LONDON, UK: The Board of VPC Specialty Lending Investments (VSL) has for a while been reviewing choices for reducing the persevering with deep low cost of the Company’s share price to Net Asset Value. The Board has taken skilled recommendation and has additionally consulted the Company’s main Shareholders. Given the present level of the Discount, the Board considers it likely that the Company would be required to suggest a 25% exit alternative following the AGM in 2023, in keeping with the dedication it made to Shareholders in 2020.
The Board and its advisers don’t believe that the 25% Exit Opportunity alone would have a lasting impact on the Discount and that it might have a potentially detrimental impact for the Company’s Shareholders.
This is since the Company would shrink in size, ensuing within the Company’s shares potentially becoming much less liquid and the ratio of charges and different prices increasing as a proportion of Net Asset Value.
After additional session with its main Shareholders, the Board has therefore decided that it would be within the best pursuits of the Company and Shareholders to place ahead formal proposals to Shareholders for a managed wind-down of the Company rather than the 25% Exit Opportunity.
The Board intends to publish a round in due course to convene a general assembly at which it will search approval from Shareholders by ordinary decision to amend the Company’s funding goal and funding policy required for a managed wind-down.
If approved by Shareholders, the Board will then endeavour to realise all of the Company’s investments in a cost-effective method that achieves a balance between maximising the worth received from investments and making well timed returns of capital to shareholders.
The Board additionally notes that on 7 December 2022, it introduced that it had received a request seeking to requisition a general assembly to consider sure changes to the Company’s funding coverage and share capital construction (the “Requisition”).
The Board has engaged with the signatories of the Requisition, being Global Value Fund Limited, Staude Capital Value Fund LP and Metage Funds Limited, and the signatories have agreed to withdraw the Requisition on the foundation that their proposals will not be necessary given the Board’s intention to recommend a managed wind-down of the Company.
Graeme Proudfoot, chairman of the Company commented: “The Board has been consistently focused on the issue of the persevering with discount, and the provisions and thresholds established in 2020 were designed to present clear measures of future performance. Two of the three efficiency thresholds have been met. The third, being the low cost measure, is not due to be assessed till the finish of March 2023. Over the final three years, Shareholders have received an annualised share price total return of 13.8% and an annualised NAV total return of 11.3% along with a dividend that has been maintained for over four years. Notwithstanding, as a Board, we have to take decisions that we really feel are within the best long-term pursuits of our shareholders, and we have decided that, rather than to shrink the size of the belief and reduce liquidity through the 25% Exit Opportunity, the higher plan of motion is for a wind down of the Company which will present a managed exit for all shareholders.”
Brendan Carroll, Co-Founder and Senior Partner of the Company’s funding manager, Victory Park Capital Advisors, LLC (“VPC”), said: “VPC has always been focused on maximizing worth for VSL shareholders and persevering with to maintain the Company’s dividend yield. Notwithstanding the Company’s strong NAV returns and constant dividend yield since inception in 2015, we acknowledge the Company’s resilient low cost and can prudently take steps to wind down VSL over the course of the approaching years. VPC’s overall enterprise continues to grow, having recently closed on over $2.4 billion in investor capital and deployed over $1 billion within the final twelve months on behalf of institutional investors across the world.”