Monash Absolute Investment Company (ASX:MA1) advances restructuring plans

• Monash Absolute Investment (MA1) has executed its implementation agreement to establish a new listed fund, the Monash Absolute Investment Trust
• The new ASX-listed managed fund forms a key part of the company’s wider restructuring efforts
• The restructuring will, in effect, de-list the listed investment company (LIC) and replace it with a listed unit trust (ETMF)
• The restructure is expected to be completed by September 30, 2020
• Monash Absolute Investment is trading 0.53 per cent lower for 95 cents per share

Monash Absolute Investment (MA1) has executed its implementation agreement to establish a new listed fund, Monash Absolute Investment Trust.

Under the agreement, the company has proposed to transfer units in the investment trust, or ETMF, to MA1’s shareholders. This will be in exchange for the connected transfer of the company’s listed investments to the ETMF.

The transaction is part of a wider restructuring effort that will, in effect, de-list Monash Absolute Investment Company and replace it with the ETMF, Monash Absolute Investment Trust.

The trust company, RE Services, otherwise called Perpetual, will act as the proposed responsible entity for the transaction and will assist in the transfer of the listed investments.

Paul Clitheroe, Chairman of Monash Absolute Investment Company, said the proposed move to an ETMF is of real benefit to shareholders.

“The Board and management have been concerned about the share price trading at a significant discount to its net tangible asset (NTA) and have been working on a solution.

“If approved, the new ETMF will provide investors with a liquid investment that will trade at or near NTA, with a small bid or ask spread and a market maker providing liquidity as needed,” he added.

The company says that a number of varying initiatives were explored as solutions for the liquidity and NTA discount problems. These ranged from both on-market and off-market buybacks, to improved communications and the payment of dividends.

After extensive consideration, MA1’s Board decided that a restructure would allow shareholders’ investments to trade at, or close enough to, NTA, as opposed to the current 20 per cent discount.

While the restructure remains subject to regulatory and shareholder approval, it is expected to be completed by September 30, 2020.

Monash Absolute Investment Company is trading 0.53 per cent lower for 95 cents per share at 12:38 pm AEST.