LEI: 2138007S3YRY3IUU4W39

SLF Realisation Fund Limited (the "Company")

Publication of Delisting Circular, termination of AIFM appointment and Notices of Class Meetings

29 October 2024

The Company has today published a circular (the "Circular") in connection with a proposal to cancel the listing of the Company's Ordinary Shares and C Shares from the Closed Ended Investment Funds Category of the Official List of the Financial Conduct Authority and from trading on the Main Market of London Stock Exchange plc (the "Share Delistings"). The Circular contains a notice convening separate class meetings of the Ordinary Shareholders and C Shareholders to be held on 26 November 2024 at 10.30 a.m. and 10.40 a.m. respectively (the "Meetings"). A copy of the Circular will be submitted to the National Storage Mechanism and will shortly be available for inspection at: https://data.fca.org.uk/#/nsm/nationalstoragemechanism and on the Company's website at  https://www.slfrealisationfund.co.uk.

The Company also announces that it has agreed with its alternative investment fund manager ("AIFM"), FundRock Management Company (Guernsey) Limited ("FundRock") that its management contract will be terminated such that, with effect from 1 January 2025, FundRock's appointment as AIFM will be terminated and the Company shall continue as a self-manged alternative investment fund for the remainder of its wind-down period.

Further details of the Share Delistings, the change in AIFM arrangements and the Delisting Resolutions which will be put to Shareholders at the Meetings, are set out below.

Capitalised terms used and not otherwise defined in this announcement shall have the same meaning as in the Circular.

Background to and reasons for the Share DelistingS

The Company was incorporated on 28 May 2014 and registered in Guernsey as a Closed-ended Collective Investment Scheme. Its issued share capital comprises Ordinary Shares and C Shares, which are traded on the London Stock Exchange's Main Market. The Company's Ordinary Shares were admitted to the Official List on 14 July 2014. The C Shares were admitted on 12 December 2016.

On 4 December 2020, Shareholders approved a change to the Company's investment objective and policy to facilitate a managed wind-down of the Company and a realisation of its assets over time (the "Managed Wind-Down"), in order to best serve the interests of the Company's Shareholders.

The 30 June 2020 NAV, being the NAV at the time the Managed Wind-Down proposals were approved by Shareholders was 36.19p per Ordinary Share and 68.17p per C Share. Since that date, the Company has returned or announced the return of 27.5p per share in cash to the Ordinary Shareholders and 74.75p per share to the C Shareholders. The Company has therefore already returned or announced the return of circa 76 per cent. of the Ordinary NAV and 109.7 per cent. of the C Share NAV.

The Managed Wind-Down is therefore substantially completed in respect of the C Share class and a substantial part of the realisations for the Ordinary Share class has also been achieved.  There is, however, still some further value to be realised, certainly for the Ordinary Shareholders.

The Board expects the wind-down plan for the bulk of what remains which is the tail end of the portfolio to take approximately 12 months to exit, with a further tail likely to take approximately a further 12 months, although it is possible this could be done in a much shorter timeframe.

When the interim financial results were announced for the 6 month period to 31 December 2023, the Company stated that, as part of a review of costs, and due to the small size of the Company, the Board was reviewing a plan to delist the Company's Ordinary and 2016 C Shares from the London Stock Exchange. Since that time, a further 0.5p per Ordinary Share and 2.25p per C Share has been returned to shareholders.

The Company's investment portfolio now comprises:

Ordinary Share Class

Equity Holdings and other Investments

2016 C Share Class

In recent years, the Directors have explored various options regarding the realisation of remainder of the Company's Portfolio, with the objective of the Directors being to ultimately place the Company into liquidation following a divestment of the Company's holdings. This outcome would also have resulted in the cancellation of the admission of the Shares to listing on the Official List and to trading on the Main Market, upon the commencement of the liquidation of the Company.

Having analysed the existing portfolio, the Directors are of the opinion that it is most cost effective, and therefore in the best interests of the Company and its Shareholders, for the realisation of the Company's remaining holdings to be achieved by the Company's Directors, rather than by the Company's current AIFM, FundRock Management Company (Guernsey) Limited, or a liquidator. Accordingly, the Directors have given notice to terminate the appointment of FundRock Management Company (Guernsey) Limited as the Company's AIFM and propose that the Company becomes a self-managed AIF with effect from 1 January 2025.

In the context of minimising the ongoing running costs of the Company, the Directors have considered whether it remains in the best interests of the Company, and its Shareholders, for the listing of the Shares on the Official List and the trading of the Shares on the Main Market to continue.

