Extraordinary General Meeting for the approval of change to Investment Policy
The Company has today published a circular (the "Circular") proposing a change to the Company's existing published investment policy (the "Investment Policy") to be considered at an Extraordinary General Meeting on
Revised Investment Policy
The Board proposes amending the Investment Policy so that the Company may make an incremental investment in
As further described in the Investment Policy set out in the Circular, the Company utilises the Partnership to make investments. Accordingly, the Company's gross assets are calculated by reference to the gross unrealised portfolio value of the Partnership, as well as cash and cash equivalents held by each of the Partnership and the Company.
Reasons for the proposed change
The amendment to the Investment Policy is being proposed in order to allow the Company to exercise the 69.8 million warrants in CIOC acquired (indirectly) by the Company following a successful tender offer for up to 100 per cent. of the then outstanding common shares ("Common Shares"), and warrants to purchase Common Shares ("Warrants"), of CIOC (the "Tender Offer") by a Riverstone-controlled entity in
On completion of the Tender Offer, the Company's investment in CIOC represented 19.6 per cent. of the gross assets of the Company. As at the Investment Manager's latest published unaudited valuation at
Under the current Investment Policy, the Company would now be prevented from making any further investment into CIOC, including by exercising the Warrants it owns, which, at the Investment Manager's current valuation, are deeply in the money. The Company estimates that, were it to exercise all of the Warrants held by it, immediately following such exercise, the Company's investment in CIOC would represent approximately 31 per cent. of the Company's gross assets (by reference to the Investment Manager's published unaudited valuation as at
The Board believes that the Company's investment in CIOC is highly attractive, as evidenced by its valuation at
The Company currently owns 30 per cent. of the outstanding Common Shares in CIOC, and 46 per cent. of the outstanding Warrants, which equates to a fully diluted equity ownership of 35 per cent1. The Company's investment in CIOC is valued on a fully diluted basis, with significant value attributed to the Warrants in the Investment Manager's
Shareholders should note that, were the Company to implement the proposed change to the Investment Policy and exercise the Warrants held by it, the relative size of the Company's investment in CIOC would be significantly greater than its investment in any other portfolio company. Consequently, the Company's concentration risk in respect of CIOC (and the energy sub-sectors and geographies in which CIOC operates) would be increased, and the aggregate returns which the Company realises may be disproportionally adversely affected were its investment in CIOC to perform poorly or the value of that investment to be substantially written down.
The Board does not expect the Company to invest material capital in CIOC beyond the exercise of the Warrants, and expects its investment in CIOC to remain below the limit of 35 per cent. of the Company's gross assets being proposed. The remaining 65 per cent. of the Company's gross assets would still be represented by 15 separate portfolio companies, representing a diverse portfolio of exploration, production and midstream companies operating across multiple basins in
Extraordinary General Meeting
Set out in the Circular is a notice convening the Extraordinary General Meeting of the Company to be held at
Latest time and date for receipt of Proxy Forms
11.30 a.m. on Tuesday 13 December 2016
Extraordinary General Meeting
11.30 a.m. on Thursday 15 December 2016
Effective date of amendments to Investment Policy
Thursday 15 December 2016 at the conclusion of the Extraordinary General Meeting
If any of the above times and/or dates change, the revised times and/or dates will be notified to Shareholders by announcement through a Regulatory Information Service.
Unless otherwise stated, all references to times in this document are to
A copy of the Circular has been submitted to the National Storage Mechanism and will shortly be available for inspection at www.morningstar.co.uk/uk/NSM. The Circular will also be shortly available on the Company's website www.riverstonerel.com
REL is a closed-ended investment company that invests exclusively in the global energy industry, with a particular focus on the exploration & production and midstream sectors. REL aims to capitalise on the opportunities presented by Riverstone's energy investment platform. REL is a member of the FTSE 250 and its ordinary shares are listed on the
For further details, see www.RiverstoneREL.com
Neither the contents of
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1 Pro forma for exercising the Warrants (and assuming all outstanding Warrants are exercised), the Company would own 35 per cent. of the fully diluted Common Shares.
2 As at
This information is provided by RNS