Crystal Amber to begin winding down process after failing to pass continuation vote – Crystal Amber (CRS) has provided an update following the result of its 2021 annual general meeting where the resolution that the company continue as constituted received a majority of votes, but did not achieve the required 75% majority of votes cast and accordingly was not passed.
The board believes it is in the interests of shareholders as a whole for the fund to adopt a strategy of maximising capital returned to shareholders by timely disposals, including trade sales of the fund’s strategic holdings, where appropriate.
By way of background, and as announced in 2013 on the basis it was never intended that the fund would be evergreen, the fund proposed that the 2021 AGM continuation vote should be subject to an extraordinary resolution, which would require a 75% majority.
CRS has accumulated several strategic holdings: Hurricane Energy (currently 28.9% holding); Equals Group (currently 20.5% holding); Allied Minds (currently 18.2% holding); De La Rue plc (currently 9.2% holding) and Sutton Harbour (currently 12.1% holding). Given the substantial progress achieved by CRS with its activist strategy to date on these holdings, the fund expects to have realised these investments within 24 months. Within this timescale, CRS also anticipates selling its holding in Board Intelligence, an unquoted company where it has been a shareholder since 2018.
CRS has a track record of returning cash to shareholders via share buybacks and dividends: since the change to the Articles in 2013, £60m has been returned to shareholders. The fund intends to return all net proceeds from its holdings in Hurricane Energy, Allied Minds, Equals Group, De La Rue, Sutton Harbour and Board Intelligence, after providing for ongoing operational costs as necessary. It is targeting additional shareholder returns of at least £40m or 50p a share before 30 June 2022. Whilst the fund is confident that this is achievable, after consulting with a number of shareholders, it is no longer going to impose a fixed deadline but will be keeping it as a target.
The fund will not make any new investments and will only make further opportunistic investments in existing holdings where, in the view of the board and manager, such investment is considered necessary to protect the interests of shareholders and/or provide the manager with additional influence to maximise value and facilitate and accelerate an exit. Any such investment will require the prior approval of the board and will only be permitted where it is not expected to compromise the timescale for realisations.
The board also believes that it is in the interests of shareholders to incentivise the manager to maximise the realisation value of the investment portfolio in a timely manner. Accordingly, the board will be engaging with the manager to put in place a revised remuneration and incentivisation agreement, which will be conditional on shareholder approval.
CRS is pleased to declare an interim dividend of 10p pence per share in respect of the financial year ending 30 June 2022. This dividend will be payable to shareholders on the register as at 14 January 2022 with an associated ex-dividend date of 13 January 2022 and a payment date on or around 9 February 2022.
The board intends to write to shareholders in January 2022 to convene an extraordinary general meeting at which shareholders will be asked to approve the strategy set out above and the revised remuneration and incentivisation agreement with the manager.
CRS : Crystal Amber to begin winding down process after failing to pass continuation vote