Having given the market a heads-up on its plans, RM Secured Direct Lending PLC (LON:RMDL) intends to place some “C” class shares to raise funds.
The board believes that the current opportunities available to the Investment Manager will enable it to diversify further its existing portfolio and spread the fixed costs of running the company across a wider base, thereby reducing the ongoing costs of the company on a per share basis.
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The directors further believe that growing the size of the company should increase secondary market liquidity for investors and may make the company more attractive to a broader investor base.
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RM Secured Direct is an investment trust focused on secured debt. It indicated last month it was planning to raise fresh capital to reinvest.
It has chosen to do so through the issue of “C” shares, as this will allow the proceeds from the issue to be accounted for and managed in a separate pool that once deployed, will convert into ordinary shares as specified in the company’s flotation prospectus.
By accounting for and managing these assets separately, holders of existing ordinary shares will not be exposed to a portfolio containing a substantial amount of uninvested cash prior to the conversion of the “C” shares.
Holders of the “C” shares will not be entitled to receive dividend payments paid out on the ordinary shares.