TIDMADIG
RNS Number : 7131W
abrdn Diversified Income and Growth
14 December 2023
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION
WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR
REGULATIONS OF THAT JURISDICTION.
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION.
14 December 2023
For Immediate Release
abrdn Diversified Income and Growth plc (the "Company")
Proposals for Managed Wind-Down of the Company
Following the Company's announcement of an enhanced distribution
programme on 26 October 2023, further detailed discussions with
shareholders have been undertaken. In the light of the feedback
received during these conversations and the entrenched discount to
net asset value ("NAV") at which the Company's shares continue to
trade, the Board has concluded that it is in the best interests of
shareholders as a whole to put forward proposals for a managed
wind-down of the Company (the "Managed Wind-Down").
Pursuant to the Managed Wind-Down, the Company proposes to
conduct an orderly realisation of its assets in a manner that seeks
to optimise the value of the Company's investments whilst
progressively returning cash to shareholders. In particular:
-- the Board expects that approximately GBP115 million would be
returned to shareholders in the first half of 2024 at, or close to,
NAV (subject to shareholder approval and the appropriate use of the
Company's distributable reserves) with further returns of cash to
follow as value is realised from the Company's private markets
portfolio in a timely and efficient manner as laid out below;
-- approximately GBP 107.3 million of the Company's private
markets portfolio (valued as at 30 November 2023) is expected to
mature between 2024 and 2027 (the "First Tranche"). It is intended
that the proceeds from the First Tranche will be returned to
shareholders in a timely manner as the investments mature;
-- the remaining GBP 81.5 million of the private markets
portfolio (valued as at 30 November 2023) is expected to mature
between 2029 and 2033 (the "Second Tranche"). As market conditions
improve, opportunistic secondary sales of Second Tranche assets
would be considered by the Company in order to realise value from
these assets in a timely manner;
-- the Company will cease making new investments (save as to
fund existing commitments and support the Managed Wind-Down as set
out below);
-- the Board will seek to reduce the Company's ongoing costs; and
-- it is intended that the Company's debt arrangements,
comprising secured bonds with a par value of c.GBP16.1 million,
will be repaid during 2024.
Implementation of the Managed Wind-Down will require shareholder
approval to amend the Company's investment objective and policy and
will also be conditional on shareholders approving the continuation
of the Company into Managed-Wind Down at the Company's annual
general meeting currently anticipated to be held on 27 February
2024. Full details of the proposals will be published in a circular
to shareholders as soon as practicable.
The Company will continue to pay its regular quarterly dividend
until such time as the change of investment objective and policy is
approved. The Board will review the level of dividend payable
thereafter.
Near term return of capital
The Company's liquid assets currently comprise approximately GBP
94 million of fixed income and credit investments, GBP51 million of
listed equities and GBP9 million of cash and cash equivalents.
Pursuant to the Managed Wind-Down, the Board intends to return the
cash generated from the sale of the Company's liquid assets
together with available cash to shareholders in the near term save
that the Company will retain sufficient funds to meet outstanding
commitments in respect of its private markets portfolio (such
commitments amounting to c.GBP41 million in total), repay the
Company's secured bonds (c.GBP18 million including the repayment
penalty) and provide for its ongoing working capital requirements
(c.GBP8.5 million). Subject to shareholder approval and the
appropriate use of the Company's distributable reserves, the Board
therefore currently expects that approximately GBP115 million will
be returned to shareholders in the first half of 2024.
The Company will seek to return this cash, and any future
returns of cash, to shareholders in an efficient and fair manner
which accounts for, among other things, the UK tax consequences for
shareholders and the composition of the Company's shareholder
register. Any return of capital pursuant to the Managed Wind-Down
will be offered to shareholders at, or close to, the underlying NAV
per share of the amount to be returned (with a discount only being
applied where appropriate to cover the costs of the return). For
the avoidance of doubt, in the light of the Managed Wind-Down
proposals, the Board does not intend to proceed with a tender offer
on the terms outlined in the announcement of 26 October 2023.
