22 January 2010
The Value Catalyst Fund Limited ("VCF" or "the Company")
Consultation with Shareholders
At the end of 2010, VCF is scheduled to hold an annual general meeting ("AGM")
which will include a vote to decide whether or not it should continue in its
current form. The Board is mindful that many closed-end funds have been asked
by shareholders to distribute money back to them and as such, we are keen to
consider, in advance, any action that shareholders may require. With this in
mind we would appreciate the feedback of all holders of VCF shares
("Shareholders") as to their preferred route for the Company's future, so the
Board can manage the Company's portfolio of investments in a suitable manner.
The Board will seek to follow the preferred route indicated by the majority of
the Shareholders and offer options where possible to satisfy as many different
standpoints as practicable.
If the majority of Shareholders wish to realise their investment, the Board will
come back with detailed proposals and start that process as soon as practicable.
However, it is important to note that it will take some time to maximise value
from the Company's two largest investments, Celtic Development Properties and
DouglasBay, which is why, if that is the direction desired by the majority of
the Shareholders, the Board would prefer to begin this process sooner rather
than later in the current year. Following such a realisation of the Company's
major assets, the Company would seek to make distributions as soon as practical.
However, it should be noted that the value that could be realised from such
strategic stakes is heavily correlated to the timeframe to realise those
investments, which is another reason why the Company should establish its
direction at an early stage for the benefit of its Shareholders. The Company
currently has a gearing ratio of approximately 40%. Shareholders wishing to take
an in-specie redemption may be able to do so but, in such circumstances, they
would also need to take on a proportionate part of the borrowings associated
with the Company's assets, themselves, subject a practical minimum.
For your information, Laxey Partners Limited, the Company's Investment Advisor,
expects to retain its own investment in VCF throughout any distribution process.
The Board remains confident in the prospects of the Company's major investments.
Shareholders are requested to provide their feedback to Laxey Partners Limited
or Smith & Williamson Corporate Finance Limited by 26 February 2010. Contact
details are set out below.
Laxey Partners Limited
Tel: +44 (0)20 7494 6380
Azhic Basirov / Siobhan Sergeant
Smith & Williamson Corporate Finance Limited
Tel: +44 (0)20 7131 4000