RNS

1 November 2023

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION

Chelverton Growth Trust Plc

(the Company)

Recommended proposals for members' voluntary liquidation of the Company

and

Notice of General Meeting

Highlights

·    Recommended proposals for members' voluntary liquidation of the Company

·    General Meeting to be held on Monday 27 November 2023

·    Solvent distribution of certain assets in specie to Shareholders and realisation for cash of the Company's other assets, with a return of that cash (net of costs and other liabilities) to Shareholders

This summary should be read in conjunction with the full text of this announcement.

Capitalised terms used but not defined in this announcement will have the same meaning given to them in the Circular.

Introduction

In recent years, the Company's strategy has been to return cash to Shareholders via a series of tender offers.   In total, 71% of the equity (£5.4 million by value) has been returned. The Board has concluded that the reduced size of the Company and its small number of investments preclude a further tender offer, and as reported in the Company's annual report and accounts, it has for some time been investigating other options to maximise the return of funds to Shareholders. Unfortunately, this process has been necessarily drawn out due to major economic events including Brexit, Covid 19 and the Russian invasion of Ukraine. These events have served to create market uncertainty and turmoil such that only in recent months has the Board felt able to move forward with its plans within a more stable economic environment.

After careful consideration, and following discussions with the Investment Manager, the Board believes that it is in Shareholders' best interests that the Company be wound up, with the intention that there will be an orderly, solvent distribution of certain assets in specie to Shareholders and realisation for cash of the Company's other assets, with a return of that cash (net of costs and other liabilities) to Shareholders. The Board has, therefore, resolved to recommend to Shareholders that a members' voluntary liquidation of the Company be undertaken and to cancel the admission of its Shares to the premium listing category of the Official List and on the Main Market. The Board's primary aim in making this recommendation is to seek to maximise the return to Shareholders using the most efficient route possible.

The purpose of the Circular is to provide Shareholders with further details of the Proposals and to convene a General Meeting at which Shareholders will be asked to approve the Proposals. No further distributions will be paid by the Company pending the voluntary liquidation of the Company.

The General Meeting will be held at the offices of Charles Russell Speechlys LLP, 5 Fleet Place, London, EC4M 7RD at 3.00 p.m. on Monday 27 November 2023.

The business to be conducted at the General Meeting is set out in the Notice of General Meeting. Shareholders will be asked to consider and vote on the Resolution set out in the Notice. An explanation of the Resolution is given below.

Background to the Proposals

The Company was launched in November 1994 with the intention to provide capital growth.

The remaining assets of the Company of approximately £2.9 million net of creditors and other liabilities as at 23 October 2023 are equivalent to approximately 53 pence per Share. The Board and the Investment Manager are of the opinion that the Company is sub-scale and that the Company's ongoing charges ratio renders the ongoing operation of the Company uneconomic.

The Board considers that the reduced size of the Company and its small number of investments preclude a further tender offer, and it has been considering other options to return funds to Shareholders.

The Board has accordingly concluded that a members' voluntary liquidation of the Company should be undertaken, with the Company's shareholding in CEPS plc (comprising in terms of value, approximately 75% of the Company's remaining assets) being distributed in specie pro rata to Shareholders, with the Company's other investments being sold, and the proceeds used to satisfy creditors and the costs of the members' voluntary liquidation, with the remaining small cash balance being distributed to Shareholders.

CEPS plc is an AIM-listed, industrial trading holding company that combines the benefits of the financial structuring of private equity funding with the entrepreneurial drive and flair of incentivised management teams. Further information about CEPS can be found on its website www.cepsplc.com.

The Company's existing Investment Management Agreement, and the associated obligations of the parties, will terminate automatically in accordance with the terms of the relevant agreements on the Company's entry into liquidation with no further amounts payable in respect of such arrangements.

Further details of the Resolution required to be passed to allow the implementation of the Proposals are set out below.

The members' voluntary liquidation

The Board is recommending that the Company be placed into members' voluntary liquidation. This requires the approval of Shareholders at the General Meeting.

It is proposed that Milan Vuceljic and Michael Solomons, both licensed insolvency practitioners of Moorfields Advisory Limited, 82 St John Street, London ECM 4JN be appointed as joint liquidators of the Company (the "Liquidators"), and that their remuneration shall be determined in accordance with the letter of engagement between the Liquidators and the Company and as set out in in the Resolution. Further details regarding the Liquidators' proposed engagement and remuneration as agreed by the Directors can be made available on request to the Company Secretary, ISCA Administration Services Limited (01392 487056).

The winding-up of the Company will be a solvent winding-up in which it is intended that all creditors will be paid in full. The winding up will require a declaration of solvency to be sworn by the Directors. The appointment of the Liquidators becomes effective immediately upon the passing of the Resolution at the General Meeting, at which point the powers of the Directors will cease.

The Liquidators will then assume responsibility for the winding-up of the Company, including the realisation of the remaining assets of the Company, the payment of fees, costs and expenses, the discharging of the liabilities of the Company, and the distribution of the Company's surplus assets to Shareholders.

