TIDMGSDO TIDMGSDE TIDMGSDU
RNS Number : 4785H
Goldman Sachs Dynamic Opportunities
27 May 2011
27 May 2011
Goldman Sachs Dynamic Opportunities Limited
Redemption Proposals for EUR and US$ Shares
Introduction
The Company is today posting a Circular to Shareholders in
connection with Redemption Proposals for EUR Shareholders and US$
Shareholders.
Details of the Redemption Proposals (including their terms and
conditions) are set out in the Circular. In summary, these are:
-- an invitation to redeem up to all the EUR Shares and US$
Shares in issue at the Record Date;
-- the creation of a Redemption Portfolio comprising (subject to
possible variation) an appropriate proportion of each investment in
the Portfolio as at a NAV Calculation Date determined by the
Directors for the purpose;
-- the realisation of investments in the Redemption Portfolio in
an orderly and timely manner; and
-- a settlement timetable for the Redemption Proposals which
reflects the receipt by the Company of cash from realisations of
investments in the Redemption Portfolio.
Portfolio liquidity
As at 23 May 2011, based on the Portfolio and its valuation as
at 31 March 2011 and the assumptions set out in the table
immediately below, the Investment Manager's current expectation is
that investments in the Portfolio could be realised in accordance
with the following indicative timetable (which should not be relied
upon for any purpose) assuming no requirement to maintain a
balanced investment portfolio during the realisation period:
Cumulative % of Portfolio
Realisation proceeds received by(1,4) expected to have been realised(2)
By 31 January 2012 62%
By 30 April 2012 72%
By 31 July 2012 84%
By 31 October 2012 91%(3)
1. The above table assumes that no Liquidity Constraints are
imposed or arise other than those of which the Investment Manager
had actual knowledge as at 23 May 2011. There may be other matters
or factors which affect the availability, amount or timing of
receipt of the proceeds of realisation of some or all of the
Company's investments, including the desire to maintain a balanced
investment portfolio and/or intervening economic events. Amounts or
percentages shown after 31 October 2012 should be considered to be
highly speculative.
2. The above table is based on valuations of the Portfolio as at
31 March 2011 and assumes valuations of investments are unchanged
from that date. Such valuations may be estimated and/or unaudited
and may be inaccurate and/or subject to conflicts of interest.
Investments may not realise the assumed cash sum and/or percentage
of such valuations at the times assumed or at all. The above table
excludes cash required to settle outstanding redemption payments
pursuant to the 2010 Redemption Offers and investments held within
the 2010 redemption portfolio.
3. It is expected that of the Company's remaining investments in
the Portfolio at 31 October 2012 approximately 2 per cent. (using
estimated valuations as at 31 March 2011) will constitute
investments which are being redeemed over an extended period and
which are expected to be finally redeemed by 31 July 2014, whilst
the remainder will constitute investments in illiquid underlying
funds that have suspended redemptions, imposed gates, invested in
illiquid special investments or have other similar liquidity
impairment (including side pockets, synthetic side pockets and/or
liquidating trusts). It is currently uncertain when those latter
investments could be realised and their current value will
fluctuate.
4. The above table assumes that Portfolio realisations are made
with effect from 30 September 2011. It also assumes realisation
proceeds are received within 30 days after the date on which
realisation becomes effective. There may be other matters or
factors which affect the availability, amount or timing of receipt
of the proceeds of realisation of some or all of the Company's
investments. The expected realisations proceeds do not include any
costs of realising investments.
5. The above table takes no account of any disposals of
investments in the Portfolio to fund repurchases or redemptions of
Shares.
The information in this table has not been subject to audit and
should be considered to be illustrative.
Assuming that the relevant proportion of each investment in the
Portfolio as at 31 March 2011 is attributed to the Redemption
Portfolio, realisations of investments in the Redemption Portfolio
created pursuant to acceptances of the Redemption Proposals could
be expected to take place in accordance with the indicative
timetable above with a pro rata amount of the cash sums referred to
being realised (on a winding up basis) but subject to the same
assumptions and caveats as mentioned above.
