NSAI Newstar AB Inc

RNS Number:2763S
New Star Absolute Return Fund PCC 
14 April 2008


                   NEW STAR ABSOLUTE RETURN FUND PCC LIMITED

  (A closed-ended investment company incorporated in Guernsey with registered
 number 45060 under the provisions of The Companies (Guernsey) Law 1994 to 1996
      and the Protected Cell Companies Ordinance 1997 to 1998, as amended)


14 April 2008


Posting of circular and extraordinary general meeting


New Star Absolute Return Fund PCC Limited (the "Company") announces that a
circular convening an extraordinary general meeting was posted to Shareholders
today ("the Circular").  The Circular relates to proposals to amend the
Company's articles of association to create treasury shares, to renew the
Company's share repurchase authority and to grant the Company authority to sell
treasury shares at a price below net asset value.


Capitalised terms used and not defined in this announcement shall, unless the
context requires otherwise, bear the meaning given to them in the Circular.


Introduction and background


The Company has been granted authority to make market purchases of up to 14.99
per cent. of each Class of Share in issue. Such authority is due to expire on
the later of 16 November 2008 or the date of the annual general meeting to be
held in 2008.


The Directors believe it is desirable for the Shares to trade at a narrow
discount to Net Asset Value and that it is appropriate to use the ability to buy
back Shares at a discount to Net Asset Value as a tool to reduce the discount at
which the Shares trade relative to Net Asset Value.


The existing Share repurchase authority has been substantially exhausted as a
result of Share repurchases made by the Company in recent months.


Under the current Articles of Association, the Company does not have the ability
to hold repurchased Shares in treasury. As a consequence, Shares have to be
cancelled upon repurchase and cannot be resold.  The Directors believe that the
ability to sell Shares into the market from those held in treasury would enable
the Company to take advantage of market demand for the Shares and that it would
assist in building liquidity in the Shares.


The Proposals


Proposal 1


To date, all Shares repurchased by the Company have had to be cancelled upon
acquisition. The Directors now wish to have the option of holding repurchased
Shares in treasury, subject to a limit for each Class of 10 per cent. of the
total issued Shares of that Class at any time. Any Shares repurchased and not
resold within 1 year will be cancelled.



In order to facilitate this Proposal, certain amendments are required to be made
to the Articles of Association. The Board are proposing to introduce a new
article permitting the Company to hold any Shares purchased by it out of
distributable reserves as treasury shares, in accordance with the Treasury Share
Ordinance.



Proposal 2



Shareholder approval is now being sought to renew and extend the Company's
authority to make repurchases of up to 14.99 per cent. of each Class in issue at
the date the Resolution is passed. The timing of any repurchases would be
decided by the Board.  Any Share repurchases would be made when the Shares are
trading at a discount of 5 per cent. or more to the latest published Net Asset
Value and would be subject to normal market conditions and close periods and to
the provisions of the Purchase of Own Shares Ordinance.



Proposal 3



The Directors consider it desirable, in order to encourage liquidity in the
Shares, that the Company be authorised to sell treasury shares in the market at
a discount to the latest published Net Asset Value per Share, provided always
that such discount is no greater than the average purchase discount prevailing
at the time of sale.  For these purposes, the average purchase discount would be
the average of the discount to the then-prevailing published Net Asset Value per
Share at which each treasury share of the relevant Class was acquired.  When
treasury shares are sold or cancelled, the average purchase discount would be
adjusted using the "first in, first out" method.



In order to be able to reissue Shares held in treasury at a price less than the
relevant Net Asset Value, the Listing Rules of the CISX require the Company to
obtain the prior authorisation of the Shareholders.  The Board are therefore
proposing to table an appropriate resolution at the EGM.



Extraordinary general meeting



The extraordinary general meeting convened by the Circular will be held at
2.30pm on 8 May 2008 at Arnold House, St Julian's Avenue, St Peter Port,
Guernsey, GY1 3NF for the purpose of approving the Proposals and passing the
Resolutions.



If approved, the Proposals will take effect on the date on which the Resolutions
are passed.



Copies of the circular will be available for inspection at the registered office
of the Company, Arnold House, St Julian's Avenue, St Peter Port, Guernsey GY1
3NF and on its website 

(http://www.newstaram.com/alternative-investments/closed-end-funds/fund-centre/fund-range/absolute-return-fund/).


Enquiries


Alison Bilham, HSBC Securities Services (Guernsey) Limited

Tel: + 44 (0)1481 707213



Ravi Anand, New Star Asset Management Limited

Tel + 44 (0) 20 7225 9292



Susan Walker, KPMG Corporate Finance - nominated adviser

Tel: + 44 (0) 20 7311 1000


KPMG Corporate Finance, a division of KPMG LLP which is authorised and regulated
by the Financial Services Authority for investment business activities, is
acting for the Company as nominated adviser in relation to the matters set out
in this announcement and is not acting for any other person in relation to these
matters. KPMG Corporate Finance will not be responsible to anyone other than the
Company for providing the protections afforded to its clients or for providing
advice in relation to the contents of this announcement.


                      This information is provided by RNS
            The company news service from the London Stock Exchange
END

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