Publication of Circular and Notice of EGM


 

TIDMCMAE TIDMCMAU TIDMCMAS 
 
RNS Number : 1377U 
CMA Global Hedge PCC Ltd 
08 October 2010 
 

                          CMA GLOBAL HEDGE PCC LIMITED 
 
      PUBLICATION OF CIRCULAR AND NOTICE OF EXTRAORDINARY GENERAL MEETING 
 
Following the announcement on 24 August 2010 stating that the Directors of the 
CMA Global Hedge PCC Limited (the "Company") had decided to recommend to 
Shareholders that the Company be placed into liquidation, the Company has today 
published a Circular to its Shareholders including Recommended Proposals for a 
voluntary winding-up of the Company. The Circular also includes Notices for two 
Extraordinary General Meetings of the Company to be held on 3 November 2010 and 
10 November 2010, respectively. 
 
Background to the Proposals 
 
The Company completed three redemption offers of 20 per cent. of the Company's 
issued share capital (in December 2008, March 2009, and June 2009), with more 
than 90 per cent. of Shareholders participating in all three offers. In addition 
to the initial cash payments that were distributed to redeeming Shareholders, 
the Company made additional cash distributions during 2009 and in early 2010 
from the Company's Entitlement Pools. In each of the three redemption offers, 
participating Shareholders received more than 80 per cent. of the prevailing NAV 
attributable to the relevant Shares as at the time of the redemption offer. 
 
On 27 November 2009 the Company published a circular in which Shareholders were 
offered the ability to elect either to retain an interest in a listed vehicle 
and receive realisation distributions until the Company is formally wound up or 
to receive a cash payment or payments equivalent to the realisable value of the 
proportion of the Portfolio that was attributable to their shareholding in the 
Company (described as the Cash Option in the Circular of 27 November 2009). That 
circular stated that, once such proportion of the Portfolio was realised as 
resulted in the value of the Portfolio decreasing to less than $10 million, the 
Directors would consider proposing a resolution for an immediate formal 
voluntary winding-up of the Company. The proposals were approved on 15 December 
2009 and, since that date, the Company has been operating as a listed run-off 
vehicle, with the sole objective of raising cash in the Portfolio for future 
distributions to Shareholders. 
 
In December 2009 the Company made a cash distribution to all Shareholders 
equivalent to approximately 73 per cent. of the Company's prevailing Net Asset 
Value at the time (totalling approximately $122.6 million in aggregate). 
 
Following this distribution, the Net Asset Value of the Portfolio (as at 31 
August 2010) was approximately $33.1 million, of which $14.6 million is held in 
cash. The Company's Non-Cash Assets (excluding the Entitlement Pools) now 
represent less than 5.3 per cent. of the Company's size at launch. It is 
expected to take at least three years to generate significant further liquidity 
for the Company, and potentially longer for the complete realisation of the 
Company's assets. In light of this liquidity outlook, the current size of the 
Company and its ongoing fixed costs, the Board, following discussions with the 
Manager and the Company's other advisors, has decided to recommend to 
Shareholders that the Company be placed into liquidation. 
 
Sale of the Company's Non-Cash Assets 
 
The Manager has evaluated the secondary market for the Company's Non-Cash Assets 
and has sought indicative bids for their disposal. The Board and the Manager 
believe that the Non-Cash Assets could be realised through an immediate sale in 
the secondary market, in contrast to the expectation that it will take at least 
three years before further significant liquidity can be generated for the 
Company. While it is difficult to predict accurately the value at which the 
Non-Cash Assets may be realised, Shareholders should note that the Company 
disposed of certain illiquid non-cash assets following its extraordinary general 
meeting of 15 December 2009. The price achieved represented approximately 40 
cents on the Dollar. The Board considers that the Non-Cash Assets are more 
illiquid than the assets realised in December 2009 and therefore expects that 
the value realised for the Non-Cash Assets is likely to be lower than that 
realised following the meeting of 15 December 2009. 
 
The Company proposes to realise its Non-Cash Assets in the secondary market so 
that, when the Company enters liquidation, the Portfolio consists entirely of 
cash and cash equivalents. The sale of the Non-Cash Assets will also result in 
the realization of the Non-Cash Assets attributable to the Entitlement Pools. 
 
Benefits of the Proposals 
 
As at the date of the Circular the Company has distributed the majority of its 
Net Asset Value to Shareholders.  These distributions have reduced the size of 
the Company to a level at which a voluntary winding-up is both appropriate and 
relatively inexpensive. 
 
The primary benefit of the Proposals is that they offer Shareholders the 
opportunity to realise their investment in the Company in the near future at an 
achievable price, rather than realising their investment at a future date and 
incurring market risk over this time with the Company's NAV being eroded by the 
running costs incurred over that period. 
 
