Chrysalis VCT: H1 res: company looking to wind up

[yorkshirelad1]

does anyone understand the movement of the sp here!

I'm guessing you're referring to
Chrysalis VCT 35.00p -4.00p (-10.26%)
at close today (3 Nov).

[Kidman]

Chrysalis VCT 35.00p

mid-price and the spread is 25p - 45p.
I assume the market makers don't want to buy any in but on the other hand they can't expect any buyers at 45p to take them off their hands.

[yorkshirelad1]

Received my documents for the winding-up this morning (circular & voting form) in hardcopy (I am registered to get interim/annual CYS report via e-mail).
The pdf of the circular & voting forms are avialble at: https://www.downing.co.uk/existing-investor/chrysalis-vct

[Kidman]

I too received my hardcopy circular. I find hardcopy easier to read, mark up, refer to etc whereas I tire rapidly of looking at doucments on a screen!

I note that the plan is to complete the liquidation in three years as that is the HMRC limit. After that it appears that what is left would be like an investment company (without investment trust status) which could incur CGT for example.

I tried to understand the situation by reading https://www.gov.uk/hmrc-internal-manuals/venture-capital-schemes-manual/vcm56010 but wasn't much the wiser.
One point intrigued me though, hard-to-sell investments may be transferred from a VCT that is being wound up to another VCT without loss of their status as ‘qualifying holdings’ so if the remaining value at any time appears to be less than the forecast remaining costs, the liquidation could be terminated by giving the remaining holdings to another VCT and closing the liquidation.

[Kidman]

It appears that everyone's top choice was to have CYS taken over with a 'C' share arrangement but the directors claim that the cost would be prohibitive.

Could the liquidator achieve almost the same effect? My idea is that as soon as the liquidation starts, the liquidator sells the portfolio to a VCT in return for loan notes. These are then distributed pro rata to CYS shareholders and the liquidation closed. As investments are sold the loan notes can be redeemed and the VCT could optionally offer the option to invest the repayments into new shares.
If this option is possible, it wouldn't help those with CGT liabilities but it would save paying Martin Knight and Chris Kay significant amounts.

Which is more expensive, the cost of a merger or the fees to the two aforementioned gentlemen for three years?

[yorkshirelad1]

CGT/VCT: deferred gains and inherited shares

I have a holding of Chrysalis VCT. The 30 Oct 2020 Winding-up circular
https://www.downing.co.uk/existing-investor/chrysalis-vct says

The Board is aware that some investors acquired their Shares before 6 April 2004 and may have claimed Capital Gains Tax (“CGT“) deferral relief on their investment. The receipt of the first distribution made during the course of the liquidation will cause those deferred gains to become chargeable to tax at the prevailing rate of CGT. Such investors should take their own advice as to their own circumstances.

I inherited the VCT shares from my mother who died in 2013. She purchased them in 2003 or before (I was trying to find the exact date of the subscription but she subscribed to an earlier I-Net VCT which merged into Chrysalis VCT making it even hazier). I suspect she claimed CGT relief, but I can't be certain until (if!) I find any of her tax paperwork from 20 years ago...... I was getting into a bit of a pickle in case I was going to get caught by having Mum's deferred gains bite me on the backside when I bit of Googling led me to a Sept 2020 Baronsmead pdf "Bequeathing shares"
https://greshamhouse.com/wp-content/uploads/2020/09/Baronsmead-Bequeathing-shares.pdf
which says (the last bit of the pdf is relevant to me):

After death (as a bequest)

• Tax implications for VCT shareholder (transferor): VCT shares valued as part of the estate. Any deferred capital gains are extinguished on death.
• Tax implications for recipient non-spouse: Receives tax free income and capital gains on VCT shares.

So, thankfully, it would seem I do not have to worry about deferred gains coming in to play.

Thought I'd share this in case anyone else found it useful.
OTOH, if I've got this completely wrong, and someone wants to put me right, feel free!

[127tolmers]

I am puzzled they can predict a time of 36 months.

Under VCT rules the VCT income and capital gains tax exemptions apply for 36 months; thereafter CGT kicks in so there is an incentive to get it done whatever the price.

[yorkshirelad1]

Two blog posts from Sharesoc today (11 Nov) re Chrysalis VCT winding-up

Epidemic Over? Unable to Trade and Chrysalis VCT Wind-Up
https://www.sharesoc.org/blog/vcts/epidemic-over-unable-to-trade-and-chrysalis-vct-wind-up/

Chrysalis – Vote NO at 26 November General Meeting
https://www.sharesoc.org/blog/vcts/chrysalis-vote-no-at-26-november-general-meeting/

Gen meeting is 26 Nov and forms have to be submitted not less than 48 hours before.
https://www.downing.co.uk/existing-investor/chrysalis-vct

(I have no connection with Sharesoc other than as a member; I hold shares in Chrysalis VCT)

[UncleEbenezer]

Hearing today's news, those anticipating CGT liabilities might want to divest themselves now rather than wait!

I wonder if there are enough of them to affect the market?

[BusyBumbleBee]

If you are holding any of these in YouInvest, they have just opened up a Corporate Action enabling you to vote any shares in Chrysalis that you might have tucked away there - I have just voted all mine against all motions.

[yorkshirelad1]

Chrysalis VCT Plc: Suspension re. Winding Up Proposals
26 November 2020

Prior to a resolution to effect the commencement of the winding up of the Company (and consequently the cancellation of the listing of the Company’s shares on the Official List) that will be put to the Company’s shareholders at a general meeting of the Company to be held on 26 November 2020, trading in the Company’s shares has now been suspended at the request of the Company.

https://www.investegate.co.uk/chrysalis-vct-plc--cys-/gnw/suspension-re--winding-up-proposals/20201126070000H1709/

[ali1947fish]

is the meeting of chrysalis to consider the votes - no time for the meeting or who is attending?

[127tolmers]

As far as I understand, it is a closed meeting with no dial-in facility. They held no pre-GM discussion meeting to allow a shareholder debate ahead of voting. It is a very poor advert for the VCT industry who usually strive for a better level of governance and transparency.

[127tolmers]

Wind up approved with a 33% turnout. Less than 7% against.

https://www.investegate.co.uk/chrysalis ... 4533H2108/

Results of General Meeting
At a General Meeting of the Company, held earlier today, all resolutions as set out in the notice of the General Meeting of the Company dated 30 October 2020 (the “Resolutions”) were passed with the requisite majority. The proposals to put the company into members’ voluntary liquidation will now be implemented.

Further to the passing of the Resolutions, the cancellation of the listing of the Company’s Ordinary Shares on the Official List will take effect from 8.00 a.m. on 30 November 2020.

[ali1947fish]

does this mean it can't be reversed

[yorkshirelad1]

Thread on the liquidation at: https://www.lemonfool.co.uk/viewtopic.php?f=25&t=27402