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CQS Rig Finance trust faces liquidation

by Robert St George on May 20, 2014 at 13:59

CQS Rig Finance trust faces liquidation

A majority of investors in the CQS Rig Finance fund have confirmed they wish to wind up the trust.

The closed-end investment company focuses on debt issued to finance the construction and refurbishment of the offshore infrastructure used by the oil and gas industry.

The trust raised £50 million when it floated in 2006, targeting investors seeking an uncorrelated income stream and an 8% yield, but its net asset value now is just £35 million. Its share price has dropped from £1 at launch to 34p.

The fund was hit hardest during the credit crunch, when the oil price fell and with it demand and day rates for rigs. Several of the companies CQS had lent money to filed for bankruptcy.

The board of the trust has now revealed that its largest shareholders – three firms within the CQS group that together own two-thirds of the fund – have indicated that they will support a voluntary liquidation.

‘Accordingly the board will be making arrangements to convene an extraordinary general meeting of shareholders to consider proposals to cancel its admission to trading on AIM, to place the company into members’ voluntary liquidation and thereafter to realise the company’s assets and facilitate the return of available cash to shareholders,’ the board told the stock market.

1 comment so far. Why not have your say?

Philip Milton

May 20, 2014 at 14:36

Can never change the past and a clear sign of how loan covenants are not meant to work - stupid ideas....

However, never overlook the other side of the equation - for clients we own 4.5% of the shares now and were also buying them from desperate or distressed sellers all the way up from nearly the bottom. Let's say that was 1.5p. Now, for a 23 fold increase (or so) in one's capital and annual income the last few years to boot, we're not unhappy with our clients' returns over five years?

Don't we need to read between the lines on our stories sometimes! Not everyone can be painted with the same brush!

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