TIDMSQN
RNS Number : 0279Q
SQN Asset Finance Income Fund Ltd
16 June 2020
16 June 2020
SQN Asset Finance Income Fund Limited
LEI: 2138007S3YRY3IUU4W39
Continuation Vote and Publication of Circular
The Board of SQN Asset Finance Income Fund Limited (the
"Company") is pleased to announce details of the 2020 Continuation
Vote and associated proposals. This follows the appointment of KKV
Investment Management Ltd ("KKV") as its portfolio manager and
International Fund Management Limited as AIFM, as announced on 8
June 2020.
A circular in connection with the Proposals (the "Circular") is
expected to be posted to Shareholders later today.
Continuation Vote
On 30 April 2020, the Company announced that it would bring
forward the triennial continuation vote from November 2020 and
propose separate continuation resolutions for each share class (the
"2020 Continuation Vote"). Furthermore, if the 2020 Continuation
Vote is passed for either share class, the Board proposes a further
continuation vote to be held no later than 31 August 2021 (for the
relevant share class/classes) (the "2021 Continuation Vote"). If
the 2021 Continuation Vote is passed for either share class, the
Board proposes that the Company will revert to a triennial
continuation vote, starting at its annual general meeting in
2024.
In the period prior to the 2021 Continuation Vote, no new
investments will be made (save for further investment in existing
assets that require additional capital or existing undrawn
commitments), with any excess cash flow from the amortisation,
repayment or realisation of assets prior to the 2021 Continuation
Vote being returned to Shareholders either through the repurchase
of Ordinary Shares or C Shares, as applicable, or, if the quantum
is material, via a return of capital, as determined by the Board at
that time.
The Company is committed, pursuant to its Articles to propose a
continuation vote during 2020. The proposed 2020 Continuation Vote
is intended to provide Shareholders with the opportunity to vote on
the immediate future of the Company shortly following the
appointment of KKV, rather than awaiting the Company's AGM in
November 2020, providing some near-term clarity, at least over the
next 12 months.
However, the Board believes that Shareholders will be better
placed to fully assess the prospects for the Company next year
providing time for KKV to focus on managing the Portfolios and
fully assess the impact of COVID-19. In addition, while any managed
wind-down would be on an orderly basis, in light of the current
market environment, the Board believes that now does not present
the optimal time for the Company to consider a managed wind-down.
The Board therefore proposes to hold the 2021 Continuation Vote
providing Shareholders the opportunity to consider the future of
the Company next year, once there is expected to be greater clarity
on the positioning of the Portfolios, enabling Shareholders to
support the 2020 Continuation Vote with the confidence that they
will be given a further opportunity to determine the future of the
Company in the near term.
Given that no reinvestment will occur prior to the 2021
Continuation Vote, should Shareholders not support continuation in
2021, the timeframe for any future managed wind-down will not have
been notably impacted.
In addition, the proposal to undertake a separate Ordinary Class
Continuation Vote and C Class Continuation Vote, allows each group
of Shareholders the opportunity to determine its own future.
Summary of the Proposals
(a) Proposed Ordinary Class Continuation Vote
If the Ordinary Class Continuation Vote is passed, KKV will
continue to manage the Ordinary Portfolio in accordance with the
existing policy, save that no new investments will be made (other
than further investment in existing assets that require additional
capital or existing undrawn commitments) prior to the 2021
Continuation Vote.
However, if the Ordinary Class Continuation Vote is rejected,
the Board will formulate proposals to be put to Ordinary
Shareholders as soon as is reasonably practicable but, in any
event, by no later than six months after the EGM, for the Ordinary
Portfolio to be placed into managed wind-down with the aim of
enabling Ordinary Shareholders to realise their holdings in the
Company. It is expected that any managed wind-down would be on an
orderly-basis.
(b) Proposed C Class Continuation Vote
If the C Class Continuation Vote is passed, KKV will continue to
manage the C Portfolio in accordance with the existing policy, save
that no new investments will be made (other than further investment
in existing assets that require additional capital or existing
undrawn commitments) prior to the 2021 Continuation Vote.
However, if the C Class Continuation Vote is rejected, the Board
will formulate proposals to be put to C Shareholders as soon as is
reasonably practicable but, in any event, by no later than six
months after the EGM, for the C Portfolio to be placed into managed
wind-down with the aim of enabling C Shareholders to realise their
holdings in the Company. It is expected that any managed wind-down
would be on an orderly-basis.
(c) Amendments to the Articles
The proposed 2020 Continuation Vote and 2021 Continuation Vote
require certain amendments to the Articles which currently provide
for a continuation vote to be proposed at every third AGM (i.e. the
next one being in November 2020). Accordingly, the Board proposes
to amend the Articles to move the date of the next continuation
vote to 2021. If the 2021 Continuation Vote is passed for either
share class, the next triennial continuation vote will be at the
annual general meeting in 2024.
In addition, the Board proposes certain other non-material
amendments that are set out in more detail in the Circular.
(d) Change of Name
In connection with the appointment of KKV and the termination of
the appointment of SQN Capital, the Board considers it appropriate
for the Company to change its name from "SQN Asset Finance Income
Fund Limited" to "KKV Secured Loan Fund Limited". Accordingly, the
Company is seeking Shareholder approval for the Change of Name.
