VPC Specialty Lending announces first payment to shareholders
VPC Specialty Lending (VPL) will be returning some capital to shareholders through the issue and redemption of B shares as it continues to wind down.
The investment trust, which is focused on asset-backed lending, began winding down in June 2023 after receiving shareholder approval for the process.
In the six months to the end of March, the company said it raised a total of $58m (£45.7m) through debt repayments and the sale of equity securities. Part of the proceeds were used to paydown the company’s gearing facility, which was reduced by approximately $41m to $43m.
The board has now decided to return $15m (£11.9m) to shareholders, representing approximately 5.12 per cent of the company’s net asset value at 31 January 2024.
Read more: VPC Specialty Lending shareholders approve wind-down
The B shares will be issued on 19 April and redeemed at one penny per share. The share issue will not reduce the number of the company’s ordinary shares in issue, but the NAV will be reduced by the total amount of capital returned. The share price is likely to reflect this reduction in NAV.
The company said it will continue to realise value from its debt and equity positions and will use the proceeds to repay its borrowings and return capital.
“We are not able to specify the timing and amount of future returns, which will continue to depend on the repayment of the company’s debt assets as well as the sale of other securities,” the board said in a statement.
It added that now that the B share scheme is in place, returns of capital can be made on a more cost-effective basis, allowing potentially for smaller and more frequent payments.
Listed debt funds have fallen out of favour in recent years and VSL has struggled to attract investor support despite solid returns. In 2020, it lost a few major shareholders including Invesco and Woodford Investment Management which cemented its demise. VSL proposed to enter a managed wind-down after investor pressure regarding its low share price.
Read more: Invesco follows Woodford in altfin sell-off amid rising outflows
Read more: VPC Specialty Lending posts loss driven by equity volatility