However, it is emphasised that there is no guarantee that the
Redemption Portfolio can be realised in accordance with the above
indicative timetable, or at all. Furthermore the Portfolio is
dynamic and, until further notice (and, in particular, until such
time as the Redemption Portfolio is created), the Investment
Manager will manage the Portfolio with a view to achieving the
Company's Investment Objective which, amongst other things, may
result in the Company being invested in less liquid investments
from time to time. It is also emphasised that the values of any
underlying investments as at the time of realisation may differ
significantly from the values used in the Circular.
Form of Redemption Proposals
The Redemption Proposals which are now being made (on the terms
and conditions set out in the Appendix to the Circular) are as
follows:
-- The Redemption Proposals are separate invitations by the
Company to Eligible Shareholders to redeem up to all of their EUR
Shares and US$ Shares. No GBP Shares are being redeemed under the
Redemption Proposals.
-- There is no maximum number of EUR Shares or US$ Shares which
may be redeemed under the Redemption Proposals. Eligible
Shareholders are being invited to tender for redemption some or all
of their EUR Shares and US$ Shares registered in their names on the
Register at the Record Date.
-- A proportion of each investment in the Portfolio (including
cash), together with other assets and liabilities, equivalent
insofar as practicable (and subject to variation as determined by
the Board) to the proportion that the aggregate NAV (at a NAV
Calculation Date determined by the Board for the purpose, which is
expected to be shortly before or after the closing of the
Redemption Proposals (the "Portfolio Split Date")) attributable to
all Shares being redeemed pursuant to the Redemption Proposals
bears to the Company's total NAV (at the Portfolio Split Date) will
be segregated (for accounting purposes only) and will constitute
the Redemption Portfolio.
-- However, in the event that acceptances of the Redemption
Proposals are very limited such that certain investments in the
Portfolio may, in the Investment Manager's view, be realised
without prejudicing the anticipated performance or balance of the
remaining Portfolio, the Board reserves the right not to create a
Redemption Portfolio but instead to realise only those investments.
There can, however, be no guarantee that this will happen even if
such acceptances were very limited.
-- However, the Board may vary or alter the composition or
amount of the investments attributed to the Redemption Portfolio in
such a manner and/or to such extent as it (in its absolute
discretion) considers appropriate.
-- Acceptances of the Redemption Proposals will be settled in
tranches as cash proceeds from realisations of investments in the
Redemption Portfolio are received by the Company. In that way,
Redeeming Shareholders will receive the value of the assets
attributable to their holding in the Company on a basis which
corresponds to the amounts realised on the redemption of
investments in the Redemption Portfolio (less costs) and on a
timetable reflecting the realisation profile of the Redemption
Portfolio. The Redemption Portfolio will be managed with a view to
realisation rather than to meeting the Company's Investment
Objective.
-- No currency hedging will take place in respect of redemption
monies outstanding. Accordingly, the proportion of the Redemption
Portfolio attributable and payable to each Redeeming Shareholder
will be fixed by reference to the proportion that the NAV of the
Redeemed Shares of that Redeeming Shareholder at the Portfolio
Split Date bears to the NAV of all the Redeemed Shares (at that
date) (all calculated in US$ and using spot currency exchange rates
at that date where relevant).
-- The Redeemed Shares will be cancelled shortly after the
closing of the Redemption Proposals. Once such Redeemed Shares have
been cancelled all Redeeming Shareholders will cease to be
Shareholders in the Company and instead will be unsecured creditors
in respect of the redemption monies outstanding from time to time.
The treatment of such Redemption Rights may vary between different
types of Redeeming Shareholders and in different jurisdictions. For
instance, such a Redemption Right may not be an eligible investment
for certain Redeeming Shareholders or may not be capable of being
held directly or indirectly by certain Redeeming Shareholders or
may not be permitted to be held through certain "wrappers",
structured products or other similar arrangements. It is the
responsibility of each Redeeming Shareholder to determine whether
or not it may hold a Redemption Right.
Possible Compulsory Redemption
In certain circumstances, as a result of redemptions pursuant to
acceptances of the relevant Redemption Proposal, the Directors may
elect (but have no obligation) to redeem the remaining Shares of
that class on a compulsory basis. However, if the Directors did not
exercise their discretion to redeem, it is possible that, by reason
of the numbers of Shares of a class remaining in issue, those
Shares may be very illiquid and/or may be delisted (and if delisted
would not be capable of being traded on the London Stock
Exchange).
