Chrysalis VCT: liquidation

[baronspill]

Edge Performance annual report out on 23rd August. Expecting more news then if not already issued.

[127tolmers]

https://www.investegate.co.uk/edge-perf ... 33344680I/

...........and the recent receipt of the proceeds from the sale of the Company's Coolabi holding...........

[wilwak9]

https://www.investegate.co.uk/edge-perf ... 33344680I/

...........and the recent receipt of the proceeds from the sale of the Company's Coolabi holding...........

Thanks. Sounds positive.

Let’s hope that Chrysalis’s entire holding and loan was also fully realised and a healthy dividend is forthcoming soon.

[wilwak9]

I’ve been hoping to read of a return of capital …. nothing yet I assume?

I have my shares in a nominee account so don’t receive any correspondence…

[Kidman]

I had a certificated holding in my own name and have heard nothing.
I'm not too surprised.
From memory they had over £1m in cash at the time of the liquidation start and I suspect they will wait for one or two small holdings to exit so they can roll as much as they can into the first distribution. It could be that they announce it at the time of the first annual liquidation report, a few months away yet. If all goes well they will then exit or write off the remaining investments in year two of the liquidation and then make a second and final payment after all the usual clearances.

[wilwak9]

Thanks Kidman.

Yes, they did mention that some other smaller deals were ‘close’ so they’re most likely waiting to finalise those before making a payment.

I think you could be exactly right on your timing prediction.

[Kidman]

A communication from Chrysalis received in the post this morning, official notification of the change of registrar.
It is now City Partnership and direct shareholders can have online access to their holdings.
No mention of payouts or liquidation progress.

[yorkshirelad1]

A communication from Chrysalis received in the post this morning, official notification of the change of registrar.
It is now City Partnership and direct shareholders can have online access to their holdings.
No mention of payouts or liquidation progress.

Ditto re letter. I've just gone through the online registration at https://chrysalis-vct.cityhub.uk.com/
and it says my Investor Access Token is "pending"; will wait and see what happens, maybe it takes a little while to catch up with itself.

[yorkshirelad1]

A communication from Chrysalis received in the post this morning, official notification of the change of registrar.
It is now City Partnership and direct shareholders can have online access to their holdings.
No mention of payouts or liquidation progress.

Ditto re letter. I've just gone through the online registration at https://chrysalis-vct.cityhub.uk.com/
and it says my Investor Access Token is "pending"; will wait and see what happens, maybe it takes a little while to catch up with itself.

An extract of the letter: https://imgur.com/5704ZoZ

[Kidman]

Ditto re letter. I've just gone through the online registration at https://chrysalis-vct.cityhub.uk.com/
and it says my Investor Access Token is "pending"; will wait and see what happens, maybe it takes a little while to catch up with itself.

I seem to remember with Pembroke it takes a while, quarter of an hour or so.
Sadly CityHub appear to be like Link in wanting a different login for each company. I had hoped to be able to see Chrysalis and Pembroke on one page.

[yorkshirelad1]

Ditto re letter. I've just gone through the online registration at https://chrysalis-vct.cityhub.uk.com/
and it says my Investor Access Token is "pending"; will wait and see what happens, maybe it takes a little while to catch up with itself.

An extract of the letter: https://imgur.com/5704ZoZ

Had a second email and all seems fine. My election for email communication and BACS details have passed across to the new registrar. Watch and wait!

[127tolmers]

Edge Performance VCT results came out yesterday. Key excerpts below:

https://www.rns-pdf.londonstockexchange ... 1-8-23.pdf

19. Post Balance Sheet Events
Since the Company’s year end, the following transactions have taken place:
• In June 2021, the Company disposed of its shareholding in Coolabi Group Limited, consideration totalling £8,365k was received on
9 August 2021

Page 4 Overall Review
The Board has declared
interim dividends of 20p per H share and
8.5p per I share, each with a record date
of 20 August 2021 and a payment date of
27 August 2021. The sum of these dividend
payments is very close to the maximum
payable given the Company’s distributable
reserves as at 28 February 2021.

Distributions
We intend to distribute the proceeds of all
I share realisations as soon as practical.
Following the sale of Coolabi, the Board has
declared an interim dividend of 8.5p per
I share, payable on 27 August 2021. This
dividend represents a return to shareholders
of 72% of the net asset value of the I share
class as at 28 February 2021. Following the
distribution of I share proceeds from the
realisation of its portfolio holdings, we intend
to immediately proceed with an orderly
closure of the I share class.

