Hadrian’s Wall Secured Investments’s board (HWSL) has said that further to the announcement on 9 December 2019 (we covered this here), it has concluded its strategic review and determined that the company should be put into managed wind-down with cash returned to shareholders in a timely and efficient manner.
We also discussed some of the challenges faced by HWSL over its annual results to end-June 2019, earlier in October – click here to read the story.
EGM imminent
Following the publication of a circular to shareholders within the next few weeks, the board will convene an extraordinary general meeting at which it will seek approval to amend the company’s investment objective and policy and approve any related matters necessary to facilitate a managed wind-down. HWSL goes on to say that if approved, the the board will work to realise all of the investments in a manner that achieves a balance between maximising the value received from investments and making timely returns to shareholders. With respect to timeline, the board anticipates being able to make an initial distribution to shareholders in the second quarter of 2020.
Portfolio update
Announcements made by the company on 17 December 2019 made shareholders aware that that certain of the company’s loans had their associated IFRS 9 general loss reserves increased. As noted in the NAV announcement released by the company on 10 February 2020, the board has increased the IFRS 9 general loss reserves relating to two of these previously identified loans by a total figure of £1.4m. The board advises that the borrower identified in the company’s update on 17 December 2019 continues to make progress on its capital raise. The board is in ongoing discussions with HWSL’s manager and the underlying borrowers, but adverse developments on either of these loans could expose the company to the risk of material loss.
At present the board, based upon the outcome of its ongoing strategic review and the advice of the company’s manager, the board considers that the existing reserves associated with the remainder of the loan portfolio are appropriate.
The longest dated loan in the portfolio matures in late 2023, whereas the weighted average life of the portfolio is 1.9 years. Subject to shareholders approving the managed wind-down, the board will, in seeking to maximise value from the company’s portfolio, consider asset sales if appropriate terms can be agreed.
Board to propose change of name to HWSI Realisation Fund Limited if shareholder approval for wind-down secured
Subject to shareholder approval for the managed wind-down the board has said it intends to seek approval to change the name of the company to HWSI Realisation Fund Limited.
HWSL: Board of Hadrian’s Wall Secured Investments recommends managed wind-down