Publication of a Circular
CVC CREDIT PARTNERS EUROPEAN OPPORTUNITIES LIMITED
(a closed-ended investment company incorporated in Jersey with registration number 112635)
Registered Office: IFC 1, The Esplanade, St Helier, Jersey, JE1 4BP
25 October 2018
Publication of a circular
The Board has today published a circular (the "Circular") convening an extraordinary general meeting (the "EGM") in connection with the renewal of the Board's authority to issue shares in the capital of the Company (the "Shares") on a non-pre-emptive basis, both in respect of a general issuance authority and in respect of up to 500 million Shares to be issued pursuant to a placing programme (the "Placing Programme") to be launched by the Company in due course.
Capitalised terms used in this announcement shall, unless the context otherwise requires, bear the meanings given to them in the Circular.
In the last 12 months, the Company has sold 49,593,233 Shares out of treasury, partly to satisfy ongoing demand and to manage the premium at which the Shares trade, and partly through strategic placings to raise capital for new investments. Given the continuing demand for the Shares, and the rate at which the Company has been issuing Shares out of treasury, the Company is already approaching the limit on the Directors' authority to issue Shares on a non-pre-emptive basis that was granted by the Shareholders at the 2018 AGM.
The Directors believe that it is in the Company's interests that authority be granted to the Directors to issue further Shares on a non-pre-emptive basis. Such authority would enable the Directors to meet the ongoing demand for the Shares and to realise the Board's strategic objective to increase the Company's asset base over time, to the benefit of all Shareholders.
Accordingly, the Board is putting forward proposals to Shareholders to disapply the pre-emption rights contained in the Articles both generally, with respect to a limited number of Shares, and specifically, for the purposes of a Placing Programme to be launched by the Company in due course (the "Proposals").
The Proposals comprise: (i) renewing the Board's general authority to issue, on a non-pre-emptive basis, up to such number of Shares that represents 10 per cent. of the Company's issued share capital as at 16 November 2018 (being the date of the EGM), such authority to have effect until the conclusion of the Company's 2019 AGM (the "General Authority"); and (ii) granting the Board specific authority to issue, on a non-pre-emptive basis, up to 500 million New Shares under the Placing Programme, such authority being in addition to the General Authority and to have effect for the duration of the Placing Programme (being the period commencing on the date on which the Prospectus is published and ending on the earlier of: (i) the date that is twelve months after that date; or (ii) the date on which the maximum number of New Shares has been issued under the Placing Programme) (the "Specific Authority" and, together with the General Authority, the "Authorities")). If the Specific Authority is granted, the Company expects to publish the Prospectus in connection with the Placing Programme around the end of November 2018. For the purposes of this announcement, a reference to "issuing Shares" is to be taken to include selling Shares out of treasury.
The Company is therefore convening an extraordinary general meeting to seek approval from Shareholders to disapply pre-emption rights in relation to the issue of Shares up to the number of Shares specified in the Authorities. The EGM is to be held at 7 Bond Street, St. Helier, Jersey JE2 3NP. The EGM will be held at 10:00 a.m. on 16 November 2018.
Benefits of the Proposals
The Directors believe that the Proposals should yield the following principal benefits:
• greater scope to invest and, accordingly, enable the Investment Vehicle Manager to develop and further diversify the Investment Vehicle's portfolio;
• provide the Company with the ability to raise additional capital so that it is able to take advantage of investment opportunities as and when they arise in the future;
• maintain the Company's ability to issue Shares to manage better the premium at which the Shares trade to their Net Asset Values per Share from time to time;
• potential to enhance the Net Asset Values per Share of Existing Shares through new issuance at a premium to Net Asset Values per Share, after the costs related to the issuance have been deducted;
• diversifying and growing the Company's Shareholder base which, in turn, may generate greater liquidity in the Shares; and
• a reduction of the total expense ratio per Share by spreading the Company's fixed running costs over a larger capital base.
Further information on the Proposals is included at the end of this announcement.
The anticipated dates and sequence of events relating to the implementation of the Proposals are set out below:
Publication of the Circular
25 October 2018
Record date for participation and voting at the EGM
Close of business on 14 November 2018
Latest time and date for the receipt of the Proxy Appointment for the EGM*
10:00 a.m. on 14 November 2018
Extraordinary General Meeting
10:00 a.m. on 16 November 2018
Publication of the Prospectus and Placing Programme opens
expected to be around the end of November 2018
Placing Programme closes
the earlier of the date on which the maximum number of New Shares has been issued under the Placing Programme or the date that is twelve months from the date of publication of the Prospectus
Each of the times and dates in the expected timetable of events may be adjusted at the Company's discretion. If any of the above times and/or dates change, the revised time(s) and/or date(s) will be notified to Shareholders by an announcement through an RIS provider and any such announcement will be placed on the Company's website at www.ccpeol.com.
All references to times are to London times.
* Please note that the latest time for receipt of the Proxy Appointment in respect of the EGM is 48 hours (excluding any part of a day which is not a Business Day) prior to the time allotted for the EGM.
The Circular will shortly be available on the Company's website at www.ccpeol.com and on the National Storage Mechanism at http://www.morningstar.co.uk/uk/NSM. The Circular will also be made available at the registered office of the Company at IFC 1, The Esplanade, St Helier, Jersey, JE1 4BP.
CVC Credit Partners European Opportunities Limited
+44 1534 625 522
Winterflood Securities Limited
Joe Winkley/Neil Morgan
+44 20 3100 0000
CVC Credit Partners European Opportunities Limited is regulated by the Jersey Financial Services Commission
A copy of this announcement will be available for inspection, subject to certain restrictions relating to persons resident in restricted jurisdictions, on the Company's website at www.ccpeol.com.
Further information on the Proposals
The General Authority
At the 2018 AGM, Shareholders granted the Directors authority to allot and issue, on a non-pre-emptive basis, up to 42,619,785 Shares (being equivalent to approximately 10 per cent. of the issued share capital of the Company at that time) (the "2018 AGM Authority"). The 2018 AGM Authority was granted for the period until the conclusion of the 2019 AGM.
Since the 2018 AGM, the Sterling Shares have traded at an average premium to the Net Asset Value per Sterling Share of 0.62 per cent. and the Euro Shares have traded at an average premium to the Net Asset Value per Euro Share of 0.93 per cent. Such premiums are the result of ongoing demand for the Shares from investors. To satisfy this demand, the Company has sold 36,071,791 Sterling Shares and 3,996,442 Euro Shares out of treasury in the period up to 23 October 2018 (being the latest practicable date prior to the publication of the Circular). If this rate of issuance were to continue, the maximum number of Shares the Directors are able to issue pursuant to the 2018 AGM Authority will soon be reached.
In the light of the continuing demand for the Shares, and having regard to the benefits of growing the Company's asset base, the Board is seeking further authority from its Shareholders generally to disapply pre-emption rights in relation to the issue of such number of Shares as represents 10 per cent of the Shares in issue (excluding any Shares held in treasury) as at the date of the EGM.
The Company currently holds 20,855,307 Sterling Shares and 6,003,583 Euro Shares in treasury. If the General Authority is granted, it is the Board's intention to make use of such authority to sell Shares from treasury to the extent available, or to issue New Shares to the extent permitted under applicable law, in each case on a non-pre-emptive basis, to meet demand until such time as the Placing Programme commences. Once the Placing Programme has commenced, the Board may issue New Shares under the Placing Programme.
The disapplication of pre-emption rights for the purposes of the General Authority is proposed through Resolution 1, which, being a renewal of the 2018 AGM Authority, is being proposed as a Special Resolution.
The Specific Authority
In addition to premium management, the Directors would also intend to use the Placing Programme to realise their strategic objective to increase the Company's asset base over time, which the Directors consider would be beneficial to all Shareholders.
The Company's investment policy is to pursue its investment objective through investing in the Investment Vehicle (which is a compartment of CECO). The Directors intend to invest the net proceeds of any Placing under the Placing Programme, in accordance with the Company's investment policy, directly into the Investment Vehicle. In the case of a Placing of C Shares, the Company will invest the net proceeds of any Placing under the Placing Programme directly into the separate compartment of CECO pending the conversion of the C Shares into Ordinary Shares.
The Specific Authority sought at the EGM is in addition to the General Authority and, if approved by the Shareholders at the EGM, will allow the Company to disapply the pre-emption rights contained in the Articles in respect of up to 500 million New Shares, such disapplication to have effect for the duration of the Placing Programme (being the period commencing on the date on which the Prospectus is published and ending on the earlier of: (i) the date that is twelve months after that date; or (ii) the date on which the maximum number of New Shares has been issued under the Placing Programme). As at the date of the Circular, the number of New Shares the Company would be able to issue pursuant to the Placing Programme equates to approximately 108 per cent. of the Shares in issue (excluding Shares held in treasury).
The Placing Programme is conditional on the granting of the Specific Authority.
The disapplication of pre-emption rights for the purpose of the Specific Authority is proposed through Resolution 2, which is being proposed as an Extraordinary Resolution.
If Resolution 2 is not passed, the Company will not proceed with the Placing Programme.
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