Appeal of Takeovers Panel Orders

September 11th, 2017

On 10 July 2017 Aurora Funds Management Limited (Aurora) as responsible entity for AFARF and AIB made an announcement in relation to the Orders made by the Australian Government Takeovers Panel (Takeovers Panel). Reasons for the orders were subsequently provided by the Takeovers Panel on 22 August 2017 (Reasons). Aurora has carefully considered the Reasons for the orders, and on 8 September 2017 Aurora applied to the Federal Court for a judicial review of the Takeovers Panel decision.

Aurora has consistently denied that it has acted in concert with Keybridge Capital Limited, or anyone else, in relation to the affairs of Molopo.

ABW is solely invested in AFARF so is also impacted by this application.

Off Market Takeover Bid for RNY Property Trust

August 29th, 2017

In accordance with section 633(1) item 5 of the Corporations Act 2001 (Cth) (Corporations Act), we enclose for lodgement a copy of the Bidder’s Statement dated 28 August 2017 in relation to the off-market takeover bid by Aurora Funds Management Limited (ACN 092 626 885), as responsible entity of the Aurora Property Buy-Write Income Trust (ARSN 125 153 648) (Bidder), for all of the ordinary units in the RNY Property Trust (ARSN 115 585 709) (Target).

A copy of the Bidder’s Statement was lodged with ASIC and given to the Target today.

For the purposes of sections 633(2) and 633(4) of the Corporations Act, the Bidder has set 7:00pm (Melbourne time) on Monday, 4 September 2017 as the register date.

Read more here.

Appointment of Compliance Committee Member

August 28th, 2017

Aurora Funds Management Limited (Aurora) is pleased to announce the Board has appointed Mr John Taylor as an external member of the Responsible Entity’s Compliance Committee to replace Mr Jim Hallam who has resigned. John’s appointment will take effect immediately.

John is a practitioner with over 25 years’ experience in the finance industry, working with clients on strategic issues relating to risk management, compliance, corporate governance, legislative change, formation research, stakeholder relationships and ethics. Sectors he has been involved in include managed funds, listed trusts, superannuation, trustee companies and building societies.

John is currently an Executive Director of Lexington Consulting Group, a specialist consulting group that provides advice on legislative change, risk management, compliance, capital raisings and establishment of new ventures. John is also the originator and co-convenor of the Independent Compliance Committee Forum and Chairman of the Cremorne Capital Limited Compliance Committee, a position he has held for more than 10 years.

Formerly, John was the Executive Director of Intertextual Pty Ltd, which developed risk and compliance management software program currently being used by many of Australia’s major superannuation funds, the Managing Director of Colonial Mutual Fund Ltd and General Manager of the Permanent Trustee Company Limited.

Letter to RNY Shareholders

August 4th, 2017

We understand that you are a fellow unitholder of the RNY Property Trust (RNY). Aurora Funds Management Limited (Aurora) currently holds 19.9% of the units of the RNY Property Trust (RNY) and has requisitioned a meeting of the unitholders of RNY to consider a change in its responsible entity from RNY Australia Management Limited (RAML) to Aurora.

We thought it as important that we communicate with you as a fellow unitholder in relation to why Aurora took this step. Aurora has previous tried to engage constructively with RNY about Aurora’s concerns, including by putting forward a potential recapitalisation proposal aimed at delivering unit holder value. As those attempts were unsuccessful, Aurora carefully considered all its options to enhance and protect the value of its investment in RNY, and concluded that the best way to achieve this is to change the management of RNY.

We believe changing the management of RNY is in the best interests of investors for these reasons:
 RAML has overseen a 97% – 99% reduction in unit holder value since listing, with RAML recently estimating the net asset value of a unit in RNY at 1-3 cents, compared to its initial listing price of $1.00.

 RAML appears to intend to exit RNY’s residual properties in an accelerated manner, reducing the potential returns for RNY’s unit holders. Aurora is of the view that implementing a ‘hold strategy’ for the properties and deferring any sale process would result in superior returns.

 While market fundamentals in the Westchester and Long Island property markets (the location of RNY’s key residual properties) have experienced challenging conditions, recent independent research on each of these regions identifies that market fundamentals are now improving or stabilised as former excess supply has been absorbed.