The Liquidators intend to return the majority of the remaining net asset value to Shareholders by the in specie distribution pro rata to Shareholders of the Company's shareholding in CEPS plc, the AIM listed industrial holding company in which the Company owns 5,460,301 shares. The Board believes that the Company's other assets and investments should be best realised, when appropriate to do so, given their size and illiquidity, and this is a policy which the Company have been pursuing. The net proceeds of the realisation of the Company's assets will be distributed to Shareholders after the Company's outstanding liabilities and the costs of implementing the Proposals, including the Liquidators' fees, have been met. The shares of the Company have historically traded at steep discount to the asset value of the Company and this strategy should enable higher value to be reflected for Shareholders, by removal of the future costs of the running the Company and the distribution of net cash and the direct ownership of shares in CEPS plc.

In order to facilitate the implementation of the Proposals, the Shares will be suspended from listing on the Official List and from trading on the London Stock Exchange with effect from 7.30 a.m. on Monday 27 November 2023, being the date of the General Meeting.

If the Resolution is subsequently passed at the General Meeting, this will also result in the cancellation of the listing of the Shares on the Official List and the Shares ceasing to trade on the London Stock Exchange. It is expected that the cancellation of listing and trading would take effect from 8.00 a.m. on Tuesday 28 November 2023.

Distributions to Shareholders

Assuming the Resolution is passed, the Liquidators expect to make an initial in specie distribution pro rata to Shareholders of the Company's shares in CEPS plc, the AIM listed industrial holding company in which the Company owns 5,460,301 shares. Because David Horner and his family are currently beneficially interested in 6,299,000 ordinary shares in CEPS plc (representing 29.99% of the issued share capital of that company), any increase in that family shareholding may have consequences under The Takeover Code, which is currently being addressed by CEPS plc and the Horner family. This will not delay any distribution by the Liquidators.

The Liquidators will retain sufficient funds in the liquidation to meet the current, future and contingent liabilities of the Company, including the costs and expenses (inclusive of VAT, if applicable) of the liquidation not already paid at the point of liquidation.

Once the liquidators have satisfied the claims of creditors of the Company and paid the costs and expenses of the liquidation, it is expected that the Liquidators will make one final cash distribution to Shareholders, currently expected to be approximately 5 pence per Share.

All Shareholders on the Register as at 6.00 p.m. on Friday 24 November 2023 will be entitled to any distributions made during the course of the liquidation.

In order to comply with the Company's obligations under the UK's domestic and international sanctions regimes, no distribution made pursuant to the implementation of the Proposals will be paid to a Sanctions Restricted Person.

Once in liquidation, the Company will not make any further investments.

Suspension and cancellation of admission of the Shares to trading on the Main Market

The register will be closed at 6.00 p.m. on Friday 24 November 2023 and the Shares will be disabled in CREST at the start of business on Monday 27 November 2023. Accordingly, to be valid, all transfers must be lodged before 6.00 p.m. on Friday 24 November 2023. Application will be made to the FCA for suspension of listing of the Shares on the Official List and application will be made to the London Stock Exchange for suspension of trading in the Shares, in each case at 7.30 a.m. on Monday 27 November 2023. The last day for dealings in the Shares on the London Stock Exchange on a normal rolling two-day settlement basis will be Wednesday 22 November 2023. After Wednesday 22 November 2023, dealings should be for cash settlement only and will be registered in the normal way if the transfer, accompanied by the documents of title, is received by the Registrars by close of business on Friday 24 November 2023. The record date, being the date for determining which Shareholders are entitled to receive liquidation distributions, is close of business on 24 November 2023.

Transfers received after the time specified above will be returned to the person lodging them and, if the Resolution relating to the Proposals is passed, the original holder will receive any proceeds from distributions made by the Liquidators.

If the Resolution relating to the Proposals is passed, the Company will make applications for the cancellation of the admission of the Shares to listing on the Official List and to trading on the Main Market following the General Meeting with the cancellations expected to take effect at 8 a.m. on Tuesday 28 November 2023.

After the liquidation of the Company and the making of the final distribution to Shareholders (if any), existing certifications in respect of the Shares will cease to be of value and any existing credit of the Shares in any stock account in CREST will be redundant.

Summary of the Resolution to be proposed at the General Meeting

The implementation of the Proposals will require Shareholders to vote in favour of the Resolution to be proposed at the General Meeting.

Resolution

The Resolution is for the approval of the Company being wound-up voluntarily and the appointment of the Liquidators for the purpose of the winding-up. It also grants the Liquidators authority to make distributions in specie and in cash to the Shareholders (after payment of the Company's liabilities and after deducting the costs of implementation of the Company's winding-up), in proportion to their holdings of Shares in accordance with the provisions of the Articles. It also determines the remuneration of the Liquidators by reference to the engagement letter signed by the Company with Moorfields Advisory Limited and in the Resolution.

The Resolution will be proposed as a special resolution. A special resolution requires a majority of at least 75 per cent. of votes cast by Shareholders to be cast in favour, in order for it to be passed.

If the Resolution is not passed at the General Meeting, the Company shall continue in operation until other proposals can be put forward. As noted above, the Board and the Investment Manager are of the opinion that the Company is sub-scale and that the Company's ongoing charges ratio renders the ongoing operation of the Company uneconomic.

Expected Timetable of Principal Events

                                                2023

Enquiries

David Horner                                                                                                         01225 483030

Chelverton Asset Management Limited

dah@chelvertonam.com