ANNOUNCEMENT FOLLOWING HALLMARQ DISPOSAL
Seneca Growth Capital VCT Plc
Statement regarding Disposal of Investment
Seneca Growth Capital VCT Plc (the "Company") is pleased to announce that, following the acquisition of Hallmarq Veterinary Imaging Limited ('Hallmarq') by funds managed by August Equity Partners LLP on 13 December 2018, the holding of the Company in Hallmarq has been sold.
The proceeds receivable are equivalent to an unaudited profit of £899,000 compared to the unaudited valuation attributed to the holding at 30 September 2018 of £2,029,000.
Hallmarq was the largest investment in the Ordinary Share pool as at 30 September 2018, and the investment proceeds receivable now represent a 2.62x return (unaudited) on the £1,116,000 original cost price.
The Company may also receive a small amount of further proceeds in relation to the Hallmarq sale conditional upon the outcome of certain future events; however the Company has not accounted for these at this point.
Current NAV per Ordinary Share
The profit achieved on the Hallmarq exit versus the valuation attributed to this holding at 30 September 2018 of £899,000 is equivalent to 11.1p per Ordinary Share (unaudited).
The Board has also reviewed the carrying value of the remaining unquoted and quoted investments in the Ordinary Share portfolio:
· They consider the current unaudited value of the unquoted portfolio (excluding Hallmarq) to be £1,332,000 compared to £1,500,000 at 30 September 2018 - a reduction of £168,000 equivalent to 2.1p per Ordinary Share (unaudited).
· The Company continues to hold 13,049,730 shares in Scancell plc valued at £992,000 (bid price 7.6p as at 14 December 2018) and 2,293,868 shares in Omega Diagnostics plc valued at £294,000 (bid price 12.8p as at 14 December 2018) which on a combined basis is £429,000 lower than the unaudited valuation attributed to these holdings at 30 September 2018 - a reduction equivalent to 5.3p per Ordinary Share (unaudited).
The Directors are, therefore, of the opinion that the current unaudited NAV per Ordinary Share, after the impact of the above and after the corresponding adjustment to the accrued performance fee relating to the Ordinary Share pool, is 63.4p compared to the previously announced unaudited NAV per Ordinary Share at 30 September 2018 of 60.4p - an increase of 3.0p per Ordinary Share.
Current NAV per B Share
The Directors are of the opinion that the B Share NAV per share remains materially unchanged at 99.7p per B Share as the Hallmarq exit does not affect the B Share class.
Distribution of Hallmarq proceeds
As previously stated, the Board intends to distribute the majority of the proceeds generated from the Hallmarq exit to holders of the Company's Ordinary Shares after repayment of the £200,000 loan made from the B Share pool to the Ordinary Share pool (created on the repayment of the Company's £200,000 loan from The Royal Bank of Scotland Plc earlier this year, which was a liability of the Ordinary Share pool) and after the retention of an appropriate proportion of these exit proceeds for the following purposes:
1. to enable the Company to provide small follow on investments into existing Ordinary Share pool portfolio companies where it is considered doing so will protect the existing investment and improve the prospects of a favourable exit from that investment in the medium term; and
2. to cover any exceptional running costs associated with the Ordinary Share pool portfolio which are not attributable to the B Share pool.
The level of distributable reserves that can be distributed to shareholders holding Ordinary Shares will be limited until the publication of the audited accounts in relation to the year ending 31 December 2018 (which will show increased distributable reserves resulting from the profit realised on the Hallmarq disposal and the capital reduction by the cancellation of the capital redemption reserve of the Company which became effective on 11 December 2018).
However, it is the intention of the Board that an interim dividend be declared on the Ordinary Shares in January 2019 with a further distribution to be made during 2019 following the publication of the audited accounts for the year ended 31 December 2018.
It is also the intention of the Board that Ordinary Shareholders be given an opportunity to reinvest some or all of the proceeds they receive from the disposal of the Hallmarq investment into B Shares with advantageous discounts to applied to the initial fees payable to Seneca Partners Limited, the Company's investment manager, in relation to any such investment. Full details will be provided when the interim dividend is declared.
For further information, please contact:
John Hustler, Seneca Growth Capital VCT Plc at [email protected]
Richard Manley, Seneca Growth Capital VCT Plc at [email protected]