Page 9 Existing portfolio investments
Coolabi Group Limited
Cost (£’000): 17,716
Valuation (£’000): 8,366
Value movement (11,296)
in year (£’000): (57.5%) decrease
Basis of valuation: Sale price
Equity holding: 49.99% of
voting rights

The valuation for Coolabi is derived from
indications of interest during the M&A
process, applied to the distribution waterfall
for proceeds. As a consequence of the
capital structure of the Company, and prior
ranking debt as well as the management
incentive scheme implemented in 2019, all
of the value for EPVCT value is now held in
its debt instruments rather than the equity.

An adviser was appointed in early 2020 to
explore the strategic opportunities for Coolabi
including an outright sale. Despite the severe
impact of the pandemic on the process,
which limited the depth and breadth of the
buyer universe, limiting this to European
bidders, rather than the expected range of
European and Asian bidders, Edge
Performance VCT reached agreement to sell
its shareholding in Coolabi as part of the sale
of the Company. This sale was at a headline
valuation of £35m, which is within the range
expected at the start of the process but at
the lower end of that range. This accounts
for the reduction in the valuation of the
Coolabi holding for EPVCT throughout
2020/21, as the valuation was revised down
to the offer price and subsequently lowered
again as the process completed later than
forecast and value accrued to the senior
note holders.

The sale of Coolabi will allow the business
to take on the additional capital required to
grow the business and which the current
VCT investors, including Edge Performance
VCT, cannot now offer under state-aid rules.

[wilwak9]

Thanks Tolmers. Much appreciated.

Hoping for a nice Chrysalis dividend before the end of 2021. Fingers crossed.

[wilwak9]

“Once funds have been received by the liquidators in respect of the Coolabi disposal, the Company plans to make its first distribution since entering liquidation. I will write to Shareholders with full details once they are finalised.‘

Based on this excerpt from the June letter regarding the 31st July completion I thought we would have heard something by now.

I know that paying dividends is costly and therefore it makes sense to minimise them but….. how much does an update communication to shareholders cost? Just to give us some idea of what’s going on?

[Kidman]

What we don't know is progress on any other sale. If someone has the time to trawl Companies House for each holding there may be some clues.
I suspect they want to conclude as many sales as seem feasible before the first payment.

From memory the liquidation started in November 2020 and one year later the liquidators will have to send a report stating what costs have been incurred and giving a progress report together with a view on completion. I could imagine them trying to roll everything into that report which could be three to four months away at a guess.

[wilwak9]

Yes, thanks Kidman, that all makes perfect sense but they did clearly say there’d be a distribution after Coolabi funds have arrived.

If they told us that they were going to wait until after November then that’d be fine.

It’s just the silence that’s frustrating.

[Kidman]

they did clearly say there’d be a distribution after Coolabi funds have arrived.

Perhaps we should assume 'some time after' rather than the desired 'shortly after'.

Seriously, I would have liked a first distribution using the Coolabi money and some of the cash but I fear we will just have to wait.
There weren't a great many holdings and some may have had to be written off. It is just possible that they can get out of all the holdings fairly soon and then just make one first and final distribultion. That requires all HMRC clearances to be in place and other formalities but it could happen and would keep costs down, albeit that many of those costs aren't major.

[wilwak9]

Still silence …..

I think we should have had an update by now. The last one said…

“Once funds have been received by the liquidators in respect of the Coolabi disposal, the Company plans to make its first distribution since entering liquidation” and that was due to complete on 30th July.

As a shareholder I feel a little abandoned by Chrysalis at the mo.

[yorkshirelad1]

Update from the company dated 29 Oct 2021, available from https://www.downing.co.uk/existing-inve ... ysalis-vct (via a link at the bottom of that page)
(I got my update via e-mail this morning, I am a direct shareholder)

Short version: "a distribution of 10.0p per share will be paid on 24 November 2021"

[wilwak9]

Still waiting for Coolabi to complete but quite a promising circular estimating total liquidation proceeds of 50p’ish if things proceed as hoped.

I’d be very Happy with that outcome

Looking forward to the first 10p arriving.