VPC

VPC Specialty Lending Investments PLC

Initial Return of Capital through the B Share Scheme

Shareholders in VPC Specialty Lending Investments plc (the “Company“) approved the B Share Scheme at a general meeting of the Company held on 5 April 2024 (the “General Meeting“). Following that approval the Company is announcing an initial return of Capital via the B Share Scheme.  

The Company’s managed wind-down investment policy was approved by shareholders in June 2023. In the six months ending 31 March 2024, as indicated in the monthly updates, the Company has made progress in realising value both through debt repayments and the sale of equity securities, raising a total of approximately $58 million. As noted in the updates, these proceeds were applied in part to paydown the Company’s gearing facility which, over the same period, was reduced by approximately $41 million. These repayments have reduced the Company’s gearing to around $43 million, from $84 million as at 1 October 2023 and the gearing ratio has declined from 0.27x to 0.15x. Shareholders should note the gearing ratio could fluctuate as the Company progresses the managed wind-down.

After taking into account the contractually required reduction to the Company’s gearing facility as well as preserving liquidity for foreign exchange hedging and working capital requirements, the Board has decided to make an initial distribution to shareholders of $15 million, equivalent to approximately £11.9 million as at the date of release, through the issue and redemption of B Shares. The capital to be returned represents approximately 5.12 per cent. of the Company’s Net Asset Value as at 31 January 2024.

Pursuant to the authority received from shareholders at the General Meeting B Shares of 1 penny each will be paid up out of the reserves of the Company and issued to all Shareholders by way of a bonus issue pro-rata to their holding of Ordinary Shares held at the Record Date of 6p.m. on 18 April 2024. The B Shares will be issued on 19 April 2024 and redeemed at 1 penny per B Share. The Redemption Date in respect of this initial return of capital is 25 April 2024. The proceeds from the redemption of the B Shares will be sent to uncertificated Shareholders through CREST or via cheque to certificated Shareholders on or around 10 May 2024.

Shareholders are reminded that the issue of B Shares will not reduce the number of the Company’s ordinary shares in issue. However, following the issue and redemption of B Shares, the NAV (and NAV per ordinary share) will be reduced by the total amount of capital returned and the share price is likely to reflect the reduction in NAV. The pence per ordinary share amount of any dividends is therefore expected to reduce as a consequence of the reduction in NAV and, over time, through the changing composition of the portfolio.

The Company will continue to realise value from its debt and equity positions and will allocate the proceeds as between the repayment of the Company’s borrowings and further returns of capital using the B Share Scheme, and taking into account the foreign exchange and other working capital needs of the Company. We are not able to specify the timing and amount of future returns, which will continue to depend on the repayment of the Company’s debt assets as well as the sale of other securities. One of the advantages of the B Share Scheme is that now it is in place, returns of capital can be made to shareholders on a more cost-effective basis than through a tender offer. This would allow for smaller and potentially more frequent returns to be made.

Terms used and not defined in this announcement have the meanings given to them in the circular to the Company’s shareholders dated 15 March 2024.

Timetable

It is expected that the timetable will be as follows: