CED2 Close Enh Ii

TIDMCED2

RNS Number : 6232L

Close Enhanced Commodities Fund II

13 August 2013

FOR IMMEDIATE RELEASE

CLOSE ENHANCED COMMODITIES FUND II LIMITED (the "Company")

The directors regret to advise that the initial Final Entitlement announced by RNS dated 14 June 2013 of GBP1.39 was overstated. The revised Final Entitlement is GBP1.37 per share. Following discussions with the Company's investment advisor Close Brothers Asset Management (CBAM) they agreed to give up their entitlement to the part-pence surplus above GBP1.37 which means a rounding up of the Final Entitlement to GBP1.378 per share. This sum was distributed to investors on 8 July 2013.

   1.   Reason for the shortfall 

One of the five Medium Term Note providers, Italian based Mediobanca SpA have deducted 20% Italian withholding tax on the surplus excess of the GBP1 initial capital investment. This amounts to GBP712,000 being 1.57 pence per share.

At their own cost, CBAM engaged Herbert Smith Freehills, a highly respected London law firm, backed up by a similar Italian Fund Tax specialist firm of lawyers to investigate the tax deduction. The legal advice conclusion is that the deduction of Italian withholding tax has been made correctly.

Investigations continue to be made and we apologise for the delay in being able to respond more fully. The situation is complex and it will take time to unravel and determine if there is any possibility of reclaiming any or all of the Italian tax deducted.

   2.   Redemption Value Averaging Reconciliation 

Some investors have queried the monthly redemption value averaging that was announced by the Company on a monthly basis during the redemption period. Please note that the RNS releases were estimates calculated by CBAM. The actual final entitlement was always going to be calculated by JP Morgan which was the contractual binding value. In discussion with CBAM, the directors can advise that the issue relates to an "averaging" provision within the Prospectus of the Fund that provides "for the price of each MTN being aggregated of the average official closing price of each Commodity Portfolio on the last Business Day of each month in the Calculation Period". The basis of the JPM calculation was that the averaging would be conducted over a 12 month period comprising 13 month end observations. This corresponds with the original Final Entitlement issued of 139p per share (subject to the amendment given the withholding tax issue noted in 1 above). After investigation it appears that during the Calculation Period (the past 12 months) the monthly RNS price estimates were produced by CBAM using averaging over 12 month end observations.

We would point out that each RNS feed released stated "This is not a forecast nor is a reflection of the net asset value per Share and takes no account of any unforeseen circumstances and is provided for informational purposes only and should not be relied upon for investment decisions".

We would also point out that at the end of each RNS feed there is a second caveat that states "Close Investments Limited accepts no responsibility or liability for the accuracy of data sourced from such third parties. All data in this document has been procured and may have been acted upon by Close Investments Limited for its own purpose. The results are being made available to you for information only and incidentally. This data is provided purely for information purposes only and should not be relied upon".

For further information contact:

Close Brothers Asset Management

Investment Manager

Tel: 02074 264060

Anson Fund Managers Limited

Secretary

Tel: 01481 722260

13 August 2013

END OF ANNOUNCEMENT

E&OE - In transmission

This information is provided by RNS

The company news service from the London Stock Exchange

END

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