VCT advice please - Octopus Eclipse VCT plc

happyhero

Hi, I am helping my stepfather simplify his investments as he is 87 and wants to make things easier to manage and over the years he has invested in some VCT's.

I have helped him sell a couple already through Hargreaves Lansdown and he has invested the money in funds with them within an NISA but he has one VCT left that Hargreaves Lansdown said they were in liquidation and we should wait and see what happens before trying to sell anything but that was about the limit of what they could tell me for now. The VCT is Octopus Eclipse VCT plc.

That was at the beginning of December 2014, and Octopus themselves don't seem to be very fourth coming with info, ie no paperwork lately to let us know what is happening, time scales etc., so can anybody tell me what is happening with this VCT and any time scales please?

I cannot remember why exactly but I think I got the impression from Hargreaves when I spoke to them, that liquidation did not mean we would get nothing and that something positive may still come from this, so anybody know any more please?

I would be grateful for any new light anyone can shine on Octopus VCT developments and what to expect.

happyhero

pretty please

gadgetmind

The Motley Fool forums have a VCT section you could try, but unless someone has been invested through the various mergers of the Octopus products, I doubt they know much detail.

Ark_Welder

You need to be clear which VCT you're on about. There are (or have been) both an Octopus Eclipse VCT and an Octopus VCT - the two are quite separate so do not refer to 'Eclipse' as 'Octopus VCT'.

Octopus Eclipse VCT is not in liquidation. On the contrary, it is in th process of raising additional funds so there ought not to be a problem with selling an existing holding.

Octopus VCT is in liquidation and the holdings were merged into Octopus Apollo VCT, which is also raising new funds.

Other VCTs from the Octopus stable have also been merged (and liquidated), namely Octopus Titan 1, 3, 4 and 5, all of which have been merged into Octopus Titan VCT (previously called Octopus Titan 2 VCT).

http://www.octopusinvestments.com/investors/products/vct/

You can click on the names of the VCTs in the column on the right-hand side for info on each one.

gadgetmind

The Octopus Eclipse VCTs have also been merged, and here is the report of Octopus Eclipse VCT 3 being liquidated and merged into the Octopus Eclipse VCT.

http://www.investegate.co.uk/octopus-eclipse-3--oec3-/gnw/octopus-eclipse-vct-3-plc---general-meeting-and---/20121031154547H4163/

Ark_Welder

gadgetmind wrote: »

The Octopus Eclipse VCTs have also been merged/

That process, however, was completed two years ago, whereas the current liquidations were initiated only late last year.

http://www.investegate.co.uk/octopus-eclipse-vct--oec1-/gnw/octopus-eclipse-vct-plc---merger-results/20121031152246H4150/

gadgetmind

So, what happens to the previous holders of the equity in these insolvencies and liquidations? Are shirts generally lost all round?

Ark_Welder

Liquidation does not necessarily imply insolvency - in the sense of liabilities exceeding assets

My experience of VCT mergers is that new share certificates are issued in the new (i.e. continuing) VCT, and rather quickly (it certainly doesn't take two years). The number of new shares being apportioned according to the terms in the documents detailing the merger, so based upon relative NAVs (less costs). The assets of the liquidating VCT are transferred to the new VCT. No need for them to be sold because there are no creditors to be paid of as would be the case in an insolvency. The new shares can be traded once the new certificates are received. The old VCT is delisted and those certificates become obsolete. Shirts retained all round.

My experience of liquidation due to insolvency is that a nominal amount per share might eventually get paid out to shareholders. But this is the type of insolvency where the company does go splat rather than bond holders getting 99% of the equity - which is near-splat for the existing shareholders.

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