PR Newswire
London, July 22
Dexion Absolute Limited (in Voluntary Liquidation) (the "Company")
Shareholder Update
Pursuant to the Company's circular to shareholders dated 26 February 2016 ("the Circular"), on 23 March 2016, Linda Maree Johnson and Ashley Charles Paxton were appointed as the Joint Liquidators ("the Liquidators") of the Company.
In respect of the Company's shareholding in Aurora Offshore Fund II Limited ("AOFL II"), the Company's main investment position, a full redemption request was duly submitted on behalf of the Company by the appropriate agent.
Redemption Profile
On 6 May 2016, the Liquidators received a shareholder communication from AOFL II's investment advisor, Aurora Investment Management L.L.C. ("the Investment Advisor"), notifying shareholders of AOFL II that voluntary redemptions had been suspended, including redemptions that had been requested for future redemption dates. The Investment Advisor further noted that AOFL II would return capital to its shareholders pursuant to a single schedule regardless of whether or not a shareholder had previously submitted a redemption request. As noted above, a redemption request had previously been duly submitted on behalf of the Company.
This has resulted in a change to the Company's redemption profile with respect to AOFL II and will, therefore, have a direct impact as to the quantum and timing of the Company's planned distributions to its shareholders, as had been originally outlined in the Circular.
As such rather than receiving the full redemption proceeds from AOFL II, as was envisaged per the Circular, the Liquidators understand from the Investment Advisor that the Company will receive approximately 60% of the net asset value ("NAV") of the Company's investment in AOFL II during August 2016 - this is currently estimated to be in the region of USD 70m. The Company expects to receive further balances in respect of its holdings in AOFL II during 2017.
The Liquidators have taken formal legal advice with respect to the position taken by the Investment Advisor with regard to the full redemption request submitted by the Company prior to the suspension of voluntary redemptions. Further to that advice, the Liquidators understand that they are not in a position to challenge the actions of the Investment Advisor and, as a result, are obliged to follow the distribution schedule adopted by the Investment Advisor.
Hedging
As shareholders are aware, the Company operates a single Sterling denominated share class, whilst the Company's investment in AOFL II is designated in US Dollars. The Company has historically maintained a Sterling/US Dollar hedge with respect to its holding in AOFL II.
The functions of a liquidator are restricted to the realisation of the estate assets and the distribution of the proceeds of those realisations to the entity's stakeholders. The liquidator is therefore precluded from adopting a speculative position, including the commissioning of a financial hedging instrument.
Accordingly, the Liquidators wish to inform the Company's shareholders that the current hedge will be concluded on 29 July 2016, after which point shareholders should look to obtain their own hedging coverage should they wish to continue to hedge their own individual exposure against the estimated USD 70m due in August 2016 and the subsequent balances expected in 2017.
Interim Liquidation Distribution
Upon receipt of the first distribution made by AOFL II during August 2016, the Liquidators will make an immediate interim liquidation distribution to the Company's shareholders. Following this first interim liquidation distribution, the Liquidators will further assess the Investment Advisors' proposed distribution schedule before making further distributions to ensure that the costs of making distributions are minimised.
A further shareholder announcement will be made once the timing and amount of the first interim liquidation distribution is available.
Enquiries:
The Liquidators
Linda Johnson and Ashley Paxton
Glategny Court
Glategny Esplanade
St Peter Port
Guernsey
GY1 1WR
Tel: 01481 721 000
restructuring-ci@kpmg.com
