KKV Secured Loan Fund Limited (KKVL –formerly SQN Asset Finance Income Fund Limited) has announced the board’s intention to put forward proposals for a managed wind-down of the Company, both the Ordinary Share class and the C Share class.
Background to the wind-down proposals
At an Extraordinary General Meeting on 16 July 2020, shareholders voted for the continuation of the Ordinary Share class and against the continuation of the C Share class. Following this, proposals were to be put forward for the managed wind-down of the C Share class only, with a further continuation vote to be held in respect of the Ordinary Share class in 2021.
However, the board says that, while ordinary shareholders as a whole supported continuation of the Ordinary Share class, a substantial proportion of the ordinary shareholders voted against continuation. In addition, since the EGM, KKV Investment Management Limited (the company’s portfolio manager) has raised concerns over the valuation of certain assets held within the Company’s portfolios, as announced on 6 August 2020. The board says that these two factors are likely to continue to impact the rating of the Ordinary Shares for an extended period of time. In light of this and continuing feedback from several major shareholders, both the Board and the Portfolio Manager are of the view that shareholder value is best maximised by placing the Ordinary Share class into managed wind-down alongside the C Share class.
Further announcements in due course
KKVL’s Board says that it intends to publish a circular within the coming weeks proposing a new investment policy for a managed and orderly wind-down of both share classes and amendments to the Articles of Association. If approved by shareholders, the Board will then endeavour to realise all of the investments in a manner that achieves a balance between maximising the value received from investments and making timely returns of capital to shareholders. The Board will continue to treat the Ordinary Share class and the C Share class as separate pools of capital during the managed wind-down, and there will not be a combination of the two share classes.