Rensburg Aim VCT (RSB) has put its plans to wind up on hold so it can consider merging with another venture capital trust (VCTs). It follows objections to a wind up by private investor representative group ShareSoc, because some early investors in the VCT who had claimed capital gains tax (CGT) roll over relief may end up with a tax liability if it is wound up.
The VCT's board was due to issue a circular to shareholders by 20 June setting out proposals for a wind up which shareholders would have voted on at the annual general meeting (AGM) on 22 July. The VCT proposed winding up after making no new investments in its last financial year, as its managers could not find anything suitable and didn't think this was likely to change in the near future. Rensburg Aim VCT's board had also decided against a merger because it said after discussions with potential partners no one suitable had been identified.
But the VCT's board now says that several of the parties with whom it held discussions have come back with new proposals which might be more attractive. So the board will not post a circular and there will not be a vote on winding up at the AGM. The VCT will make a further announcement on its plans in due course.
Parties originally proposing a merger with Rensburg AIM VCT included Maven Capital Partners which runs six generalist VCTs, and in 2011 merged Bluehone AiM VCT 2 with Maven Income and Growth VCT 5 (MIG5). It had proposed doing something similar with Rensburg AIM VCT and one of its funds, implementing the generalist investment strategy used by its other VCTs.
However, Rensburg AIM VCT says that Maven Capital Partners is not one of the parties with which it is now having discussions.
Share Soc, meanwhile,welcomes the fact that Rensburg AIM's board has changed its mind and is considering other options, but says at the 22 July AGM shareholders should ask:
• what are the costs of this abortive development of proposals for a wind-up - legal and other; and
• why did Rensburg AIM VCT's board not actively pursue alternative proposals before, rather than waiting for its wind-up announcements to act as a catalyst to generate interest?
