The Framlington NetNet Income split cap trust has paid back £40m in borrowings leaving it with net a...
The Framlington NetNet Income split cap trust has paid back £40m in borrowings leaving it with net assets of just £7.8m.
The income shares are now priced at 5.5p, with an NAV per share of 6p, and in the past year have been as high as 39.5p. The growth shares are now worth 0.5p and have been as high as 14p.
Paul Branigan, director at Framlington, said that all of the increase in NAV will go into income shares until these reach 40p. He said: "Growth shares are out of market warrants in the technology market at the moment".
The trust had assets totalling £100m at launch in March 2000 with £60m raised by a share issue and £40m from lendings by the Bank of Scotland. At the time half the portfolio was invested in income shares and 50% in technology.
The investment trust's board has authorised the sale of income producing stock and technology shares to repay the bank. Only 20% of the portfolio is now in technology equities.
The trust has suffered from being heavily geared in a falling market. Branigan said the situation was reviewed when it was realised that the total assets of the portfolio were not ahead of its total liabilities, so the decision was taken to de-gear and liquidate stock.
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