Hygea vct plc announced on 15 December 2017 the intention to create a new share class (New “B” Shares) to be managed by Seneca Partners, with a more generalist investment policy than the one that currently applies to the existing Ordinary share class.
The New “B” Shares offer has now launched (9 May 2018) and will be raising up to £10 million, with an over-allotment facility of a further £10 million.
Existing Hygea shareholders will be offered the opportunity to subscribe for New “B” Shares at a discount.
The VCT is expected to be renamed Seneca Growth Capital VCT.
Hygea vct plc was launched in 2001 and had raised a total of £7.8 million prior to this announcement. The Ordinary share class is fully invested, predominantly in the medtech sector. As at 31 December 2017 it had approximately £5.2m in assets.
Octopus Investments Limited retired as the investment manager in July 2007; since then, the board of the VCT has taken on responsibility for managing the investments.
Portfolio & investment policy
Shareholders have approved the change from a medtech-focused investment policy to a generalist investment policy at the General Meeting in January 2018. The new policy is to provide both income and capital return by investing in both unquoted and AIM/NEX quoted UK companies.
The Ordinary shares were invested in the following companies as at 31 December 2017 (alphabetical order):
- Arecor Ltd
- DxS Ltd
- EKF Diagnostics PLC
- Exosect Ltd
- Fuel 3D Technologies Ltd
- Genedrive PLC
- Glide Pharmaceutical Technologies Ltd
- Hallmarq Veterinary Imaging Ltd
- ImmunoBiology Ltd
- Insense Ltd
- Microarray Ltd (formerly Archimed LLP)
- Omega Diagnostics Group PLC
- OR Productivity plc
- Scancell Holdings PLC
What will happen to the Ordinary share class?
The board will continue to manage this pool of assets and intends to distribute funds to Ordinary shareholders when exit opportunities arise. They do not envisage making any new investments from the assets in this share pool, apart from any follow-on investments in existing portfolio companies.
Seneca has agreed that the annual running costs of the VCT will be borne by the New “B” Share class for three years after the new shares are issued, meaning that the assets of the Ordinary share pool will not be depleted by those costs during that time. After this, running costs will be divided pro-rata to the net asset value of each share pool.
The offer is expected to extend the life of the VCT for at least another five years – which may benefit any Ordinary shareholders who took advantage of CGT deferral at the time of subscribing, a feature no longer available under VCT rules. Remember tax rules change and tax benefits depend on circumstances.
The Prospectus has now been published (9 May 2018) and investors are able to subscribe to the New “B” Shares, with an early bird discount in place until 31 May.
- Target dividend
- Initial charge
- Initial saving via Wealth Club
- Net initial charge
- Annual rebate
- Funds raised / sought
Hygea vct – New “B” Share offer
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