The board of Framlington NetNet has put forward proposals for the full wind-up of the trust, with ne...
The board of Framlington NetNet has put forward proposals for the full wind-up of the trust, with net assets having dropped to £5.7m from its £100m size at launch.
The board believes that given the company's current size and present market conditions it is unlikely to be able to raise further funds, or to merge with another large fund, on favourable terms.
The board is therefore proposing that the business of the company should be wound up and that the company should be placed into members' voluntary liquidation. A circular convening an EGM of the company has been posted to shareholders.
The split cap trust was launched in March 2000 at the height of the technology boom, raising £60m on top of £40m borrowings, making it a £100m trust, with originally 50% of the portfolio invested in technology shares and 50% in income.
The trust reorganised its share capital in June 2001 and amended its investment objective and policy as a consequence of the fall in world markets. In March 2001 the board repaid its £40m debt, effectively cutting the trust's size down to £8m.
The board said current negative market conditions have taken a toll on the value of the company's portfolio, but that this would have been worse if the company had not decided to remove the gearing in March by repaying its debt.
The EGM will be held on 19 November 2001, with de-listing on any vote in favour of liquidation set for 20 November. It is currently expected that, following the sale of the company's portfolio, the liquidators should be able to make a first distribution to shareholders representing in excess of 90% of the company's NAV, with the liquidators likely to retain £100,000 for contingencies..
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