The costs of maintaining the Company's listed company status are increasingly disproportionate to the value of the Company's portfolio, and there are identifiable cost savings that can be achieved by the Share Delistings. Consequently, the Directors consider that maintaining the listing of the Shares is no longer in the best interests of the Company or its Shareholders.

Details of the Share DelistingS

Cost savings

The Board has focused on ongoing operational costs and considered whether it is still appropriate for the Company's Shares to be admitted to the Official List and trading on the Main Market. The Board has concluded that the Company would benefit from the passing of the Delisting Resolutions to give effect to the Share Delistings due to the relatively significant ongoing annual costs associated with maintaining admission to the Official List and trading on the Main Market. The cash costs of maintaining the listing include fees paid to the Company's accountants, corporate broker, registrars and lawyers, annual fees paid to the London Stock Exchange and FCA, as well as costs relating to the release of regulatory announcements. These costs have become increasingly significant in proportional terms as the value of the Company's portfolio diminishes. The Board also believes that the Company would benefit from the simpler administration and regulatory requirements following the Share Delistings which would be more appropriate to the Company's size. The Company expects to achieve costs savings as a result of no longer being subject to the provisions of the listed company regime. It is estimated that the Company should achieve cost savings of approximately £183,500 in the financial year following the Share Delistings.

Investment Objective

The Company's investment objective as an unlisted company will continue to be the realisation of the Company's remaining assets in the portfolios attributed to the Ordinary Shares and the C Shares in a prudent manner consistent with the principles of good investment management and to return cash to shareholders in an orderly manner.

Shareholder Considerations

Shareholders should take into consideration, amongst other things, that following the Share Delistings: (a) there will be no public market for the Shares and the opportunity for Shareholders to realise their investment in the Company by selling their Shares will be limited to private secondary market sales; (b) the corporate governance, regulatory and financial reporting regime which applies to companies whose shares are admitted to the Official List and to trading on the Main Market will no longer apply (more information on regulatory considerations can be found in the paragraphs headed "Regulatory" below)); and (c) there may be taxation consequences for Shareholders as a result of the Shares no longer being admitted to the Official List and to trading on the Main Market. Shareholders should consult their own professional advisers and seek their own advice in connection with the potential consequences of the Share Delistings, including any potential changes in the tax treatment of their holding of Shares.

Corporate Structure

It is intended that, following the Share Delistings, the Company will continue to operate in accordance with the current Articles. However, the Company's corporate structure will remain under review and future proposals to amend the corporate constitution to arrangements more appropriate to an unlisted company which does not have its shares traded on the public markets may be proposed to Shareholders following the Share Delistings. Any future changes to the Articles (and also certain other general corporate matters affecting the Company in accordance with the Articles and Guernsey Companies Law) will be subject to approval by Shareholders.

Governance

The Directors intend following the Share Delistings to operate the Company's corporate governance in substantially the same manner as at present.

Financial Reporting

The Company will continue to produce an annual report and accounts. On the basis that the Share Delistings (if approved by Shareholders), will take effect on 13 December 2024, then the full year accounts to 30 June 2025 are expected to be published by 31 October 2025.

Regulatory

In conjunction with the Share Delistings, the Company intends to become a self-managed AIF with effect from 1 January 2025. The Takeover Code will continue to apply to the Company for a period of ten years from the effective date of the Share Delistings. However, following the Share Delistings:

(a)       the regulatory regime which applies solely to companies such as the Company with shares admitted to the Official List under Chapter 11 of the UK Listing Rules, and to trading on the Main Market, will no longer apply to the relevant class(es) of Shares, as detailed below;

(b)       the Company will not be subject to the disciplinary controls of the Listing Rules, under which a closed-ended investment company listed on the Official List under Chapter 11 of the UK Listing Rules at the current time:

(i)        is required to appoint a 'sponsor' for the purposes of certain corporate transactions, such as when undertaking a significant transaction or capital raising. The responsibilities of the sponsor include providing assurance to the FCA when required that the responsibilities of the listed company have been met;

(ii)       is required to obtain the prior approval of its shareholders to any material change to its published investment policy;

(iii)      is required to seek shareholder approval for a broader range of transactions including certain related party transactions (related parties including the Directors);

(iv)      there are stringent obligations with regard to a company's purchase of its own securities; and

(v)       there are specified structures and pricing limits in relation to further issues of securities;

(c)       certain institutional investor guidelines (such as those issued by the Investment Association, the Pensions and Lifetime Savings Association and the Pre-Emption Group), which give guidance on issues such as executive compensation and share-based remuneration, corporate governance, share capital management and the allotment and issue of shares on a pre-emptive or non pre-emptive basis, will not apply to the Company as the Shares will not be admitted to the Official List or to trading on the Main Market; and

(d)       certain securities laws will no longer apply to the Company, for example, the Disclosure Guidance and Transparency Rules, including in relation to notification of significant shareholdings, and the UK MAR.

