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.