Our morning roundup sees UK private equity fund Literacy Capital issue half-year results and Riverstone Energy receive overwhelming shareholder support for a gradual wind-down.
Literacy Capital (BOOK), the £233m UK private equity fund trading on a 25% discount, says it is “rebalancing our emphasis from new investments, towards building and maximising value from our current investment portfolio, thereby generating strong cash inflows.” The company is assessing whether and when to sell interests in businesses it considers relatively mature in advance of its first return of capital to shareholders later this year. Half-year results show an underlying investment return of 5.4% in the first six months of the year although net asset value at 30 June dipped to £312.6m from £313.6m a year ago and NAV per share slipped to 519.5p from 522.6p as the result of dilution from warrants in issue. A market-wide decline in private equity transactions saw new investments fall to £10.8m from £17.8m in the first half of last year and £5.8m of cash realised from exits and refinancings down from £25m. Trinitatum and Red Sky Food Group, two new investments in the first half, had both strengthened their senior management teams and “showing encouraging potential and momentum”.
Riverstone Energy (RSE) says shareholders voted 99.7% in favour of a managed wind-down of the £217m carbon and clean energy fund at its extraordinary general meeting on Friday.
Blackstone declares its recommended 113.4p cash per share offer for Warehouse REIT (WHR) is mandatory after Tritax Big Box REIT (BBOX) declined to raise its bid on Friday and the Takeover Panel cancelled plans for an auction this week. Blackstone has 34.33% of acceptances from Warehouse shareholders.
Baillie Gifford Shin Nippon (BGS), the £343m underperforming Japanese smaller companies trust, has received court approval for the cancellation of its share premium account. The move will provide a significant pool of reserves for the potential return of capital to shareholders, either by further share buybacks, dividends or a tender offer. BGS’s lead fund manager Praveen Kumar was replaced by Brian Lum in May. The shares trade 11% below net asset value.
The Company has built up a substantial share premium account owing to high levels of share issuance in the past. This reserve is non-distributable. A special resolution will be put to Shareholders at the AGM to cancel the amount standing to the credit of the Company’s share premium account, following which an application will be made to the Scottish Court of Session to obtain its approval to the cancellation and the creation of an equivalent distributable reserve as explained in more detail in the Annual Report and Financial Statements. This will provide a significant pool of reserves which can be used in future to fund distributions including dividends, and any returns of capital, including any future tender offer and share buybacks.
Schroders Capital Global Innovation (INOV) directors Jane Tufnell, Stephen Cohen and Timothy Edwards sold £120,787 of shares in last month’s tender offer.
British Smaller Companies VCT (BSV) and British Smaller Companies VCT2 (BSC) managed by YFM Equity Partners intend to raise up to £60m, with the potential for a further £25m if there is demand, in the 2025/26 tax year.
Albion Crown VCT (CRWC), Albion Enterprise VCT (AAEV) and Albion Technology & General VCT (AATG) plan to raise a total of up to £60m, with over-allotment facilities of up to a further £30m, in 2025/26.
