A listed company managed by Neil Woodford has announced plans to sell assets to reduce debt when the former star fund leader fights to save his business.
Woodford Patient Capital Trust, who has discussed Woodford's divestment from the business after he froze £ 3.7 billion of the investor's money in his flagship's Woodford Equity Income Fund, returned Friday to end his relationship with the fund manager but indicated his role continued to be reviewed.
"The most important discussion areas for the shareholders" says on the board that the chairman of the board Susan Searle is "exchange rates, share price discount to net worth, valuations, board composition and the ongoing development of the portfolio manager".
As the UK's largest ever investment trust launch in 201
Patient Capital has come close to its loan limitations and has drawn £ 126m of a £ 150m debt facility so far. It has also attracted interest in hedge funds and other buyers of distressed assets speculating that it may contain fire sales of valuable and illiquid holdings in its portfolio, which includes efforts in risky, young companies whose shares are not publicly traded.
The trust overdraft comes from the Chicago-based bank Northern Trust, while the loan is backed by shares in the companies Patient Capital owns. The transfer facility is expected to expire in January.
Ms. Searle said the board intends to "reduce returns over time" from a current 17 percent of its net assets to 10 percent and would use profits from "divestments and realizations in the company's portfolio" to fund it.
Trust also renews its board, it said on Friday. Carolan Dobson, who sits on a number of investment trusts, goes down as a non-executive director while former hedge fund manager and serial non-executive director Stephen Cohen joins the board.
Ms Searle said Patient Capital was trying to hire another two managers to "preserve the value of the assets in the portfolio and protect the shareholders' interests in the company".
If the relationship with Woodford, from which the Patient Capital Board claims, it is completely independent of the confidence said on Friday it was "closely monitoring the situation and continuing to hold a regular dialogue with the portfolio manager".