Woodford welcomes £26m deal after Guernsey setback

Russian investment comes through as Ibiza company causes woes

Neil Woodford has cemented a welcome £26m cash injection from his Russian warehouse holding, Raven Russia, less than a week after the Guernsey stock exchange provided a further liquidity setback for the fund manager.

Sabina Estates requested its preference shares be cancelled effective Friday, according to a notice published on the Guernsey stock exchange. Woodford would not comment on the Equity Income fund’s exposure to illiquid stocks following the delisting when contacted by Portfolio Adviser.

Both property companies are linked to developer Anton Bilton, who is also a minority shareholder in the company that sponsored the listing of Woodford’s unquoted companies to the Guernsey stock exchange.

The FCA has described Woodford’s listing of unquoted companies in Guernsey as following the letter but not the spirit of its rules.

Woodford only holder of listed Sabina shares

It appears Woodford held the entirety of the Sabina Estates securities listed in Guernsey with the notice stating 9,000 preference shares would be delisted – the exact amount held by Woodford Equity Income, according to its annual report for the year ended 31 December 2018.

The preference shares represented a 1.73% weighting in Woodford Equity Income at this point, although the fund appears to own an additional 0.10% in ordinary shares, which were never listed.

In July, the Financial Conduct Authority gave Woodford six months to bring the Equity Income fund into compliance with the 10% threshold allowed for unquoted companies in Ucits funds following the delisting of Benevolent AI and Industrial Heat from the Guernsey stock exchange.

The FCA has previously estimated the combination of Woodford’s unquoted companies and his Guernsey listings totalled 20%.

Raven shareholders approve buyback

At a general meeting on Tuesday, Raven Russia shareholders voted in favour of a buyback of Woodford’s ordinary shares, which represent a 12% stake in the investment trust, and Invesco shares, which represent 31%.

In a regulatory filing published in July, Raven said it would pay 36p for Woodford’s 72,144,978 ordinary shares resulting in a total price tag of £26m.

For both the Woodford and Invesco buy backs, 97.94% of votes were cast in favour of the transactions, which will complete on Wednesday.

JO Hambro, company directors and Schroders are the next largest shareholders in ordinary shares after Invesco and Woodford.

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