Benefits of the Proposals
The Directors believe, having taking into account the views of a
range of major Shareholders, that the Proposals are in the best
interests of the Company and its Shareholders as a whole, and
should yield the following benefits:
-- the 2020 Continuation Vote has the effect of bringing forward
the triennial continuation vote from November 2020 to July 2020
allowing Shareholders the opportunity to determine the immediate
future of the Company, following the change of portfolio manager,
thereby providing clarity over at least the next 12 months;
-- the 2021 Continuation Vote allows Shareholders that wish to
support the 2020 Continuation Vote, the ability to do so with the
confidence that they will be given a further opportunity to
determine the future of the Company in the near term;
-- the restriction of any new investments (save for further
investment in existing assets that require additional capital or
existing undrawn commitments) seeks to ensure that should
Shareholders not support continuation in 2021, the timeframe for
any future managed wind-down will not have been notably
impacted;
-- any excess cash flow from the amortisation, repayment or
realisation of assets prior to the 2021 Continuation Vote being
used to repurchase Shares or return capital to Shareholders should,
to the extent there is excess cash flow, assist in mitigating the
discount to NAV at which the Shares are trading;
-- holding a separate Ordinary Class Continuation Vote and C
Class Continuation Vote, both in 2020 and 2021, allows each class
of Shareholder the opportunity to determine its own future;
-- the appointment of KKV affords the continuity of knowledge of
the Portfolios and key relationships with borrowers at a critical
time of economic stress;
-- a structure that provides enhanced governance within the
portfolio management and risk management functions from the
appointment of KKV as portfolio manager and IFM as AIFM;
-- a fresh perspective through the addition of new senior personnel at KKV; and
-- enhanced shareholder and board communication going forwards.
Extraordinary General Meeting
The Company is expected to publish a circular later today to
convene an Extraordinary General Meeting ("EGM"), as well separate
class meetings for holders of Ordinary Shares and C Shares.
The EGM and Class Meetings will be held at BNP Paribas House, St
Julian's Avenue, St Peter Port, Guernsey GY1 1WA on 16 July 2020
with the EGM commencing at 10:00 a.m. BST and the Class Meetings
being held thereafter.
In response to the wide spread of the Coronavirus (COVID-19), a
number of measures have been implemented in a number of
jurisdictions, including Guernsey. In particular, there is
currently a requirement that all persons arriving in Guernsey from
anywhere in the world must self-isolate for 14 days. Therefore, the
Board strongly encourages Shareholders to exercise their voting
rights by completing and submitting the Form of Proxy where
possible to avoid the need to attend the EGM or the Class Meetings
in person. The Board also strongly encourages Shareholders to
submit their Form of Proxy as early as possible to ensure that
their votes are counted at the EGM and the Class Meetings. If
Shareholders wish to attend in person they should inform the
Registrar as soon as possible so that appropriate safety
arrangements can be put in place for attendees. Any admittance to
the EGM or the Class Meetings will be subject to compliance with
any restrictions and policies of the Registrar. In light of this
request to not attend the EGM and Class Meetings, the Board shall
accept and answer any questions relating to the business being
dealt with at the EGM and Class Meetings in advance of the
meetings. Any question should be submitted by emailing
sqncosec@bnpparibas.com.
The Circular is expected to be posted to Shareholders later
today and will shortly be available on the National Storage
Mechanism website:
https://data.fca.org.uk/#/nsm/nationalstoragemechanism and on the
Company's website: https://kkvim.com/sqn-asset-finance-income-fund.
The Circular will also be made available at the Company's offices
at BNP Paribas House, St Julian's Avenue, St Peter Port, Guernsey
GY1 1WA.
Terms used in this announcement shall, unless the context
otherwise requires, bear the meanings given to them in the
Circular.
For further information please contact:
SQN Asset Finance Income Fund Limited (via the Company
Peter Niven Secretary)
KKV Investment Management Ltd
Catherine Halford Riera
Nicola Bird 020 7429 2200
BNP Paribas Securities Services S.C.A., Guernsey
Branch
Company Secretary 01481 750 853
Winterflood Securities Limited
Neil Langford 020 3100 0000
Buchanan
Charles Ryland
Henry Wilson 020 7466 5000
Prosek (PR for KKV) Pro-KKV@prosek.com
Fiona Laffan
Clare Glynn
Cautionary statements
This announcement may contain and the Company may make verbal
statements containing "forward-looking statements" with respect to
certain of the Company's plans and its current goals and
expectations relating to its future financial condition,
performance, strategic initiatives, objectives and results.
Forward-looking statements sometimes use words such as "aim",
"anticipate", "target", "expect", "estimate", "intend", "plan",
"goal", "believe", "seek", "may", "could", "outlook" or other words
of similar meaning. By their nature, all forward-looking statements
involve risk and uncertainty because they relate to future events
and circumstances which are beyond the control of the Company.
As a result, the actual future financial condition, performance
and results of the Company may differ
materially from the plans, goals and expectations set forth in
any forward-looking statements. Any
forward-looking statements made in this announcement by or on
behalf of the Company speak only as of the date they are made. The
information contained in this announcement is subject to change
without notice and except as required by applicable law or
regulation, the Company expressly disclaims any obligation or
undertaking to publish any updates or revisions to any
forward-looking statements contained in this announcement to
reflect any changes in the Company's expectations with regard
thereto or any changes in events, conditions or circumstances on
which any such statements are based.
Neither the content of the Company's website (or any other
website) nor the content of any website
accessible from hyperlinks on the Company's website (or any
other website) is incorporated into or
forms part of this announcement.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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June 16, 2020 02:00 ET (06:00 GMT)
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