RNS Number : 7638J
KSK Emerging India Energy Fund Ltd
09 December 2008
Not for release, publication or distribution in, or into, the United States, Canada, Australia, Japan, Israel, the Republic of Ireland or the Republic of South Africa.
9 December 2008
KSK Emerging India Energy Fund Limited
('KEF' or 'the Company')
Proposed Extraordinary General Meeting and Trading Update
The Company today announces proposals to be put forward at an extraordinary general meeting ('EGM') together with a trading update.
Since the Company's IPO in June 2008 the global financial crisis has materially affected the investment landscape in India. This backdrop has presented KEF's Investment Manager with new investment opportunities and a basis upon which to renegotiate more favourable terms with pipeline target companies, including those set out in the Company's admission document.
Although the events described above have caused a delay in the deployment of KEF's funds, the Board believes that the resultant preservation of capital to date has been in the best interests of shareholders and that the Company remains in a strong position to exploit attractive entry valuations in an increasingly capital constrained market.
As at 30 November 2008 the estimated unaudited Net Asset Value per share was 99.5 pence of which 93.8 pence represents cash deposits.
Following consultation with shareholders the Board is aware of a number of investors who, predominantly due to internal issues within their own funds, wish to realise part or all of their investment in KEF at close to net asset value per share and who are unable to do so because of illiquidity in the Company's shares. The Board is equally aware of a number of investors who are supportive of the Company in the long term.
The Board therefore intends to put forward the following proposals to shareholders at an EGM to be convened in January 2009:
An ordinary resolution to authorise the Company to carry out a tender offer ('Tender Offer') for up to 50 per cent. of the Company's issued share capital (excluding shares held in treasury) at a price of 90 pence per share. Shareholders would be invited to tender all or part of their shares at any time up to the date the Tender Offer closes (expected to be early February). Shareholders who do not wish to tender their shares will not be required to take any action.
If the Tender Offer is taken up in full, the Board and the Company's Investment Manager believe that despite a smaller pool of capital available for investment, the Company will remain in a position to generate long term capital growth for shareholders through diversified exposure to an actively managed portfolio of investments in companies engaged in the Indian power and energy sector value chain.
A special resolution to appoint a liquidator to wind up the Company's affairs, realise its investments, discharge its liabilities and return surplus capital to shareholders. The Board provisionally estimates that liquidation costs (excluding any potential loss on realisation of invested assets) would amount to approximately 1.5 pence per share. Although a significant percentage of the Company's assets are held in cash, the Board cannot be certain as to the timing of a cash distribution to shareholders, or that the Company's invested assets could be realised quickly or at a price close to that which the Company paid at investment.
If Proposal Two is passed then the Tender Offer will not proceed and the Company will be wound up. If neither Proposal One nor Proposal Two are passed the Company will continue as currently constituted.
A circular and notice of EGM giving further details of the above proposals will be sent to shareholders shortly.
In addition to KEF's £4.3 million investment in Konaseema Gas Power Limited (as announced on 17 July 2008) the Company has acquired 776,527 ordinary shares in Diamond Power Infrastructure Limited ('DPIL') for INR 82.3 million (approximately £1.1 million) which represents approximately 4 per cent. of the issued share capital of DPIL. The Company has contracted to acquire a further investment of up to 3.5 per cent of the issued share capital of DPIL.
DPIL is one of India's emerging leaders in manufacturing equipment required in the transmission and distribution of power including conductors, cables and transformers. Distribution business is expected to grow rapidly in India due to Indian Government initiatives designed to strengthen the networks across urban and rural areas as enshrined in the commitment to provide 'Power for All by 2012'.
DPIL undertakes turnkey services including project initiation, planning, design and development, procurement and commissioning. DPIL is currently executing a major expansion plan across all of its product lines which will make it one of the top five manufacturers of this equipment in India.
DPIL revenues for the year ending 31 March 2008 were INR 5,503 million (approximately £77.5 million), and profit after tax was INR 456 million (£6.4 million) for the same period. Gross assets as at 31 March 2008 were INR 3,014 million (£42 million). DPIL is quoted on the Bombay Stock Exchange (DIAC:BSE).
On 9 October 2008 the Company announced it was in negotiations with Athena Infraprojects Private Limited regarding a possible investment of approximately US$50 million. In light of current global economic conditions, the Investment Manager sought to renegotiate terms however a satisfactory agreement could not be reached and these negotiations have now been terminated.
The Company's Investment Manager is actively pursuing a number of other proposed transactions comprising both new opportunities and renegotiated deals and, pending the outcome of the EGM, the Company will update shareholders in due course.
- ENDS -
For further information:
KSK Emerging India Energy Fund Limited
Tanmay Das, Non-Executive Director
Tel: +44 (0) 20 7398 7715
This press release is not for distribution (directly or indirectly) in or to the United States, Canada, Australia, Japan, Israel, the Republic of Ireland or the Republic of South Africa or any other jurisdiction in which the same would be unlawful. This press release is not an offer of securities for sale in or into the United States, Canada, Australia, Japan, Israel, the Republic of Ireland or the Republic of South Africa. This press release does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any Ordinary Shares of the Fund.
The Company is a Registered Closed-ended Investment Fund pursuant to the framework introduced by the guidance document issued by the Guernsey Financial Services Commission (the 'GFSC') dated February 2007. Shares may not be offered directly to the public within Guernsey, such public being defined in the Guidance Document as being any person not regulated under any of Guernsey's financial services regulatory laws. Neither the GFSC nor the States of Guernsey Policy Council take any responsibility for the financial soundness of the Company or for the correctness of any of the statements made or opinions expressed with regard to it.
This information is provided by RNS
The company news service from the London Stock Exchange