PAX : Pacific Alliance Asia Opportunity tackles its discount
Pacific Alliance Asia Opportunity will provide a facility for selling shareholders over the next six months with the aim of narrowing the fund’s discount. $15m will be used to buy back at an 8% discount to the NAV at 30 September 2014 and $15m will be used to buy back at a 5% discount to the NAV at 31 December 2014. The pricing will be announced in mid October and mid January respectively.
The shares will be bought by the Master Fund (the underlying fund that PAX invests in).
Shareholders who want to and are able to will be able to swap their investment in PAX for an investment in Pacific Alliance Asia Opportunity Fund III, an unquoted fund investing in the Master Fund.
The Master Fund will swap the shares it buys in PAX for an investment in Fund III and the will redeem its investment in Fund III – effectively cancelling the shares.
The company also intends to carry on making two 6% tenders each year so that investors can receive a steady flow of cash from their investment in the company akin to a 12% dividend yield.
If the value of PASX shrinks below $30m the Board will ask shareholders to wind up the company.