Shareholder updates

Following the Share Delistings, the Company intends to maintain its website in order to communicate with Shareholders. Announcements of material information will be posted on the Company's website at https://www.slfrealisationfund.co.uk, where a facility will also be established in order to allow Shareholders to register for email updates.  The Company does not intend to maintain its Regulatory News Service facility following the  Share Delistings.

Meetings

The Directors are convening the Meetings to attend to the Delisting Resolutions.

The notices convening the Meetings are set out in the Circular. If you hold your shares in CREST, you may appoint a proxy via the CREST system. Alternatively, there paper Form of Proxy are enclosed with the Circular for use at the Meetings.

If the Ordinary Share Delisting Resolution is passed, the Board proposes to make an application to the FCA for the Ordinary Share Delisting. If the requisite percentage of Ordinary Shareholders does not approve the Ordinary Share Delisting Resolution, the Ordinary Shares will continue to be admitted to the Closed Ended Investment Funds Category of the Official List and to trading on the Main Market.

If the C Share Delisting Resolution is passed, the Board proposes to make an application to the FCA for the C Share Delisting. If the requisite percentage of C Shareholders does not approve the C Share Delisting Resolution, the C Shares will continue to be admitted to the Closed Ended Investment Funds Category of the Official List and to trading on the Main Market.

Actions to be taken by Shareholders

The Ordinary Class Meeting and the C Class Meeting will be held at the Registered Office of the Company, 1^st Floor Royal Chambers, St Julian's Avenue, St Peter Port Guernsey on 26 November 2024 at 10.30 a.m. and 10.40 a.m. respectively to approve the Delisting Resolutions.

Each Delisting Resolution will be proposed as a special resolution; this means that, for each Delisting Resolution, more than 75 per cent. of the votes cast must be in favour for the resolution to be passed.

Members only of the respective class are entitled to attend and vote at their own Meeting. Members present in person or by proxy shall upon a show of hands have one vote and on a poll shall have one vote in respect of each share of the relevant class held. In order to ensure that a quorum is present at the relevant Meeting, it is necessary for two Shareholders of the relevant class entitled to vote to be present, whether in person or by proxy.

Shareholders who hold their shares electronically may submit their votes through CREST. Alternatively, Shareholders may complete and return the Forms of Proxy provided to them, together with any power of attorney or other authority under which they are signed or a notarially certified or office copy thereof, in accordance with the instructions printed thereon to Link Group, PXS1, Central Square, 29 Wellington Street, Leeds, LS1 4DL so as to be received as soon as possible and in any event by no later than 10.30 a.m. on 22 November 2024 in relation to the blue Form of Proxy for the Ordinary Class Meeting; and 10.40 a.m. on 22 November 2024 in relation to the red Form of Proxy for the C Class Meeting.

Shareholders are requested to submit their votes through CREST or complete and return a Form of Proxy.

Recommendations

The Board considers that the Delisting Resolutions to be proposed at the Meetings are in the best interests of the Shareholders as a whole. Accordingly, the Board unanimously recommends that all Shareholders vote IN FAVOUR OF the Delisting Resolutions at the Meetings.

EXPECTED TIMETABLE

*These timings are estimated timings assuming the Delisting Resolutions are passed.

References to times in this announcement  are to London times unless otherwise stated. Any changes to the expected timetable will be notified by the Company through a Regulatory Information Service.

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The content of the website referred to in this announcement is not incorporated into, and does not form part of, this announcement.

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 "believes", "estimates", "anticipates", "expects", "intends", "may", "will", or "should" or, in each case, their negative or other variations or comparable terminology.  These forward-looking statements relate to matters that are not historical facts regarding the Company's investment strategy, financing strategies, investment performance, results of operations, financial condition, prospects and dividend policies of the Company and the instruments in which it will invest.  By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future.  Forward-looking statements are not guarantees of future performance.  There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements. These factors include, but are not limited to, changes in general market conditions, legislative or regulatory changes, changes in taxation regimes or development planning regimes, the Company's ability to invest its cash in suitable investments on a timely basis and the availability and cost of capital for future investments.

The Company expressly disclaims any obligation or undertaking to update or revise any forward-looking statements contained herein to reflect actual results or any change in the assumptions, conditions or circumstances on which any such statements are based unless required to do so by FSMA, the Listing Rules, the Prospectus Regulation Rules made under Part VI of the FSMA or the Financial Conduct Authority or other applicable laws, regulations or rules.