However, the terms on which such a compulsory redemption may be
effected are significantly less flexible than those on which the
Redemption Proposals have been made and could, in the Board's view
(and depending upon how such compulsory redemptions were
structured), give Shareholders whose Shares were compulsorily
redeemed significant timing and/or valuation advantages over those
who accept a Redemption Proposal (and may act to the detriment of
Continuing Shareholders). Accordingly, it is the Board's current
intention that the compulsory redemption provisions of the Articles
would not be used but, instead, for any Share classes which the
Board was entitled to compulsorily redeem (or otherwise if the
Board believed it was appropriate to do so), the Board would
consider (i) making a Further Redemption Proposal for the remaining
Shares of the relevant class(es) on terms as close as possible to
the corresponding Redemption Proposal and/or (ii) permitting
holders of Shares of such class(es) to convert their Shares into
one or more Continuing Share classes by reference to one or more
additional NAV Calculation Dates.
It should be emphasised that there is no guarantee that the
Board would exercise its discretion to make any Further Redemption
Proposal to any class of Shares or offer any additional conversion
facility.
In addition, after the completion of the relevant Redemption
Proposal (and any Further Redemption Proposal if applicable) the
EUR Shares and/or US$ may be delisted by reason of the number of
Shares of that class in public hands not meeting the requirements
of the Listing Rules. If this happened, a Continuing Shareholder
holding Shares of that class would be unable to trade those Shares
on the London Stock Exchange. Even where that class of Shares
remained listed, the number of Shares of that class remaining in
issue and/or the number of holders of such Shares may be low, and
hence those Shares may be illiquid. In addition, the Continuing
Shareholders of each class of Continuing Shares will bear the costs
and expenses attributable to such class. Where the number of Shares
of that class is small, such costs and expenses may be significant
relative to the overall NAV of those Shares, and may have a
significant adverse effect on the NAV of those Shares.
Buyback Arrangements
In putting forward the 2011 Continuation Resolutions, the Board
recognised that, whilst Shareholders of one or more classes might
wish the Company to continue, some of those Shareholders might
still wish to realise part of their investment. Accordingly, the
Board will continue to give consideration to making Share
repurchases/redemptions of remaining Shares.
Such Share repurchases/redemptions may take the form of
purchases in the secondary market, one or more tender offers or one
or more reverse auction redemption offers (or a combination of some
or all of them) as determined by the Board from time to time. The
timing and extent of such purchases or redemptions and the price at
which such Shares are purchased (or redeemed) would be at the
absolute discretion of the Board. However, there is no guarantee
that the Board would exercise such discretion in whole or in part.
All purchases or redemptions would be made at NAV or below (at a
date determined by the Board for the purpose).
Expenses
The costs and expenses incurred in relation to the Redemption
Proposals (or any Further Redemption Proposal if applicable) are
currently estimated to amount to approximately US$350,000, but
excluding all costs associated with realising investments in the
Redemption Portfolio. The costs and expenses of the Redemption
Proposals (and any Further Redemption Proposal) will be deducted
from the NAV attributable to Redeeming Shareholders in calculating
the redemption amounts payable.
The actual percentage of NAV which these costs and expenses
represent will depend on the proportion of the EUR Shares and US$
Shares which are redeemed. By way of example, if there were
redemptions for 65 per cent. of the EUR Shares and US$ Shares, such
costs and expenses are expected to represent approximately 0.51 per
cent. of the NAV attributable to a Redeemed Share of each such
class (using estimated NAVs at 17 May 2011).
Conversions between Share Classes
The Company's Articles incorporate provisions enabling
Shareholders of any one class of Shares to convert all or part of
their holding into Shares of any other class as at NAV Calculation
Dates referable to March, June, September and December in each
year. Whilst notices of conversion must be given not less than 5
business days before the relevant conversion calculation date, the
actual date of conversion may be 40 business days or longer after
notice has been given and Shareholders will not be registered as
the holders of the new class of Shares until after conversion.
