11th Jul 2019 16:33
(Alliance News) - Alcentra European Floating Rate Income Fund Ltd on Thursday said it is planning to introduce a quarterly redemption mechanism priced at 1.5% below its net asset value per share in order to narrow its discount.
The trust will give shareholders the option to redeem as much as 20% of their holding on a quarterly basis at a 1.5% discount to net asset value.
At the end of its financial year on March 31, Alcentra's net asset value was 103.61 pence per share, which would have given a 102.06p per share quarterly redemption price. On that date, the company's share price was at a 6.6p discount to its net asset value.
Shares in Alcentra were up 0.3% at 100.00 pence on Thursday shortly before close.
Shareholders can request to redeem more than their allotted 20%, which will be granted to the extent that other shareholders opt to use less or none of their own allowance. No more than half of Alcentra's issued shares may be redeemed in any year.
"While the board does not wish to change the company's investment approach, it is aware that a number of investors wish the board to take steps to try to ensure that the discount at which the company's shares trade to their net asset value is narrowed," Alcentra said.
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