VPC Specialty Lending Investments is underneath stress from shareholders to alter its funding coverage after buying and selling shares under market worth for a number of years.
The agency printed a discover yesterday (7 December) acknowledging that it had acquired a request from shareholders, dated 6 December 2022, in search of to requisition a normal assembly to contemplate modifications to the corporate’s funding coverage and share capital construction.
The requisition was signed by three traders, International Worth Fund, Staude Capital Worth Fund and Metage Funds, which maintain greater than 5 per cent of the agency’s share capital and as such carry voting rights.
The assertion mentioned the board is within the strategy of reviewing the content material and legality of the request with its advisers and an additional announcement will probably be made sooner or later.
Learn extra: VPC Specialty Lending posts loss pushed by fairness volatility
Talking to Peer2Peer Finance Information as we speak, Tom Sharp from Metage Funds Restricted and Miles Staude, representing the 2 different signatories to the request, mentioned the fund had been buying and selling at a reduction to the worth of its belongings since 2015, and that they’d been attempting to resolve the difficulty in negotiation with the board for at the least two years.
The traders despatched a public letter to shareholders in September calling for a gathering to debate doable options to the continuing low cost between the corporate’s share value and its internet asset worth per share.
Having acquired no significant response, they despatched a observe up letter on 6 December alongside the requisition request.
It outlined the truth that, in 2020 VPC proposed an exit plan enabling shareholders to understand the worth of 25 per cent of their shares that may take impact in 2023, nonetheless this was by no means put to the vote in subsequent conferences. Additionally it is not deemed a ample resolution by Metage and Staude.
As a substitute, they’re recommending that shareholders again their proposal for the creation of a realisation share class, enabling shareholders to choose into 100 per cent realisation alternative each three years, ranging from subsequent yr.
Learn extra: Victory Park Capital makes a double rent for its funding workforce
The traders had been suggested by regulation agency Travers Smith, which was cited within the letter as having mentioned the proposals put ahead by the traders weren’t “frivolous, vexatious or ineffective”.
The letter went on to say: “We consider the board has been essentially disingenuous each in not figuring out this as a essential challenge of their discussions and in not making it clear to shareholders that their detailed plans are for the approval, funding and mechanism of the 2023 exit alternative.”
Sharp mentioned apart from confirming that they’d acquired the 6 December requisition discover, VPC had nonetheless in a roundabout way responded to his or Staude’s correspondence.
“It appears to be that somewhat than coping with it in a public method, which is what we predict ought to occur – the place they’re clear what they need, what their plans are, what they assume – that they’re simply not publicly partaking in any respect,” Sharp mentioned. “Which is disappointing.”
A spokesperson for VPC declined to remark additional at this stage.
Learn extra: Victory Park Capital Specialty Lending returns to constructive NAV in Q2
