Groaning Gateway to close?
Article Date: Jul 10 2007After a fraught year in which its net assets fell 17.2 per cent, or 9.86p per share, the management of technology-focused Gateway VCT is considering either winding up the fund or merging with a competitor.
Chairman Michael Teacher called on shareholders to vote for the company to continue as a VCT at September’s annual meeting ‘to provide a period in which strategic alternatives can be further explored’. However, he admitted that either of the above strategies ‘would incur costs for the company and are unlikely to facilitate either significant liquidity in the future, or exit for a large number of shareholders should they wish to realise their holding in such a transaction’.
This crisis point has come to pass principally because of the poor performance of the company’s portfolio. In the year to March losses swelled more than tenfold to £1.8 million as two investee companies severely underperformed.
The valuation of AIM-listed Sarantel fell sharply during the year, accounting for a 4p reduction per share, but, even worse, the administrators had to be called in at car rental provider Burgundy Global. Teacher expressed particular disappointment in the latter as Gateway ‘had pointed out to [Burgundy’s] executive management team that we did not agree with a number of their decisions, but our advice was ignored’.
The company’s AGM is to be held on 11 September.
