The board of Residential Secure Income has proposed that the company is wound down, telling shareholders there are “no quick fixes” to the problems besetting smaller listed real estate investors.
In a stock market notice, the seven-year-old company said its market capitalisation of £101m means it is “of a size which might deter some potential investors due to lower share liquidity and the increasing demand from investors for larger listed funds”.
It added that over the past two years its shares have traded at a “persistent, material discount” to the net asset value.
“The board has concluded that a proactive approach, executing a managed wind-down and portfolio realisation strategy, which prioritises maximisation of proceeds from portfolio sales whilst ensuring the interests of residents are protected, and a subsequent return of capital to shareholders is the appropriate course of action and in the best interests of the company’s shareholders,” it said.
The move will now be put to a shareholder vote.
Chairman Rob Whiteman said: “The headwinds for smaller listed real estate businesses have been well flagged, and there are no quick fixes. The board and fund manager are focused on maximising returns to all shareholders. Having explored a range of options with our advisers, the board has decided that the best course of action is a proactive managed wind-down and portfolio realisation strategy over an appropriate time period. We will be asking shareholders to approve this at a general meeting in due course.”
Image © Oleg Gamulinskiy/Pixabay
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