THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, THE REPUBLIC OF SOUTH AFRICA, JAPAN, ANY MEMBER STATE OF THE EUROPEAN ECONOMIC AREA OR ANY JURISDICTION IN WHICH IT WOULD BE UNLAWFUL TO DO SO

LEI: 213800L5751QTTVEA774

7 September 2021

Marwyn Value Investors Limited

Investment Update

Potential Settlement of VAT Reclaim

In November 2012, an underlying investment of Marwyn Value Investors LP (the "Master Fund"), Le Chameau Group plc ("LCG") (formerly Marwyn Management Partners Plc) sold its holding in Praesepe plc, a company operating in the gaming industry.

At the time of the sale there was an ongoing dispute between the gaming industry and HMRC on the principle of fiscal neutrality. The basis of the dispute was that some similar forms of gambling were treated differently for VAT purposes and test cases were pursued by The Rank Group Plc and Done Brothers (Cash Betting) Ltd.

Based on these test cases, Deloitte LLP and PricewaterhouseCoopers LLP were engaged by Praesepe plc to submit VAT reclaims to HMRC on a contingent fee basis.  Certain of these VAT reclaims relate to the period of LCG's ownership and as such, under the terms of the sale agreement, a subsidiary of LCG retained a beneficial interest in the VAT reclaims that related to the period of LCG's ownership.  The existence of this contingent VAT reclaim was disclosed in the historic financial statements of LCG which are publicly available. This contingent asset was transferred in 2020 to the Master Fund as part settlement of the outstanding loan between the LCG group and MVI LP.

The Praesepe VAT reclaims stood behind The Rank Group Plc claim ("Rank 2"). On 30 June 2021, the First-tier Tribunal ruled in favour of The Rank Group Plc and then on 25 August 2021, HMRC publicly confirmed that it will not appeal the decision made by the First-tier Tribunal.  Based on this latest development, it is now anticipated that following due process, the Praesepe VAT reclaims sitting behind the Rank 2 claim will be paid by HMRC, which is expected to result in a cash payment to the Master Fund.

No amount has previously been recognised in either the annual historic LCG financial statements, or subsequently in the Net Asset Value ("NAV") of the Master Fund attributable to the Company due to the high level of uncertainty surrounding the likelihood of any receipt. It is not anticipated that the impact of settlement of the VAT reclaims, after deduction of contingent fees, taxes and other expenses, will be materially more than 5% of the most recently published NAV of either the Company's ordinary shares or realisation shares, however, there remains no certainty over the value of the VAT reclaims that will be repaid by HMRC, nor the timing of receipt of any such VAT reclaims. No amount will be reflected in the Company's estimated NAV calculations which are reported via RNS until there is sufficient certainty over the amount receivable.

Update on Zegona Return of Capital

In May 2021, Zegona Communications plc ("Zegona") announced its intention to return £335 million to its shareholders in cash, following receipt of the proceeds from the proposed acquisition of Euskaltel by MasMovil. In August 2021, Zegona confirmed that this capital return will be effected by way of a tender offer, to be completed in October 2021 at a price of £1.535 per Zegona share. The carrying value of Zegona in the latest estimated NAV published by the Company (as at 20 August 2021) was £1.51 per share, contributing to a total ordinary share NAV of £101.7 million (£1.822 per ordinary share) and a total realisation share NAV of £8.5 million (£2.300 per realisation share). The resulting increase in Zegona's carrying value will be approximately £0.75 million attributable to the Company's ordinary shares and £0.11 million attributable to the Company's realisation shares.

Zegona shareholders are entitled to sell approximately 98.0% of their shareholding (the "Tender Offer Entitlement"). Zegona shareholders may tender more than their Tender Offer Entitlement and will be allocated an additional pro rata portion of any Tender Offer Entitlement not taken up by other shareholders.

The sale of those shares representing the Tender Offer Entitlement will result in proceeds of approximately £45.4 million attributable to the Company's ordinary shares, representing £0.812 per share and approximately £6.7 million attributable to the Company's realisation shares, representing £1.812 per share and will generate a 1.4x return for the Marwyn Funds over the life of our investment. Amounts payable by Zegona under the tender offer are due to be received by 14 October 2021.

Returns to the Company's shareholders

The amount of the tender offer proceeds and any cash that is ultimately received relating to the Praesepe VAT reclaims that is attributable to the Company's realisation shareholders will be paid to realisation shareholders in due course following receipt. 

As the Company has already returned significantly in excess of the 50% of net capital gains as set out in the Ordinary Share Distribution Policy, no cash return is due to ordinary shareholders from either the Zegona tender offer or any cash that may be received relating to the Praesepe VAT reclaim.  Any such amounts will be retained by the Master Fund to support its acquisition vehicles and take advantage of the significant opportunity presented through a strong pipeline of potential acquisition targets, in line with the fund's investment strategy.

Company enquiries:

Aztec Financial Services (Jersey) Limited

Katrina Boult / Jenny Keen

Telephone: 01534 833000

Corporate broker:

Chris Clarke / Owen Matthews

Liberum Capital Limited

Telephone: 020 3100 2200

PR enquiries:

Alex Child-Villiers / Will Barker

Temple Bar Advisory Limited

Telephone: 07795 425580 / 07827 960151

Marwyn Value Investors Limited is a closed-ended investment company on the London Stock Exchange Specialist Fund Segment - a fully regulated market for professional, institutional and sophisticated investors. Current investments through its underlying funds include Zegona Communications plc, AdvancedAdvT Limited, Marwyn Acquisition Company plc, Marwyn Acquisition Company II Limited, Marwyn Acquisition Company III Limited and the operating business of Le Chameau.

For further information see http://www.marwynvalue.com. Neither the content of the Company's website, nor the content on any website accessible from hyperlinks on its website for any other website, is incorporated into, or forms part of, this announcement nor, unless previously published by means of a recognised information service, should any such content be relied upon in reaching a decision as to whether or not to acquire, continue to hold, or dispose of, securities in the Company.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION

This announcement includes statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "expects", "believes", "estimates", "envisages", "plans", "anticipates", "targets", "aims", "continues", "expects", "intends", "hopes", "may", "will", "would", "could" or "should" or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include matters that are not facts. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. A number of factors could cause actual results and developments to differ materially from those expressed or implied by the forward-looking statements. Forward-looking statements contained in this announcement based on past trends or activities should not be taken as a representation that such trends or activities will continue in the future. Subject to any requirement under the Listing Rules, Prospectus Rules, the Disclosure Guidance and Transparency Rules or other applicable legislation or regulation, the Company does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Investors should not place undue reliance on forward-looking statements, which speak only as of the date of this announcement.