News Column

ARC Capital Holdings Net Asset Value Declines As It Winds Down

June 13, 2014

Hana Stewart-Smith



LONDON (Alliance News) - ARC Capital Holdings Ltd said Friday its net asset value declined in 2013, as it continued to return money to shareholders while winding down its portfolio.


The closed-ended investment company focuses on retail and consumer goods in China. It posted a net asset value of USD0.83 per share as at December 31, 2013, down 11% from USD0.92 a year earlier.


ARC Capital Holdings said that, since adopting its realisation strategy in January 2012, it had generated proceeds of USD127.1 million from its portfolio, and had distributed USD113 million to shareholders.


The company said it had continued with its strategy to realise funds from its investment portfolio as quickly as practicably possible. The company will make no new investments.


During the year it sold its shares in Goodbaby Private for USD6.8 million, and Shaanxi Dade Education Development Co Ltd for around USD27.1 million.


Since the year end it has sold its stake in Ningxia Xiajin Dairy Co Ltd for a total of USD30.0 million, and entered into agreements to sell its shares in Funtalk China Holdings Ltd and Shandong Buchang Pharmaceuticals Co Ltd for USD137.3 million and USD14.9 million, respectively.


ARC Capital Holdings said the year had been "extremely challenging" following its investigation of its Orient Home investment on the request of shareholders in late 2012.


The company's investment manager, ARC Capital Partners Ltd, took a majority stake in Orient Home Industrial Co Ltd in December 2010.


However, following the transfer Orient Home failed to comply with conditions of the equity purchase agreement, and as a result was required to make a repayment. However, after no repayment was forthcoming, a request for arbitration was filed with the China International Economic and Trade Arbitration Commission.


In April the company said that the commission had extended its deadline for an arbitral award on the deposit to June 21.


ARC Capital Holdings said that it has made a 23% provision against the investment in Orient Home, reducing its carrying value to USD41.0 million from USD53.5 million as at the end of 2013.


ARC Capital Partners tendered its resignation in February, and the company said it was working with ARC Capital Partners to facilitate an orderly transition.


In January board member Chris Gradel was removed from the board due to his indirect equity interest in ARC Capital Partners, which the company said meant Gradel was conflicted.


"While there are further challenges ahead, the board has acted and will continue to act diligently to extract value where possible and to protect shareholders' interests," said Chairman Steven Julien Feniger in a statement.


Shares in ARC Capital Holdings are untraded Friday, they last traded at USD0.545.







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Source: Alliance News


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