investment adviser may trade investments depending on the prevailing market
conditions at any time. The performance of such investments is therefore expected to be driven primarily by the
performance of the assets securing the investments.



CQS Cayman Limited Partnership has been appointed investment manager and will be responsible for advising the
Company on the overall management of the Company's investments and for managing the Company's cash and
investments in fixed income instruments in accordance with the Company's investment objective and policy (subject
to the overall control and supervision of the Board). CQS Cayman Limited Partnership is a limited partnership
registered in the Cayman Islands. As at 1 October 2007 it had approximately US$9.3 billion in funds under
management.



The investment manager has retained CQS Investment Management Limited as investment adviser with responsibility
for discretionary management of the investment portfolio.








DETAILS OF SECURITIES TO BE ADMITTED INCLUDING ANY RESTRICTIONS AS TO TRANSFER OF THE SECURITIES (i.e. where
known, number and type of shares, nominal value and issue price to which it seeks admission and the number and
type to be held as treasury shares):


50,000,000 C Shares of no par value at a placing price of £1.00 per C Share (ISIN: GG00B28CP390)


CAPITAL TO BE RAISED ON ADMISSION (IF APPLICABLE) AND ANTICIPATED MARKET CAPITALISATION ON ADMISSION:


The Company is proposing to raise £50 million (before expenses) through a conditional placing, of 50 million C
Shares at a Placing Price of £1.00 per Share. The aggregate proceeds of the Placing, will be approximately £49
million, after deduction of expenses.



Anticipated market capitalisation of the C Shares on admission of £50 million


PERCENTAGE OF AIM SECURITIES NOT IN PUBLIC HANDS AT ADMISSION:


As at admission 38% of the C Shares are classified as not in public hands


DETAILS OF ANY OTHER EXCHANGE OR TRADING PLATFORM TO WHICH THE AIM SECURITIES (OR OTHER SECURITIES OF THE
COMPANY) ARE OR WILL BE ADMITTED OR TRADED:


Channel Island Stock Exchange (CISX)


FULL NAMES AND FUNCTIONS OF DIRECTORS AND PROPOSED DIRECTORS (underlining the first name by which each is known
or including any other name by which each is known):




Michael Salter (Chairman) (Non-Executive - UK resident)

Bruce Appelbaum (Non-Executive - US resident)

Trevor Ash (Non-Executive - Guernsey resident)

Jonathan Gamble (Non-Executive - Guernsey resident)

Gavin Strachan (Non-Executive - UK resident)





FULL NAMES AND HOLDINGS OF SIGNIFICANT SHAREHOLDERS EXPRESSED AS A PERCENTAGE OF THE ISSUED SHARE CAPITAL, BEFORE AND
AFTER ADMISSION (underlining the first name by which each is known or including any other name by which each is known):

                                                   Existing                            Following Admission

      Ordinary Shares as at 24th October 2007:
      Name                                 Number of   per cent. of issued    Number of Ordinary    per cent. Of issued
                                     Ordinary Shares       Ordinary Shares                Shares        Ordinary Shares
      Iimia Plc                            9,050,000                  18.1             9,050,000                   18.1
      Baillie Gifford & Co                 5,500,000                  11.0             5,500,000                   11.0
      Investec Asset Management            5,043,385                                   5,043,385
      Limited


                                                                      10.8                                         10.8
      CQS Cayman Limited
      Partnership
                                           2,500,000                   5.0             2,500,000                    5.0

   C Shares following Admission:
                                        Name               Number of C Shares       per cent. of issued C
                                                                                                   Shares

Midas Capital Partners                                              6,250,000                       12.5%
Baillie Gifford & Co.                                               5,500,000                       11.0%
Combined entities of the Arbuthnot Banking                          4,782,583                        9.6%
Group
RBC cees Nominees Limited                                           3,313,917                        6.6%
Carrousel Capital Limited                                           2,500,000                        5.0%
Investec Asset Management Limited                                   2,200,000                        4.4%
Neptune Investment Management                                       2,111,111                        4.2%
Allied Irish Bank Plc                                               2,000,000                        4.0%
Reliance Mutual Insurance Society                                   2,000,000                        4.0%
SVM Asset Management Limited                                        2,000,000                        4.0%
Bordeaux Services (Guernsey) Limited                                1,500,000                        3.0%



NAMES OF ALL PERSONS TO BE DISCLOSED IN ACCORDANCE WITH SCHEDULE 2, PARAGRAPH (H) OF THE AIM RULES:

(i)                  ANTICIPATED ACCOUNTING REFERENCE DATE

(ii)                DATE TO WHICH THE MAIN FINANCIAL INFORMATION IN THE ADMISSION DOCUMENT HAS BEEN PREPARED

(iii)               DATES BY WHICH IT MUST PUBLISH ITS FIRST THREE REPORTS PURSUANT TO AIM RULES 18 AND 19:


(i)                  30 September (latest unaudited interims to 31 March 2007 published on 29 June 2007)

(ii)                No financial information included in the Admission Document pursuant to AiM Rule 28



(iii) Next three results to be published on:

a) Annual Results for 12 months to 30 September 2007 by 31 March 2008

b) Interim results for 6 months to 31 March 2008 by 30 June 2008

c) Annual Results for 12 months to 30 September 2008 by 31 March 2009


EXPECTED ADMISSION DATE:


13 November 2007


NAME AND ADDRESS OF NOMINATED ADVISER:


Arbuthnot Securities Limited
Arbuthnot House
20 Ropemaker Street
London,
EC2Y 9AR


NAME AND ADDRESS OF BROKER:


Arbuthnot Securities Limited
Arbuthnot House
20 Ropemaker Street
London,
EC2Y 9AR


OTHER THAN IN THE CASE OF A QUOTED APPLICANT, DETAILS OF WHERE (POSTAL OR INTERNET ADDRESS) THE ADMISSION DOCUMENT WILL
BE AVAILABLE FROM, WITH A STATEMENT THAT THIS WILL CONTAIN FULL DETAILS ABOUT THE APPLICANT AND THE ADMISSION OF ITS
SECURITIES:


A copy of the admission document containing full details of the applicant and the admission of its securities is
available at www.cqsrigfinance.com


DATE OF NOTIFICATION:


12 November 2007
NEW/ UPDATE:


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