TIDMPAX
RNS Number : 1948S
Pacific Alliance Asia Opp Fd Ld
22 September 2014
22 September 2014
Pacific Alliance Asia Opportunity Fund Limited
Discount Initiatives
Pacific Alliance Asia Opportunity Fund Limited ("PAX" or the
"Company") (AIM: PAX), the closed-end investment company admitted
to trading on AIM and listed feeder for Pacific Alliance Asia
Opportunity Fund L.P. (the "Master Fund"), announces the following
initiatives intended to close the discount between the Company's
market price and net asset value ("NAV") per share as well as to
provide exit opportunities for selling shareholders.
Summary of New Initiatives
Master Fund Share Purchase Program
The Master Fund will commence a program to purchase Company
shares over the course of the next six months. The purchases will
be executed by Edmond de Rothschild Securities following a one week
book build with allocations made pro-rata among selling
shareholders. The Board and the Manager believe this program will
assist in closing the discount between market price and NAV per
share, as well as provide exit opportunities for selling
shareholders and thereby help rebalance supply and demand at closer
to NAV per share.
The program will be executed by the Master Fund instead of the
Company to allow greater flexibility in the timing of the execution
of the purchases given the terms of the program which are as
follows:
-- USD15m will be used to purchase shares at an 8% discount to
the 30 September 2014 unaudited NAV per share. Pricing will be
announced mid-October 2014 along with further details of the share
purchase, including selling instructions and timing of
settlement.
-- USD15m will be used to purchase shares at a 5% discount to
the 31 December 2014 unaudited NAV per share. Pricing will be
announced mid-January 2015 along with further details of the share
purchase, including selling instructions and timing of
settlement.
If any funds allocated for a period remain available at the end
of the period, they will supplement the funds allocated for the
next period.
The Master Fund's percentage shareholding in the Company will
increase as a result of these proposed share purchases. However,
this is anticipated to be a temporary situation as the Master Fund
intends to convert its entire shareholding in the Company's shares
pursuant to the share exchange with Feeder III as described
below.
Share Exchange with Feeder III
All investors that satisfy regulatory requirements will be
allowed to exchange all or part of their quoted ordinary shares in
the Company for unquoted shares of Pacific Alliance Asia
Opportunity Fund III Limited ("Feeder III"). Feeder III is a
private feeder fund that invests in the Master Fund. Feeder III
shareholders can redeem Feeder III shares at NAV after a six month
notice period. Feeder III shareholders also can value their
investment at NAV to the extent allowed by their individual
valuation and accounting policies.
This exchange (the "Share Exchange") will take place in Q2 2015
based on the 31 March 2015 unaudited NAV of Feeder III.
A circular describing the specific details of the Share Exchange
and participation will be distributed to shareholders in late March
2015.
The Master Fund shall participate in the Share Exchange to the
full extent of its shareholding in the Company and this will result
in the Master Fund ceasing to be a shareholder in the Company. The
Master Fund shall subsequently redeem its Feeder III shares and
this will result in the Master Fund ceasing to be a shareholder in
Feeder III.
Annual 12% Yield
In addition to the two new initiatives described above,
shareholders will continue to receive an annual 12% yield based on
NAV paid by way of two 6% tender offers. The Board and the Manager
continue to believe this is an attractive income stream for
shareholders which helps close the discount between market price
and NAV per share and helps increase liquidity. The most recent 6%
tender offer was made at the 31 July 2014 unaudited NAV per share
and settled on 5 September 2014. The second 6% tender offer will be
announced in mid-February 2015. It will be made at the 28 February
2015 unaudited NAV per share and will settle in mid-April 2015.
Board Independence
Following the acquisition of shares announced by the Company on
30 May 2014, the Master Fund became a substantial shareholder of
the Company interested in approximately 27% of the Company's voting
rights. As a result, pursuant to paragraph 3.3 of the AIM Note for
Investing Companies, the Board of the Company as a whole is not
considered independent of any substantial shareholder because each
member of the Board is also a member of the board of the General
Partner of the Master Fund. However, since the Company's only asset
is an indirect interest in the Master Fund, the Board does not
expect there to be any conflict of interest between the two
entities because the interests of the two entities should be
aligned so long as the Master Fund is a substantial shareholder of
the Company.
The Board also expects this change in independence to be
temporary because the Master Fund will exchange all of its ordinary
shares in the Company for Feeder III Shares in the Share Exchange
as described above, after which it will no longer be a substantial
shareholder of the Company. Furthermore, the Master Fund has agreed
that it will not exercise its voting rights as a shareholder of the
Company on any proposal submitted by the Company to shareholders
for a vote.
The Manager stated "We believe the Master Fund is currently very
well positioned to generate attractive uncorrelated returns. The
new initiatives should help the Company's shareholders to more
fully enjoy those returns by closing the discount to NAV."
Shareholders in the Company are not required to participate in
any of these initiatives. As such, the Board and the Manager will
assess the impact of these initiatives on a regular basis, and the
Board will commit to seek shareholder approval to wind up the
Company should the NAV fall below USD30 million. These measures
should remove any shareholder concern over the Company becoming too
small, or of becoming a trapped minority, if the share purchase
program and share exchange are widely taken up.
For further information, please contact:
MANAGER: LEGAL COUNSEL:
Chris Gradel, Managing Jon Lewis, Group General
Partner Counsel
Pacific Alliance Investment PAG
Management 15/F, AIA Central
15/F, AIA Central 1 Connaught Road
1 Connaught Road Central, Hong Kong
Central, Hong Kong T: (852) 2918 0088
T: (852) 2918 0088 F: (852) 2918 0881
F: (852) 2918 0881 jlewis@pagasia.com
cgradel@pagasia.com
--------------------------------- ----------------------------
BROKER: NOMINATED ADVISER:
Hiroshi Funaki Philip Secrett
Edmond de Rothschild Securities Grant Thornton UK LLP
T: (44) 20 7845 5960 T: (44) 20 7383 5100
F: (44) 20 7845 5961 Philip.J.Secrett@uk.gt.com
funds@lcfr.co.uk
--------------------------------- ----------------------------
MEDIA RELATIONS:
Stephanie Barry
PAG
T: (852) 3719 3375
sbarry@pagasia.com
--------------------------------- ----------------------------
About Pacific Alliance Asia Opportunity Fund Limited
Pacific Alliance Asia Opportunity Fund Limited (AIM: PAX) is a
closed-end investment company with net assets of US$158.6 million
as at 31 August 2014. PAX was admitted to trading on the AIM Market
of the London Stock Exchange in September 2006 and is a feeder fund
for Pacific Alliance Asia Opportunity Fund L.P. (the "Master
Fund"). The Master Fund's investment objective is to generate
superior risk adjusted returns through investing in the most
attractive opportunities in the Asian markets. The Master Fund is
opportunistic and dynamic with respect to the strategies it employs
and invests across the capital structure in search of the best risk
adjusted returns. It pursues distressed credit, special situations,
arbitrage and origination strategies, concentrating on mispricings
rather than directional exposure.
For more information about Pacific Alliance Asia Opportunity
Fund Limited, please visit: www.pax-fund.com
Pacific Alliance Asia Opportunity Fund Limited is a member of
PAG (formerly known as Pacific Alliance Group), the Asian
alternative investment fund management group. Founded in 2002, PAG
is now one of the region's largest Asia-focused alternative
investment managers, with funds under management across Private
Equity, Real Estate and Absolute Return strategies.
PAG has a presence across Asia with over 300 staff working in
the region.
For more information about PAG, please visit:
www.pagasia.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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