THE COMPANY’S BUSINESS

In line with the wind-down policy approved by Shareholders in June 2023, the Investment Manager has continued to realise value through debt repayments and the sale of equity securities. In the first half of this year, proceeds of approximately $45 million were generated from the sale or redemption of Company investments. These proceeds have either been distributed to Shareholders or used to reduce the level of gearing in the portfolio. While it is too early to predict when the gearing will be eliminated entirely, the Company intends to continue to reduce the gearing as progress towards full wind-down continues.

In May, the Company made an initial distribution to Shareholders of $15 million, equivalent to approximately £11.9 million as at the date it was announced, through the issue and redemption of B Shares. The capital returned represented 5.12% of the Company’s net asset value on 31 January 2024.

With the changes to the portfolio brought about by the wind-down, we anticipate impacts on both dividends and hedging. As we have previously indicated, the dividend paid by the Company has started to be reduced proportionately with the distribution of capital from the portfolio. For the three-month period to 31 March, the Company paid an interim dividend of 1.89 pence per share on 18 July. This was equivalent to the preceding dividends of 2.00 pence per share when the reduction in the Company’s net asset value caused by the B-share distribution was taken into account, and we have announced a further dividend of 1.89p in respect of the period to 30 June 2024. We expect that the dividend will be reduced further as the portfolio’s income falls during the progression towards wind-down.