Chenavari Capital Solutions has announced that it intends to seek shareholder approval for the extension of its investment period for up to 12 months to 31 December 2016 at an EGM scheduled for the 18 December 2015. In the Company’s prospectus, published in connection with its IPO, the Company stated that, following 31 December 2015, the Company will return to Shareholders any unencumbered cash and such cash balances as arise from time to time as a result, predominantly, of investments maturing in accordance with their terms or otherwise.
However, the Board and the Investment Adviser believe that, “the outlook for the Company’s existing portfolio and investment strategy provides for an attractive risk-adjusted return and that the pipeline of investments under review by the Investment Manager is indicative of opportunities to deploy capital in accordance with the investment policy”. The Board has therefore evaluated the Extension Proposal as an attractive alternative to the cessation of investment as provided for in the Prospectus.
If approved by Shareholders, the Extension Proposal will permit the Company, during the period from 1 January 2016 to no later than 31 December 2016, to continue to invest its cash balances from time to time and any further monies raised in accordance with its investment policy, to the extent that such cash is not required for working capital purposes or the payment of dividends in accordance with the Company’s dividend policy. Following the end of the Extended Investment Period, the Company will return to Shareholders any unencumbered cash and such cash balances as arise from time to time as a result, predominantly, of investments maturing in accordance with their terms or otherwise. The Company will not be under any obligation to sell investments before they mature in order to fund returns of cash to Shareholders, but may do so to optimise returns. The precise mechanism for any return of cash to Shareholders will depend upon the relevant factors prevailing at the time and will be at the discretion of the Board, but may include a combination of capital distributions, share repurchases and redemptions. The amount and frequency of such distributions will be at the Company’s absolute discretion.
The Extended Investment Period will cease before 31 December 2016, with immediate effect, if the Company does not 1) declare and pay, by 29 February 2016, a dividend of at least two pence per Ordinary Share in respect of the three months to 31 December 2015; and 2) declare and pay, by 31 May 2016, a dividend of at least two pence per Ordinary Share in respect of the three months to 31 March 2016.
Chenavari Capital Solutions seeks to extend investment period : CCSL