There are other routes to ARC’s pot of gold
Would the shareholders of African Rainbow Capital Investments not benefit more from the liquidation of the company’s assets than from the planned delisting?
The recent announcement by African Rainbow Capital Investments (ARC) that it intends to delist at a discount to its stated NAV raises questions about other options or alternatives that might be open to the Patrice Motsepe-aligned investment company.
Discount control policies, or discount control mechanisms, for closed-ended investment trusts are now standard in the UK. They are also emerging as an option in Australia’s closed-ended listed investment companies (LIC) circles. The basic premise is that the board sets a range of discounts and premiums to target. Generally, the range is from a 5%-10% discount to NAV on the one hand and a 5%-10% premium to NAV on the other...
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