Once a notice to convert Shares has been given, that Shareholder
will not be able to trade in or otherwise deal with those Shares
(whether in certificated or uncertificated form) and will be unable
to accept a Redemption Proposal (or Further Redemption Proposal)
which is then open for acceptance in respect of those existing
Shares, nor will he be able to accept such proposal in respect of
new Shares arising on conversion unless he is registered as a
holder of those new Shares as at any record date set for the
purposes of eligibility to participate in that Redemption Proposal.
Given the Record Date for the Redemption Proposals, Shareholders
who elect to convert existing Shares into EUR Shares or US$ Shares
by reference to the 30 June 2011 NAV Calculation Date will be
unable to accept a Redemption Proposal for those existing Shares
(if they are EUR Shares or US$ Shares).
Furthermore the Directors have considerable discretion in
relation to the conversion mechanism. In the event that either or
both of the EUR Share or US$ Share classes are (or may be) delisted
or the number of Shares remaining in issue is small and hence the
class may be particularly illiquid (and assuming that the
compulsory redemption provisions are not exercised), the Board's
current intention is that it would suspend conversions into (but
not from) such share class(es) in the future.
Management Fees and Trail Commissions
Management and performance fees will continue to be payable by
the Company to the Investment Manager in respect of the Continuing
Portfolio on the same basis as previously, i.e. based upon the
value of the net assets in the Continuing Portfolio. Following the
creation of a Redemption Portfolio management fees will be payable
on the assets in the Redemption Portfolio at a reduced rate of 0.75
per cent. per annum and no performance fees will be payable on the
Redemption Portfolio. Other expenses of the Company will be
attributable between the Redemption Portfolio and the Continuing
Portfolio on a basis which the Board (in its absolute discretion)
believes to be fair and equitable.
Trail commissions are currently payable by the Investment
Manager to Qualifying Investors (or, in certain circumstances,
financial intermediaries) at a rate equivalent to 0.5 per cent. per
annum multiplied by the Total Assets (as at the relevant NAV
Calculation Date) attributable to the number of Shares of the
relevant class held by them at each quarter end (including Shares
acquired in the secondary market), calculated monthly and payable
quarterly in arrears. Trail commissions cease to be payable to
Qualifying Investors in respect of Shares subsequently disposed of
by such Qualifying Investors and are not payable unless those
Shares remain held at the NAV Calculation Date at the end of the
relevant quarter.
The Redeemed Shares will cease to be eligible for trail
commissions from the end of the quarter immediately preceding the
closing date for acceptances of the Redemption Proposals i.e. 31
March 2011.
Further information
Further details of the Redemption Proposals (including their
respective full terms and conditions), together with detailed
performance information for the Company, an investment review for
the period from 1 January 2011 to 31 March 2011 and an investment
outlook are set out in the Circular.
The Circular also contains further information which
Shareholders should take into consideration in deciding whether or
not to accept the relevant Redemption Proposal (or a Further
Redemption Proposal if applicable) including certain risk factors
(which are not intended to be exhaustive).
Expected Timetable
Latest time and date for receipt of 1.00 p.m. on 15 June 2011
Redemption Forms or for settlement
of TTE instructions
Redemption Proposals Record Date 5.00p.m. on 15 June 2011
Results of Redemption Proposals 16 June 2011
announced
Balance Share certificates despatched early July 2011
First settlement of Redemption Proposals during November 2011 (provisional)
consideration
All references to times are to times
in London.
Enquiries:
Robin Amer Tel: +44 (0)1481 744 000
RBC Offshore Fund Managers Limited
Niklas Ekholm Tel: +44 (0)20 7051 9270
Head of International Public Relations
Goldman Sachs Asset Management
Anisha Patel Tel: +44 (0)20 7774 2523
Media Relations
Goldman Sachs Asset Management
Stuart Klein Tel: +44 (0)20 7678 8000
RBS Hoare Govett Limited
Terms used in this announcement shall, unless the context
otherwise requires, bear the meanings given to them in the Circular
dated 27 May 2011.
A copy of the Circular will shortly be submitted to the National
Storage Mechanism and will shortly be available for inspection at:
www.Hemscott.com/nsm.do
This information is provided by RNS
The company news service from the London Stock Exchange
END
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