KKV Secured Loan Fund Limited (KKVL – formerly SQN Asset Finance Income Fund Limited) announced the Read our guide to Boards and Directors" class="glossary_term">plankthe intention to make proposals for a managed liquidation of the Company, both the category of Ordinary Shares and the investment company. The C shares have their own portfolio while the money raised by issuing them is invested. When the Board judges that the C share portfolio is sufficiently invested, the C share portfolio will be merged with the normal portfolio and the C shares converted into ordinary shares (using a formula based on their respective net asset values). The reason for doing this is to avoid the old shareholders' portfolio being diluted by a huge injection of cash and having to bear the costs of investing that cash. " class="glossary_term">C Share to classify.
Background to the phase-out proposals
At an Extraordinary General Meeting on July 16, 2020, shareholders voted for the maintenance of the ordinary share class and against the maintenance of the C share class. As a result, proposals were to be made for the managed liquidation of the C share class only, with a new continuation vote that would take place for the common share class in 2021.
However, the board of directors states that while common shareholders as a whole supported retaining the common share class, a substantial proportion of common shareholders voted against retaining. In addition, since the EGM, KKV Investment Management Limited (the wallet manager) has expressed its concerns regarding the valuation of certain assets held in the Company’s portfolios, as announced on August 6, 2020. The Board of Directors indicates that these two factors are likely to continue to impact the rating of the Company. Ordinary actions for an extended period. In light of this and the ongoing feedback from several major shareholders, the Board and the portfolio manager are of the view that shareholder value is best maximized by placing the class of common shares in liquidation managed alongside the class d. ‘C.
Further announcements in due course
The KKVL board said it intended to issue a circular in the coming weeks proposing a new investment policy for a managed and orderly liquidation of the two classes of shares and amendments to the articles of association. If approved by shareholders, the board will then endeavor to make all investments in a manner that strikes a balance between maximizing the value received from investments and timely return of capital to shareholders. The Board will continue to treat the common share class and the C share class as separate pools of capital during the managed liquidation, and there will be no combination of the two share classes.