The remaining Non-Cash Assets of the Portfolio are illiquid in nature, and the 
Board considers that, in light of the continued uncertainty in the financial 
markets and the fixed costs of running the Company, it is preferable to 
liquidate the Non-Cash Assets after the First EGM rather than at a later date. 
 
There is currently an active market offering the potential for the prompt 
realisation of the Company's remaining Non-Cash Assets.  The Board anticipates 
that such a realisation would be at a value representing a very substantial 
discount to the NAV attributable to those Non-Cash Assets, but that this 
represents a preferable means of realising Shareholder value than continuing the 
Company in its current situation for at least three years, with the associated 
running costs and asset valuation risk. 
 
If the proposals are approved it is expected that Shareholders will overall 
receive considerably more cash for the illiquid assets that they held in 
December 2009 than Cash Option Shareholders who opted to sell their illiquid 
assets in the secondary market on 15 December 2009. 
 
Overall, the Board believes that the Proposals will enable the Company to effect 
a cost-effective winding-up that will enable a prompt distribution of value to 
the Shareholders. 
 
The Proposals for a voluntary winding-up of the Company 
 
The proposals are: 
 
a)   to seek Shareholder approval for the secondary market sale of the Company's 
remaining illiquid hedge fund investments; 
b)   for the Company to adopt new Articles of Incorporation in order to enable 
the entitlements of the Entitlement Pool Holders to be preserved on the 
winding-up of the Company; 
c)   to cancel the admission to the Official List of the Company's Shares; and 
d)   to appoint joint liquidators and to place the Company into voluntary 
winding-up. 
 
Proposals a), b), and c) above are subject to Shareholder approval at the First 
EGM. Proposal d) is subject to Shareholder approval at the Second EGM. The 
resolution to be proposed at the Second EGM is conditional on the passing of the 
resolution at the First EGM. 
 
Cancellation of the Company's listing 
 
In connection with the Company's entry into liquidation and if the First EGM 
Resolution is approved, the Company will seek the suspension and subsequently 
the cancellation of the listing of its Shares on the Official List and their 
trading on the Main Market of the London Stock Exchange. The suspension of the 
listing is proposed to take effect at 07.30 a.m. on 10 November 2010 (being the 
morning of the Second EGM), and the cancellation of the listing is proposed to 
take effect on 08.00 a.m. on 2 December 2010. 
 
Extraordinary General Meetings 
 
The Proposals are subject to Shareholder approval. Notices convening the First 
EGM (to be held at 11.00 a.m. on 3 November 2010) and the Second EGM (to be held 
at 11.00 a.m. on 10 November 2010), both to be held at Arnold House, St. 
Julian's Avenue, St. Peter Port, Guernsey GY1 3NF, are set out in the Circular. 
 
Both the First EGM Resolution and the Liquidation Resolution are special 
resolutions and require the approval of not less than seventy five (75) per 
cent. of the Shareholders present and voting at the relevant EGM in person or by 
proxy to be passed. 
 
Expected Timetable 
 
+--------------------------------------+--------------------------+ 
| Latest time and date for receipt of  | by 11.00 a.m. on 1       | 
| the Form of Proxy for the First EGM  | November 2010            | 
+--------------------------------------+--------------------------+ 
| First EGM                            | 11.00 a.m. on 3 November | 
|                                      | 2010                     | 
+--------------------------------------+--------------------------+ 
| Announcement of the result of the    | 3 November 2010          | 
| First EGM                            |                          | 
+--------------------------------------+--------------------------+ 
| Latest time and date for receipt of  | 11.00 a.m. on 8 November | 
| the Form of Proxy for the Second EGM | 2010                     | 
+--------------------------------------+--------------------------+ 
| Suspension of the listing of the     | 07.30 a.m. on 10         | 
| Shares                               | November 2010            | 
+--------------------------------------+--------------------------+ 
| Second EGM and, if approved, the     | 11.00 a.m. on 10         | 
| appointment of the Joint Liquidators | November 2010            | 
+--------------------------------------+--------------------------+ 
| Announcement of the result of the    | 10 November 2010         | 
| Second EGM                           |                          | 
+--------------------------------------+--------------------------+ 
| Closing of the Company's register    | 6.00 p.m. on 10 November | 
| and record date for participation in | 2010                     | 
| liquidation distributions            |                          | 
+--------------------------------------+--------------------------+ 
| Initial Distribution declared        | week commencing 15       | 
|                                      | November 2010            | 
+--------------------------------------+--------------------------+ 
| Cancellation of the listing of the   | 08.00 a.m. on 2 December | 
| Shares                               | 2010                     | 
+--------------------------------------+--------------------------+ 
 
 
Unless otherwise defined, capitalised terms used in this announcement will have 
the same meaning given to such terms in the Circular of the Company dated 7 
October 2010. 
 
 
Enquiries 
 
CMA +1 441 295 5929 
Keri Wong 
 
Oriel Securities Limited  +44 (0) 20 7710 7600 
Joe Winkley 
Neil Langford 
 
 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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