Notice of AGM

6 August 2010

RAPID REALISATIONS FUND LIMITED

("Rapid" or "the Company")

Notice of Annual General Meeting ("AGM")

Rapid Realisations Fund Limited (AIM: RRF), announces that its AGM will be held at 10.00am on 14 September 2010 at Sarnia House, Le Truchot, St Peter Port, Guernsey.

In addition to the ordinary business of the meeting, the directors are proposing an amendment to the Company's investing policy, a capital return scheme and certain amendments to the articles of incorporation, further details of which are set out below and in the notice of AGM.

Amendment to the investment objective and policy

As announced on 25 June 2010 it is proposed to amend the Investment Policy of the Company so that going forward it will be:

"to manage the realisation of the Company's investment portfolio and to maximise the return of invested capital to Shareholders during the period ending on 30th September 2013. During this period the Company shall not make any new investments".

It has been made apparent to the Board and its advisers that the vast majority of Shareholders would like the New Investment Policy adopted and cash returned to Shareholders rather than the Company continue with its existing Investment Policy. The consequences of the New Investment Policy is that no new investments will be made and subject to the Companies Law the cash proceeds of the realisation of investments and/or an in specie distributions of assets will be made to Shareholders on a pro rata basis as and when the Board determines in its absolute discretion.

Rhys Davies and Brett Miller, two of the new directors that were appointed on 25 June 2010 have considerable experience of sitting on boards of investment companies and investment trusts and have been active over a number of years in winding down and converting such investment companies and trusts into realisation vehicles.

Cenkos Fund Managers remains the Company's investment manager and no amendments have been proposed to the Investment Management Agreement. Further information about Cenkos Fund Managers is set out in the Admission Document.

In light of the feedback received from Shareholders, the Directors are proposing Resolution 7 which seeks to formally adopt this New Investment Policy and which is proposed as an ordinary resolution. The ordinary resolution requires a simple majority of the votes cast to be cast in favour of it for it to be passed.

Capital Return Scheme

With a view to implementing the Company's proposed New Investment Policy of maximising the return of capital to Shareholders, the Board is also seeking the approval of Shareholders to adopt the Capital Return Scheme.

Under the Capital Return Scheme and subject to the Companies Law the Company intends to return capital to Shareholders as and when the Board shall determine in their absolute discretion. The initial capital to be returned will comprise the excess cash balances which have not been invested net of any working capital requirements determined by the Board. Thereafter capital is intended to be returned to Shareholders periodically as and when investments are realised although where there may be a difficulty in realising investments, the Board may determine to return them in specie.

The Board does not intend to make distributions in specie to any significant extent but if it determines to do so, it will make such distributions pro rata to each Shareholder on the relevant record date and the Company would pay any stamp duty payable.

The Board has been considering with its advisers a number of different mechanisms that may be used for the purposes of returning capital, each with a view and intention that such returns would be treated as capital and not as income in the hands of Shareholders.

For these purposes the Board is proposing the following mechanisms:-

(a) To return capital each time through a bonus issue of new redeemable B Shares which will then be immediately redeemed by the Company on a pro rata basis.

Under this mechanism it is proposed to issue new B Shares of no par value by way of a bonus issue to existing Shareholders on the relevant record date and to redeem them immediately following their issue. Redemptions would ordinarily be paid in cash although the Company may satisfy such redemptions in specie.

In order to implement this mechanism, New Articles will need to be adopted by the Company. The New Articles will, amongst other things, permit the Board to issue an unlimited number of B Shares of no par value. The B Shares will have no rights to receive dividends, nor to receive any amounts on a winding up of the Company. The B Shares would be redeemable only at the option of the Company and on such terms as the Directors may from time to time determine. The B Shares will not be entitled to vote at any general meeting of the Company.

(b) To consider distributions from the Company's capital reserves.

The Company has an amount equal to £55,747,011 standing to the credit of a distributable reserve created following the passing of a special resolution on 18 July 2007 cancelling the Company's share premium account. The Company is considering with its advisers the extent to which such reserve may be used for the purposes of returning capital to Shareholders.

(c) To buyback and cancel Shares

At the AGM an ordinary resolution will also be proposed granting the Company authority to buyback up to 8,649,447 Shares (representing 14.99 per cent. of the Company's issued share capital) and any such Shares which are repurchased will be cancelled.

The Company is not currently intending to make a tender offer to all Shareholders to repurchase shares and the Board would use the authority to buyback shares as and when it was considered in the best interests of the Company to do so. If the Board decides to implement a tender offer a further announcement will be made and a circular sent to Shareholders.

Articles

In order to facilitate the return of capital contemplated by this document, and to bring some of the provisions of the Articles up to date with the Companies Law, it is proposed to adopt New Articles. The material changes in the New Articles compared to the existing ones can be summarised as follows:-

(i) The New Articles will make it clear that the issue of B Shares referred to above shall not be subject to the pre-emption rights retained (for other classes of shares) in the Articles;

(ii) The New Articles will permit the Board to capitalise, by the issue of B Shares, amounts standing to the credit of the Company's distributable reserve (being the reserve created when the Company's share premium account was cancelled on 23 November 2007) as well as any share premium account or capital redemption reserve without the prior approval of an ordinary resolution of Shareholders (as is currently required).

(iii) The New Articles will also expressly permit the Directors to capitalise, by the issue of B Shares, the capital reserves standing to the credit of the Company and which represent the capital returns from the realisation of investments by the Company. The Articles were adopted under Guernsey's existing company law which was repealed in 2008 by the Companies Law. The New Articles will reflect the fact that the Company may (a) make distributions and pay dividends in accordance with the Companies Law (i.e. subject to satisfying a solvency test immediately after any such distribution or dividend) and (b) pay dividends without such dividends necessarily having to be paid out of the profits of the Company as stated in the current Articles. This is because the Companies Law no longer requires dividends to be paid out of profits available for the purpose.

(iv) The New Articles will also permit the Directors to divide in specie the whole or any part of the assets of the relevant value (which shall be conclusively determined by the Directors in good faith) of the Company on a redemption of a B Share and appropriate such assets in satisfaction or part satisfaction of the redemption price and any other sums payable on redemption and provided any such appropriation does not materially prejudice the interest of the remaining Shareholders.

(v) The New Articles will amend the existing requirement for the Shareholders to elect a chairman for each general meeting and instead will provide for the chairman of the Board to chair general meetings of the Shareholders.

(vi) The New Articles will amend the existing requirement for a special resolution to reduce share capital as that is no longer a requirement of the Companies Law.

(vii) The New Articles will also amend the provisions relating to Directors' fees, further details of which are set out below.

Resolution 10 is being proposed as a special resolution to adopt the New Articles. The special resolution requires a majority of more than seventy-five per cent. of the votes cast to be cast in favour of it for it to be passed.

Cost Reductions

As announced on 25 June 2010 the Board will be examining the cost base of the Company and, in this regard, is proposing that the New Articles will contain provisions whereby the maximum aggregate fees payable to Directors is reduced to £80,000 per annum and no Director will receive more than £15,000 per annum with the exception of the chairman whose remuneration shall be limited to a maximum of £20,000 per annum.

All definitions used in this announcement are as set out in the notice of AGM.

A copy of the notice of AGM and the Proxy Form have been despatched to shareholders today and are also available on the Company website http://www.rapidrealisations.com 

-ends-

Enquiries: 

Grant Thornton Corporate Finance Philip Secrett

+44 (0)20 7383 5100

Singer Capital Markets Limited James Maxwell / Nick Donovan

+44 (0)20 3205 7500