 RAML and related entities (which provide services to the RNY property portfolio, such as property management and leasing) appear to have charged $84.7m* in direct and indirect fees to RNY over the last 12 years. Aurora is of the view that appointing tenancy and asset managers that are unrelated to the responsible entity of RNY would likely result in improved tenancy results as well as lower costs for unit holders. Aurora is also of the view that there is opportunity to reduce RNY’s ongoing overhead costs.

 Aurora has been in discussions with US based financiers that have provided indications they would support a refinancing of the key properties on conditions more favourable than current. RAML previously rejected a proposal by Aurora to recapitalise RNY to allow it to retain these properties.

Aurora notes that entities related to RAML have entered into ‘poison pill’ arrangements that could be exercised if RAML is removed as responsible entity and, if exercised, could trigger a liquidation of RNY’s properties that would be expected to further impact unit holder returns. RAML should let unit holders know immediately of its intentions in this regard, and how RAML managed the potential for conflict of interest when these arrangements were put in place and how it intends to avoid its obvious self-interest if these arrangements are enlivened. Aurora also notes that it is possible that the meeting requisition may encourage RAML to provide an alternate proposal to generate value for RNY unit holders, and Aurora remains open to considering such a proposal. Aurora has also established a website (www.rnyREchange.net) where unit holders can subscribe to an email list and receive ongoing updates to ensure they are fully informed in relation to what is being proposed.

RAML is required to convene the meeting and despatch notice of the meeting together with a proxy from for unit holders to consider. A copy of the statement prepared by Aurora that will accompany the notice of meeting is available on the www.rnyREchange.net website.

We believe it is important that RAML is held to account for the performance of RNY as well provide the best opportunity for RNY unitholders to maximise the value of their investment. We accordingly encourage all unitholders to participate in the upcoming meeting.

RNY unit holders can contact me directly with any questions in relation to this proposal on +61 411 241 272 or bnorman@aurorafunds.com.au.

Liquidity Management

August 3rd, 2017

In the announcement by Aurora Funds Management Limited (Aurora) as responsible entity of the Aurora Fortitude Absolute Return Fund (AFARF) made on 27 July 2017 about AFARF’s proposed takeover bid for Molopo Energy Limited (Molopo), AFARF stated that Molopo shareholders who accept the takeover offer and elect to receive AFARF units will be able to request redemption of the units off-market at the prevailing net asset value based redemption price in accordance with AFARF’s constitution and fund updates.

In that regard, Aurora notes that redemption guidelines are currently in place to manage the liquidity requirements of AFARF. In summary, redemption requests are considered and processed on a quarterly basis and, as a general principle, AFARF will provide unit holders with access to liquidity by redemptions of up to 5% of the total funds under management in any given quarter (with applications being scaled back proportionately if aggregate redemption requests for a quarter exceed that threshold). Full details of the redemption guidelines are set out in the ‘Liquidity Management’ fund update dated 17 February 2017 available from Aurora’s website (http://www.aurorafunds.com.au/investment-funds/afarf-unlisted-managed-fund/fundupdates/).

The liquidity management of AFARF and redemption guidelines are subject to change, and the board of Aurora intends to review the guidelines in the course of finalising AFARF’s bidder’s statement for its proposed takeover of Molopo. Any updates in relation to this matter will be uploaded to Aurora’s website, and the bidder’s statement will include an explanation of any applicable redemption guidelines.

Requisitions meeting to change RE of RNY Property Trust

July 28th, 2017

Aurora Funds Management Limited (Aurora) currently holds 19.9% of the issued units of the RNY Property Trust (RNY) as responsible entity of the Aurora Property Buy-Write Income Trust, Aurora Global Income Trust and Aurora Fortitude Absolute Return Fund. On 18 July 2017, Aurora requisitioned a meeting of the unit holders of RNY to consider a change in its responsible entity from RNY Australia Management Limited (RAML) to Aurora.

Aurora took this step having tried to engage constructively with RNY about Aurora’s concerns, including by putting forward a potential recapitalisation proposal aimed at delivering unit holder value. As those attempts were unsuccessful, Aurora carefully considered all its options to enhance and protect the value of its investment in RNY, and concluded that the best way to achieve this is to change the management of RNY.

