Tau Capital PLC
21 September 2012
Tau Capital Plc
("the Company" or "TAU")
Appointment of new Investment Managers and Return of Capital
Following the Company's announcement dated 13
September 2012, the Company is pleased to announce that it
has entered into new investment management agreements in
respect of the Company's public equity and private
equity portfolios.
The Board of Directors has also approved the making
of an initial return of capital to shareholders
Public equities
The Company has appointed Sturgeon Capital Ltd
("Sturgeon"), of 4 Bourlet Close London W1W 7BJ,
England to act as the Investment Manager for the
Company's public equity portfolio and the convertible
bond investment with effect from 20 September 2012.
Sturgeon is a specialist manager of Central Asian
investments and it has extensive experience of the stocks
currently held by TAU.
Under the terms of this management agreement,
Sturgeon shall manage the Fund's public equity
portfolio, cash and the convertible bond investment (the
"Public Portfolio") on a discretionary basis with
the intention to dispose of the liquid portion of the
Public Portfolio within 3 months of their appointment, and
the remaining non-liquid portion within a further 3-6
months (in line with the Company's investing
policy).
Sturgeon's appointment is for a minimum of 6
months and may be terminated by either party on 3
months' notice thereafter.
In consideration for such services, TAU has agreed to pay Sturgeon the following fees:
·
a monthly management fee of an amount equal to
0.12% of the net asset value of the Public Portfolio
(calculated monthly), such fee to be a minimum of
US$375,000 in the first year (or part year if the agreement
is terminated earlier than the first anniversary);
·
a performance fee of an amount equal to 20% of
any net realisation of any public equity investment
provided that such net realisation achieves a hurdle return
of 12% per annum; and
·
a performance fee of an amount equal to 20% of
any net realisation on the convertible bond instrument
(without being required to meet any hurdle return).
The aggregate of the management and performance fees
payable to Sturgeon are capped at an absolute maximum of
US$750,000.
The initial net asset value and base costs of the
Public Portfolio for the purposes of the management and
performance fees shall be calculated as at 21 September
2012, save that this base net asset value shall not include
an amount in respect of the cash that the Company intends
to return to shareholders as announced on 13 September
2012.
The Company notes that Sturgeon is currently interested in 4,800,000 Ordinary Shares of the Company, representing approximately 2.2% of its current issued share capital.
Private equity
The Company has appointed Capital Gate Securities Limited ("Capital Gate"), of 22 Zhamakayev Street, B Almaty Kazakhstan, to advise on the two private equity investments with immediate effect. Capital Gate is a licensed securities advisor, with its principal office in Kazakhstan with extensive experience with private equity investments in the country.
Under the terms of this management agreement, Capital
Gate shall manage the Fund's investments in Stopharm
and Lucent Petroleum (the "Private Portfolio") on
a discretionary basis with the intention to dispose of such
investments within 12-24 months of their appointment (in
line with the Company's investing policy).
Capital Gate's appointment is for a period until
both investments have been disposed of, save that it may be
terminated on 3 months' notice (to expire no earlier
than 6 months from the date of appointment).
In consideration for such services, TAU has agreed to pay Capital Gate the following fees:
·
an annual fee equal to 2% of the current
aggregate net asset value of Stopharm of Lucent
Petroleum;
·
an annual fee equal to 1% of the agreed net
asset value of any other assets that the Fund may
subsequently transfer from its public equity portfolio to
Capital Gate or ask Capital Gate to manage (an
"Additional Asset");
·
a success fee equal to 15% of the amount by
which the proceeds of the sale of Stopharm or Lucent
Petroleum exceeds their current net asset value; and
·
a success fee equal to 15% of the amount by
which the proceeds of the sale of any Additional Asset
exceeds the net asset value at which such asset is
transferred to Capital Gate.
Return of capital
The Board of the Company has also decided to make an
initial return of US$0.13 per share to shareholders by way
of a tender offer. The circular setting out full details in
respect of the tender offer, specifying the number of
shares to be bought in and the repurchase price, will be
sent to shareholders shortly.
Enquiries:
Numis Securities Ltd Tel: +44 (0) 20 7260 1000
Nominated Advisor
Nick Westlake / Hugh Jonathan
Corporate Broker
Alex Ham
IOMA Fund and Investment Management Limited
Cynthia Edwards +44 (0) 1624 681381
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