The board of the Neuberger Berman Global Monthly Income fund plans to wind-down the portfolio due expectedly to shrinking assets, it said in a London Stock Exchange announcement today (21 November).
Following a review of the company's strategy and future prospects, the board has decided not to implement its semi-annual cash exit facility in December and instead request approval by shareholders to place the trust into a managed wind-down.
The board previously announced in September 2020 that if the trust's NAV dropped beneath £150m in the future, it would propose a wind-down.
As at 17 November 2022, NAV was £178.6m, but the board has anticipated that the likely participation in next month's semi-annual cash exit facility offer would result in the company's NAV falling below the £150m threshold.
"That probable outcome, combined with the company's persistent share price discount to NAV per share and recent feedback from shareholders, has led the board to believe that it is in the best interests of the company and its shareholders as a whole that the company be placed into a managed wind-down," the board said in a statement.
The trust is currently trading at a 6.45% discount, according to the Association of Investment Companies. Over the last three years, its share price total return is down 1.4%, while the Debt - Loans & Bonds AIC sector is down 0.5%.
Under the proposals, the board anticipates that the trust's assets would be "realised in an orderly manner" and that it would make capital distributions to shareholders during the wind-down period "as and when sufficient cash is realised to make it economically expedient to make a distribution".
Based on current and anticipated market conditions, the board expects that the process of selling the most illiquid assets in the portfolio could require a period of up to 24 months, but said there is no guarantee that assets will be realised within a particular time frame.
"Capital distributions will always be made at the board's discretion. Further analysis on the liquidity of the portfolio and the expected timings of capital distributions to shareholders will be provided in due course," the statement read.
The listing of the company's shares will be maintained during the wind-down period until it is appropriate to put forward proposals to shareholders to place the trust into formal liquidation, the board said.
The NB Global Monthly Income fund intends to publish a circular by the end of this year setting out the full details of the proposals and calling for an extraordinary general meeting in late January 2023, where it will seek shareholder approval.