Dunedin Enterprise Investment Trust says its largest investment, CitySprint, has been realised with a portion of the proceeds being rolled over into a new company (“New CitySprint”).
The realisation of CitySprint values the company at £175m and generates proceeds of £26.1m for Dunedin Enterprise. This compares to a valuation at 30 September 2015 of £23.2m. The proceeds are split between capital of £22.8m and income of £3.3m. The proceeds represent a return of 2.75 times over five years on the original investment of £9.8m when taking account of income previously received.
A total of £7.3m is being rolled over into New CitySprint in partnership with LDC for an interest of 5% in New CitySprint. Thus the net cash proceeds received by Dunedin Enterprise amount to £18.8m.
In anticipation of the sale of CitySprint, the Board reviewed Dunedin Enterprise’s investment strategy and has concluded, following consultation with major shareholders, that it would be in the interests of shareholders as a whole to conduct a managed wind down of the Company. Accordingly, the Board intends to seek shareholder approval for the new strategy at the Annual General Meeting, which will be held in May 2016.
The Board expects to announce further details of the proposals in conjunction with the announcement of the Company’s annual results on 18 March 2016 and to publish a circular setting out details of the proposals for posting to shareholders along with the 2015 annual report in due course.
If the proposals are approved by shareholders, the Company will continue to meet its current commitments but no new commitments will be made. Dunedin Buyout Fund III LP (“DBF III”) still has almost two years left in its investment period. As at 18 February 2016, the Company had outstanding capital commitments to all funds of approximately £42.2m, of which DBFIII accounts for £26.7m. Taking account of the cash consideration received on the sale of CitySprint and the recent commitment to Alpha Financial Markets Consulting, cash balances total £5.3m at 18 February 2016. In addition the Company has a bank facility of £20m.
DNE : Dunedin Enterprise sells CitySprint