Future realisations
The Company held approximately GBP188.8 million of private
markets investments as at 30 November 2023. The First Tranche of
approximately GBP 107.3 million is expected to be realised, as the
underlying funds mature, between 2024 and 2027. The proceeds
received by the Company from the First Tranche realisations will be
progressively returned to shareholders throughout this period and
the Board will seek to do so in a timely and efficient manner. As
set out in the chart below, the Second Tranche, comprising the
Company's remaining private markets investments valued at c.GBP81.5
million, is expected to mature between 2029 and 2033:
Asset Current Expected NAV Unfunded
estimated Maturity Commitments
IRR
abrdn Andean Social Infrastructure 3.20% 2029 GBP15,024,741 GBP4,628,934
Fund I
----------- ---------- -------------- -----------------
Healthcare Royalty Partners 18.50% 2031 GBP15,681,989 GBP1,242,929
IV
----------- ---------- -------------- -----------------
SL Capital Infrastructure 8.90% 2032 GBP21,466,958 GBP2,790,193
Fund II
----------- ---------- -------------- -----------------
Bonaccord Capital Partners 17.40% 2032 GBP16,237,660 GBP3,454,256
I-A
----------- ---------- -------------- -----------------
Aberdeen Standard Secondary 35.00% 2033 GBP13,161,630 GBP11,127,767
Opportunities Fund IV
----------- ---------- -------------- -----------------
TOTAL GBP81,572,978 GBP23,244,079
----------- ---------- -------------- -----------------
The Board believes that these longer-term investments are, in
the large part, attractive, saleable assets but remains cognisant
of the fact that early disposals from its private markets portfolio
in current market conditions would necessitate a substantial
discount to their long-term realisable values, and thereby limit
the value that could be achieved for shareholders. As market
conditions improve, opportunistic secondary sales would be sought
by the Company to realise value from these assets in a timely
manner. Throughout the Managed Wind-Down the Board may also seek to
use opportunistic secondary sales from either tranche of private
markets investments to manage the Company's undrawn commitments and
optimise the level of cash that can be realised and returned to
shareholders. In considering how best to deliver value to
shareholders, the Board will also remain open-minded to takeover
and merger opportunities during the Managed Wind-Down.
Given the current position of the Company's private markets
portfolio, it is expected that the Managed Wind-Down would be in
place for three to four years or longer (depending, among other
things, on prevailing market conditions enabling the Company to
realise optimal value from the Second Tranche assets). There can be
no certainty as to the precise quantum or timing of any
realisations or returns of capital from the private markets
portfolio and, in particular, from sales of the Second Tranche
assets (which will depend on prevailing market conditions alongside
consideration of the Company's liabilities, undrawn fund
commitments and general working capital requirements).
No further investments
From the date of this announcement, the Company will not make
any new investments save as in respect of existing fund commitments
and, subject to the Company's investment policy, realised cash may
be invested in liquid cash-equivalent securities, including
short-dated corporate bonds, government bonds, cash funds or bank
cash deposits pending its return to shareholders in accordance with
the Managed Wind-Down.
Ongoing costs
The Board acknowledges the importance of monitoring the
Company's ongoing costs as the Managed Wind-Down progresses and
will continue to keep the options available to the Company under
review. In order to reduce the costs of the Company, the Board
intends to reduce the number of directors and Anna Troup has
indicated that she does not intend to stand for re-election at the
Company's annual general meeting in February 2024. The remaining
Directors would like to take this opportunity to thank Anna for her
substantial contributions to the Board. The Company is exploring
further ways in which it can reduce its costs in the context of the
Managed Wind-Down and it is also intended that the Company's
existing secured bonds will be repaid in 2024.
A circular to shareholders setting out the full details of the
proposals will be published as soon as practicable.
For further information, please contact:
abrdn Diversified Income and Growth plc
Davina Walter (Chairman) via Buchanan
Dickson Minto Advisers
Douglas Armstrong +44 (0)20 7649 6823
Buchanan
Helen Tarbet / Henry Wilson +44 (0)20 7466 5000
George Beale / Verity Parker ADIG@buchanancomms.co.uk
Important Information
This announcement is released by the Company and the information
contained within this announcement is deemed by the Company to
constitute inside information for the purposes of Article 7 of the
UK version of the EU Market Abuse Regulation (Regulation (EU)
No.596/2014) which forms part of UK law by virtue of the European
Union (Withdrawal) Act 2018, as amended. Upon the publication of
this announcement via a Regulatory Information Service, such
information is now considered to be in the public domain.
Legal Entity Identifier (LEI): 2138003QINEGCHYGW702
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END
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