Read more here.

Strategic Investment in Molopo Energy Limited

July 27th, 2017

Following the proposed takeover bid announced this morning by Aurora Funds Management Limited (Aurora) for Molopo Energy Limited (Molopo), Molopo announced it had completed a ‘strategic investment’ and requested a suspension of trading in its shares until 31 July 2017 while it finalises its ‘technical announcement’.

Aurora Fortitude Absolute Return Fund and the Aurora Global Income Trust both have investments in Molopo. Molopo has been a ‘cashbox’ for more than 4 years, and since November 2015 has made repeated public statements that it would obtain shareholder approval before making a material investment. Further, under chapter 11 of the ASX Listing Rules, Molopo is required to obtain shareholder approval for any proposed transaction that would result in a significant change to the nature or scale of its activities.

Entering into a ‘strategic’ investment without shareholder approval may trigger a defeating condition under Aurora’s proposed takeover bid, potentially denying Molopo shareholders the opportunity to participate in the significant premium to Molopo’s recent market price afforded by the takeover bid.

Aurora looks forward to Molopo’s ‘technical’ announcement and will carefully consider all of its options if the Board of Molopo proceeds with the investment without shareholder approval.

Cash and/or Scrip takeover bid for Molopo Energy Limited (ASX:MPO)

July 27th, 2017

Aurora Funds Management Limited (Aurora) as responsible entity of the Aurora Fortitude Absolute Return Fund ARSN 145 894 800 (AFARF) is intending to make an off-market takeover bid under chapter 6 of the Corporations Act 2001 (Cth) for all the issued fully paid ordinary shares in Molopo at a bid price of $0.18 each.

Read more here.

Board Changes

July 26th, 2017

Aurora Funds Management Limited is pleased to announce the appointment of Mr Jeffrey E. Schwarz as an Independent Non-executive Director.

Jeffrey was the co-founder of Metropolitan Capital Advisors, Inc., a New York-based money management firm. He served as its Chief Investment Officer from the firm’s inception in 1992 until 2012.

Jeffrey serves as the Co-Chairman of the Board of Bogen Corporation, a telecommunications equipment provider (formerly publicly traded, now privately held); and as the Co-Chairman of the Board of Bogen Communications International Inc., which is the ultimate corporate parent of Speech Design GmbH, a global provider of messaging services to telecom carriers. Jeffrey previously served as the Chairman of the Board of Molopo Energy Limited, an Australian Stock Exchange listed oil and gas exploration company and as a member of the Board of Directors of Cyberonics Inc., a NASDAQ listed medical device company.

Jeffrey is a Summa Cum Laude graduate of the University of Pennsylvania’s Wharton School, B.S. in Economics with a concentration in Accounting and an M.B.A. with a concentration in Finance. Jeffrey is a member of the Board of Overseers for the Graduate School of Education at the University of Pennsylvania.

Aurora also announces that Mr James Hallam has today resigned as a Independent Non-executive Director. The Board thanks Mr Hallam for his valuable contribution to the Board during his time and wishes him all the very best in his future endeavours.

HHY – Notice of extension of Offer Period

July 17th, 2017

Aurora Funds Management Limited (ACN 092 626 885), as responsible entity of the Aurora Global Income Trust (ARSN 127 692 406) (“Bidder”) made an offer for all of the ordinary Units in the HHY Fund (ARSN 112 579 129) (“Target”),
as set out in the Bidder’s Statement dated 18 November 2016 and First Supplementary Bidder’s Stated dated 19 January 2017 (“Bidder’s Statements”).

Words defined in the Bidder’s Statements have the same meaning in this document unless the context requires otherwise.

In accordance with sections 650C, 650D and 630(2) of the Corporations Act, the Bidder hereby encloses a notice of variation confirming:
1. Bidder has extended the Offer Period to 7:00pm (Melbourne Time) Friday, 29 September 2017 (“Extension of the Offer Period”);
2. the new date for giving of the notice of the status of the Conditions is Friday, 22 September 2017 as a result of the Extension of the Offer Period; and
3. Target Unitholders who have already accepted the Offer before or on the date of the notice have a right to withdraw their acceptance of the Offer.

Read more here.

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