7th Mar 2025 07:00
COMPANY ANNOUNCEMENT
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) 596/2014 AS IT FORMS PART OF UK DOMESTIC LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018, AS AMENDED. ON THE PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.
7 March 2025
Vietnam Enterprise Investments Limited
("VEIL" or the "Company")
100% Conditional Tender Offer
The Board of VEIL is pleased to announce that the Company proposes to introduce a five-year performance-related 100% conditional tender offer (the "Conditional Tender Offer").
The Conditional Tender Offer will be conditional on the Company's net asset value ("NAV") total return underperforming against its reference index, currently the Vietnam Ho Chi Minh Stock Index ("VN Index"), over the five-year period from close of business on 31 March 2025 to close of business on 31 March 2030 (the "Performance Period").
The Board has confidence that the Company's Investment Manager will outperform the Company's reference index over the next five years. Nonetheless, in consultation with the Investment Manager, the Board has decided that, should performance be below the reference index, there should be a mechanism for shareholders to realise up to 100% of their interests in the Company.
Accordingly, if the Company's NAV total return fails to meet or exceed the reference index total return (both in USD terms) over the Performance Period, and subject to the Discontinuation Resolutions (as such term is defined below) not being passed at the Company's 2025 and 2030 annual general meetings, the Board will put forward proposals to shareholders to undertake a tender offer for up to 100% of their interests in the Company. Any such tender offer will be at a price equal to the realisation proceeds of a tender pool created by reference to the then prevailing NAV less the costs of the tender offer. The allocation of the Company's assets to the tender pool will be undertaken with the aim of ensuring that continuing and exiting shareholders are treated fairly. The return of capital from the realisation of assets in the tender pool may take place in more than one tranche, with the timing of returns of capital dependent on the number of shares tendered, the composition of the tender pool and prevailing market liquidity at that time.
In accordance with the Company's articles of association (the "Articles"), the Company is required to propose a special resolution for the winding up of the Company at its annual general meeting in 2025 and every five years thereafter (a "Discontinuation Resolution"), such resolution becoming effective on the 31 December in the second year after the passing of the Discontinuation Resolution. The purpose of the Discontinuation Resolution is to enable shareholders to reflect, on a reasonably regular basis, on the continued existence of the Company.
If the Conditional Tender Offer is triggered, the Company intends to seek shareholder approval for the requisite share buy-back authority at the Company's annual general meeting in 2030. The Conditional Tender Offer will be conditional upon obtaining this approval, meaning shareholders will ultimately decide whether the Conditional Tender Offer proceeds. The Conditional Tender Offer will also be conditional on the Discontinuation Resolution not being passed at the Company's 2030 annual general meeting.
If the Discontinuation Resolution is passed at the 2030 annual general meeting, shareholders would ultimately receive the proceeds from 100 per cent of their investment through the winding-up process. However, in accordance with the Articles, the winding-up would only take effect on 31 December 2032, and the process of realising the portfolio and distributing proceeds to shareholders may take longer, depending on market conditions and the liquidity of the Company's portfolio. The Board therefore expects that, if triggered, the Conditional Tender Offer would provide an alternative mechanism for shareholders seeking a shorter timeframe for the return of their capital.
The introduction of the Conditional Tender Offer will not affect the Board's current approach to discount management, and the Board will continue to exercise its authority to buy back shares when it believes this to be in shareholders' interests, and with the aim of managing the discount at which the Company's shares trade relative to the NAV per share.
Chair Sarah Arkle said: "The Board remains confident in the Company's future prospects. However, we are disappointed with the level of the discount at which the Company's shares have been trading, which has widened in common with other listed investment company discounts. In recognition of this, and to give shareholders an opportunity to exit their holding if the Company underperforms, and with the full support of the Investment Manager, the Board is introducing a 100% Conditional Tender Offer, allowing shareholders to realise up to 100% of their investment if the Company's NAV performance underperforms its reference index over the next five years. This ensures that, in the event of underperformance against the reference index, shareholders who wish to exit have a structured option, while long-term investors can continue to benefit from Dragon Capital's investment process and commitment to active fund management, which will remain unchanged. We believe this strikes the right balance between confidence in our future performance and our commitment to shareholder value."
Enquiries:
Vietnam Enterprise Investments Limited
Rachel Hill
+44 (0) 797 121 4852
Steve Mantle
+44 (0) 755 370 1237
Jefferies International Limited
Stuart Klein
+44 (0) 20 7029 8703
h2Radnor
Iain Daly
+44 (0) 20 3897 1830
VEIL's LEI code is 213800SYT3T4AGEVW864
Related Shares:
Vietnam Enterprise Investments