Listed managed investments - Another LIC bites the dust
In this edition of the IIR LMI monthly update, we take a look at the key news for the sector in April as well as provide the key data points as at 31 March 2022. In April, another LIC announced it was looking to restructure to an unlisted unit trust to address the persistent discount to NTA.
Some of the key news items include:
WCM Global Long Short Limited (ASX: WLS) Proposes Restructure to Unlisted Trust: On 29 April 2022, WLS announced it has executed an implementation deed with Contango Funds Management Limited (CFML) and Associate Global Partners Limited for the WCM Global Long Short Fund (Managed Fund) (the “Fund”) in relation to the proposed restructure of WLS. If implemented, the restructure will result in WLS shareholders exchanging their WLS shares for units in the Fund, a newly created unlisted trust. The Fund will invest in the same underlying portfolio as WLS.
- BTI Announces Instaclustr to be Acquired by NetApp: On 8 April 2022, Bailador Technology Investments Limited (ASX: BTI) announced one of the investments in the portfolio, Instaclustr, has entered into an agreement to be acquired by NetApp. NetApp are a global cloud-led, data-centric software company that is listed on the NASDAQ. BTI increased its carrying value in Instaclustr to AUD$118m, a valuation uplift of $54m, an increase of $0.38 pre-tax NTA per share. The sale is subject to normal final adjustments and closing proceeds are subject to payment transaction costs and to exchange rate movements. Further to this, the agreement in subject to certain regulatory approval and conditions to closing. On completion of the transaction, BTI will realise its full position with proceeds expected to be received in FY22.
ECP Completes Convertible Notes Issue: On 12 April 2022, ECP Emerging Growth Limited (ASX: ECP) announced the completion of the Convertible Notes issue. ECP issued 7,569,534 listed unsecured redeemable convertible notes, raising $10.8m. 86.6% of the maximum number of Notes on offer were subscribed to. The Notes were issued at a price of $1.43 andpay a fixed interest rate of 5.50%p.a., paid quarterly until the Step Up Date of 11 April 2025. The Step Up Date is 3 years after the issue at which time the interest rate will increase to 6.50%p.a. in the event the 2 year Bank Bill Swap Rate (BBSR) is above 2.5859%. In the event the BBSR is not above this rate the interest rate will remain at 5.50%. The Notes will have a Maturity Date of 11 April 2027, at which point all outstanding Notes will be redeemed at facevalue.
WAM Completes Acquisition of WIC and OZG: During the month, WAM Capital Limited’s (ASX: WAM) acquisition of the shares of Westoz Investment Company Limited (ASX: WIC) and Ozgrowth Limited (ASX:OZG) that it did not own was approved by both shareholders and the court. OZG shareholders were issued with 0.177 WAM shares for every one OZG share held on the record date (being 13 April 2022). Based on the share price at the close of the completion announcement date, this equated to $0.40 per OZG share. WIC shareholders were issued with 0.686 WAM shares for every one WIC share held at the record date. This equated to a value $1.57 per WIC share at the close of the completion announcement date. In total, 153.7m new WAM shares were issued.
PE1 Raises $57.7m Through Rights Issue: In early April, Pengana Private Equity Trust (ASX: PE1) completed a pro-rata non-renounceable rights issue. Under the offer, eligible unitholders had the opportunity to subscribe for 1 new unit in PE1 for every five units held with unitholders able to apply for additional units under a shortfall facility. Further to this, the Responsible Entity also decided to make up part of the shortfall through the issue of new units to wholesale and sophisticated investors. PE1 raised a total of $57.7m through the issue of 37.5m units at $1.54 per unit. The issue represented a take-up rate of 77.9% of the total units on offer.
Full details can be found in the attached report.
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