RUG Renn Universal

 
TIDMRUG 
 
RENN UNIVERSAL GROWTH INVESTMENT TRUST PLC 
                                (the "Company") 
 
                             Voluntary liquidation 
 
10 October 2014 
 
On 17 April 2013, the Company changed its investment policy. The revised policy 
states that the Company "will conduct an orderly realisation of the assets of 
the Company, to be effected in a manner that seeks to achieve a balance between 
returning cash to shareholders promptly and maximising the value of the 
Company's portfolio". The Board's intention is to implement the revised policy 
and realise the full value of the Company's portfolio as soon as possible. 
 
In the Company's Annual Financial Report dated 23 June 2014 (the "Annual Report"), 
the Chairman noted that pursuant to the revised investment policy, the 
Company had returned GBP12.95 million to shareholders through a tender offer in 
March 2014, and that the remaining portfolio was concentrated in a smaller 
number of holdings. 
 
Since the date of the Annual Report, RENN Capital Group Inc. (the "Manager") 
has continued to realise assets but it has proved difficult for the Company to 
make further significant disposals as the Board has been mindful of the 
requirement to maintain a suitably diversified portfolio in order to preserve 
the Company's investment trust status. Throughout this process, the Board has 
been taking advice on the level of portfolio diversification required to avoid 
jeopardising its investment trust status and the favourable tax treatment that 
comes with it. The Annual Report indicated that, in order to continue the 
orderly realisation of assets, it was possible that the Company would have to 
enter voluntary liquidation at relatively short notice in order to preserve its 
investment trust status. Provided that the Company qualifies as an investment 
trust at the time it enters into voluntary liquidation this status will usually 
be preserved. 
 
Accordingly, based on the current degree of portfolio concentration and the 
desire for the Manager to continue to realise assets in a timely fashion, the 
Board has now determined that it is appropriate to recommend to shareholders 
that the Company enters into voluntary liquidation as soon as practicable. 
 
The Board intends to post a circular to shareholders in the next few weeks 
which will recommend the Company's voluntary liquidation and the appointment of 
liquidators. 
 
In the Annual Report, the Chairman stated that the Board expected the Manager 
to continue to make steady progress along the road to realisation with an 
expectation that the portfolio would be liquidated by March 2015. The entry 
into voluntary liquidation is intended to provide the Manager with the 
flexibility to implement the realisation of the Company's portfolio 
effectively. The Board and Manager are committed to realising the full value of 
the Company's portfolio as soon as possible and the decision to move to 
liquidation slightly earlier than originally envisaged should not impact the 
proposed realisation programme. However, the Board recognises that certain 
underlying investments are illiquid, including AnchorFree (which represents 
some 45 per cent. of the Company's total assets), and while the Manager 
continues to target a full realisation by the end of March 2015, it is possible 
that some assets may take longer to realise. 
 
Because of the restrictions on the Company's ability to dispose of assets prior 
to the liquidation becoming effective, it is not expected that the voluntary 
liquidation will involve a significant capital distribution immediately 
thereafter. However, once the Company is in liquidation, the restrictions on 
asset disposals will fall away (without jeopardising the Company's investment 
trust status) and it is expected that an initial distribution to shareholders 
will be made in early 2015 once the more liquid assets have been realised by 
the proposed liquidators. 
 
The proposed liquidators have indicated that they intend to retain the Manager 
to manage the realisation of the portfolio on the remuneration terms approved 
by shareholders to the end of March 2015 at the EGM held on 17 April 2013. In 
the event that the Company's portfolio is not fully realised by March 2015, the 
fees payable to the Manager will be renegotiated by the proposed liquidators, 
taking into account the Manager's workload and the continuing alignment of 
interests at that time. 
 
Enquiries: 
 
Andrew Barker 
Chairman, RENN Universal Growth Investment Trust PLC 
Tel: 020 8876 5667 
 
Joe Winkley 
Winterflood Investment Trusts 
Tel: 020 3100 0301 
 
 
 
END 
 

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