22/10/2007 - 15:06

LinQ unitholders fail to back Carrousel proposal

22/10/2007 - 15:06

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Investors in listed investment company LinQ Resources Fund have endorsed the strategy of the existing fund manager, with a majority rejecting proposals for change put forward by UK investor Carrousel Capital.

LinQ unitholders fail to back Carrousel proposal

Investors in listed investment company LinQ Resources Fund have endorsed the strategy of the existing fund manager, with a majority rejecting proposals for change put forward by UK investor Carrousel Capital.

Carrousel has been agitating for change, to try and reduce the discount between LinQ's net asset backing and its unit price.

LinQ said only six per cent of the outstanding units voted with Carrousel at a meeting today, which it said was a strong endorsement of the board's strategy.

Carrousel focused on the fact that 30 per cent of units voted - including its own units - were in favour of its resolution.

"Given the percentage level who voted either in favour or abstained, we think the Board would be wise to listen to what we have to say," said James Beddall, who manages Carrousel's Australian investments.

 

 

LinQ media statement:

Carrousel's resolution overwhelmingly rejected

LinQ Unitholders strongly endorse Board's strategy

Unitholders in the LinQ Resources Fund (ASX:LRF), Australia's leading specialist managed resources fund, have strongly endorsed the Board's strategy for the Fund today, delivering an outright rejection to the resolution from hedge fund, Carrousel Capital.

Valid proxies were received from over 86% of the Fund's units outstanding. The Board is pleased to note that only 6% of outstanding units voted with Carrousel.

The details of the voting were as follows:

Against For
Number of units 115,275,810 50,003,021
70% 30%

The Chairman of LinQ Capital, Mr Gordon Toll, welcomed today's decision.

"This is a great result. It clearly indicates Unitholders' endorsement of the Board's strategy. The Fund has been performing exceptionally well with continued strong NTA growth as a result of superior stock selection. Meanwhile the unit price has more than doubled over the past 12 months.

"The Board's strategies are working and we believe the Fund is well placed to capitalise on its position to deliver further superior investment performance for all Unitholders."

 

Carrousel media statement:

Global investor Carrousel Capital today welcomed unitholder support for its initiatives to encourage the board of LinQ Capital, the responsible entity for the LinQ Resources Fund, to develop strategies to effectively manage the discount to net tangible assets at which the units trade in the market.

"We are pleased with the level of unitholder turnout at today's meeting as it shows that unitholders are interested in the future of their fund and the way it is being managed," said James Beddall who manages Carrousel's Australian investments.

"We believe we have put the issue of managing discounts much higher on the agenda for boards of listed investment companies in Australia to the benefit of all investors. Our action in this case has been overwhelmingly positive for all unitholders and has already enhanced unitholder value."

Mr Beddall reminded the board of LinQ that Carrousel remained the fund's largest unitholder and would be actively monitoring the Board's discount management policies.

Carrousel noted that the board of LinQ was moving in the right direction on discount management but still had a long way to go.

"We will be maintaining pressure on them to do a lot more about fixing the discount problem, furthermore given the strength of the resources sector, the fund should be trading at a premium to its NTA - not a permanent discount," Mr Beddall said.

"While our resolution did not achieve the very high hurdle rate of 50 percent of all issued units, more than 30 per cent of units voted were in favour of our resolution," Mr Beddall said.

"Given the percentage level who voted either in favour or abstained, we think the Board would be wise to listen to what we have to say."

"Finally, Carrousel would like to thank all those unitholders who supported the resolution and shared our objective to encourage the Board to propose new strategies to eliminate the discount."

 

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