10th Sep 2018 14:00
Dissemination of a Regulatory Announcement that contains inside information according to REGULATION (EU) No 596/2014 (MAR), transmitted by BNP Paribas Securities Services.
The issuer is solely responsible for the content of this announcement.
10 September 2018
EF REALISATION COMPANY LIMITED
Recommended Proposals for Winding Up of the Company and an In Specie Distribution of Shares Held in Lonestar Resources US Inc.
Publication of Circular and Notice of Extraordinary General Meeting
The Board of Directors (the "Board") of EF Realisation Company Limited ("EF Realisation" or the "Company") announces that a circular recommending the voluntary winding up of the Company and an in specie distribution of most of the Company's shares in Lonestar Resources US Inc. ("Lonestar") to certain larger Shareholders, specifically those holding at least 75,000 shares in the Company, (the "Shareholder Circular") has today been published and will be posted to Shareholders. The Shareholder Circular also contains notice of an Extraordinary General Meeting ("EGM") of the Company.
The Shareholder Circular will be available on the National Storage Mechanism at www.morningstar.co.uk/uk/NSM and at http://www.ecofin.co.uk/eco/uploads/officialdocs/EF_Realisation_Shareholder_Circular_10Sep2018.pdf
Extraordinary General Meeting
The winding up of the Company and an in specie distribution of the Company's shares in Lonestar to certain larger Shareholders will require Shareholders to vote in favour of Resolutions at an Extraordinary General Meeting of the Company which has been convened for 1:00 p.m. on 24 September 2018 and which will be held at BNP Paribas House, St Julian's Avenue, St Peter Port, Guernsey GY1 1WA. The notice convening the Extraordinary General Meeting and the Resolutions to be put to a vote of Shareholders are set out at the end of the Shareholder Circular.
The Board considers the Proposals to be in the best interests of the Company and Shareholders as a whole. Accordingly, the Board recommends that Shareholders vote in favour of both Resolutions to be proposed at the Extraordinary General Meeting.
Directors, parties affiliated with the Investment Manager, and the largest shareholder, whose beneficial shareholdings in EF Realisation amount in aggregate to 38.2% of EF Realisation Shares in issue, have indicated their intentions to vote in favour of each of the resolutions at the Extraordinary General Meeting.
Summary of the Proposals
Under the Company's Articles, the Board must put a resolution to wind up the Company to a vote of Shareholders by 26 September 2018, being the second anniversary of the Company's listing on the London Stock Exchange. Alternatively, prior to that date the Board could put a resolution to a vote of Shareholders extending the life of the Company by further successive periods of one year. The Board is recommending the voluntary winding up of the Company as the Company has three investments of value; a holding in a NASDAQ-listed US public company, Lonestar, which accounts for approximately 72 per cent of the value of the Company, and holdings in two unquoted investments which are in the process of being sold. As a result, the period of active management of the Company by the Investment Manager has come to an end.
If the resolutions are passed, the Company will be put into voluntary liquidation on 24 September 2018 and a liquidator will be appointed. As soon as practicable, the liquidator will arrange for a pro rata, in specie distribution of most of the Company's shares in Lonestar to Shareholders holding 75,000 or more Shares in the Company ("Qualifying Shareholders"). At the same time, the liquidator will sell those Lonestar shares attributable to Shareholders holding fewer than 75,000 Shares in the Company ("Non-Qualifying Shareholders") for cash and distribute the cash to those Shareholders. Approximately 94.5 per cent of the Company's holding of 4,174,259 shares in Lonestar is attributable to Qualifying Shareholders and 5.5 per cent to Non-Qualifying Shareholders. As a result, the Company expects to sell approximately 240,000 Lonestar shares on behalf of Non-Qualifying Shareholders.
The liquidator will continue the sale processes of the Company's two unquoted investments of value and make cash distributions to Shareholders as and when possible. The Investment Manager expects the amounts to be realised by the sale of these unquoted investments to be in line with the values at which they are carried by the Company.
Based on a Lonestar bid price per share of US$8.94 and foreign exchange rates on the Latest Practicable Date, the impact of the Proposals would be to return to Shareholders an estimated £38.7 million or 86.1 pence per Share of value. This is 11% more than the NAV of 77.75 pence per Share on the Latest Practicable Date which reflects the lower expenses that are expected to be incurred in implementing the Proposals than had been allowed for in calculating the NAV as at the Latest Practicable Date.
§ Qualifying Shareholders would receive the equivalent of 64.0 pence per Share, based on the Lonestar bid share price and the exchange rate at the Latest Practicable Date, by way of a distribution of Lonestar Shares as soon as practicable following the EGM to be held on 24 September 2018, and expected cash proceeds equivalent to 22.1 pence per Share over the course of the liquidation as the unquoted investments are realised over the following six months depending on the ultimate realised value of the investments.
§ Non-Qualifying Shareholders would receive 64.0 pence per Share in cash, based on the Lonestar bid price and the exchange rate on the Latest Practicable Date, as soon as practical following the EGM and a further 22.1 pence per Share in cash over the course of the liquidation as the unquoted investments are realised over the following six months depending on the ultimate realised value of the investments.
The liquidation of the Company is expected to be completed by 30 June 2019.
Expected timetable
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Date of the Shareholder Circular | 10 September 2018 |
Latest time and date for receipt of Forms of Proxy or transmission of CREST Proxy Instructions for the Extraordinary General Meeting | 1.00 p.m. on 20 September 2018 |
Suspension of Shares from trading on the London Stock Exchange and suspension of the listing of the Shares on the Specialist Fund Segment | 7.30 a.m. on 24 September 2018
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Extraordinary General Meeting | 1.00 p.m. on 24 September 2018 |
Register closes and Record Date for in specie distribution and Shareholder entitlements in respect of the liquidation of the Company | close of business on 24 September 2018 |
In specie distributions to Qualifying Shareholders in respect of their pro rata entitlement to Lonestar Shares | as soon as practicable after 24 September 2018
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Cash distributions to Non-Qualifying Shareholders in respect of their pro rata entitlement to Lonestar Shares | as soon as practicable after 24 September 2018
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Cancellation of listing | by 30 September 2018
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Latest time and date for receipt of DTC application forms from Qualifying Shareholders | close of business on 23 November 2018 |
This announcement does not contain all the information which is contained in the Shareholder Circular. Shareholders should read the Shareholder Circular to make informed decisions. Defined terms used in this announcement have the meanings given in the Shareholder Circular unless the context otherwise requires or they are otherwise defined in this announcement.
For further information, please contact:
BNP Paribas Securities Services +44(0) 1481 750822
Sarah Hendry
Ecofin Limited +44(0) 20 7451 2929
Christopher Rowland
Elspeth Dick
Related Shares:
EFR.L