Nippon Active Value Fund (NAVF) is proposing to raise further capital “to pursue its proven model of activist investment in quoted Japanese companies” and has published proposals for a share issuance programme for up to 300 million Ordinary Shares or C Shares over the next 12 months. This programme will include an initial issue which is expected to comprise an initial placing, offer for subscription and intermediaries offer. A prospectus in relation to the proposals is expected to be published shortly. NAVF was launched in February 2020 with an IPO that raised £103 million. In the initial issue, NAVF is proposing to issue up to 150 million new Ordinary Shares or C Shares.
Benefits of the proposals
NAVF’s board have listed the following benefits that they believe the proposals will provide for Shareholders:
- the Company will be able to raise additional funds in a timely manner to enable it to take advantage of opportunities to make further investments in accordance with its investment policy;
- the Company will be able to increase its holding in portfolio companies, as well as initiating new positions, which is expected to accelerate the process of engaging with management;
- the market capitalisation of the Company will increase, helping to make the Company attractive to a wider investor base, including to those investors who have expressed a preference for investing in larger investment trusts;
- a greater number of Ordinary Shares in issue (either following an issue of Ordinary Shares or a conversion of C Shares into Ordinary Shares) should improve liquidity in the secondary market for the Ordinary Shares and make the Ordinary Shares more attractive to a wider range of investors; and
- the Company’s fixed running costs will be spread across a larger equity capital base, which should reduce the level of ongoing expenses per Ordinary Share.