Keystone Positive Change (KPC) has announced that it intends to open and immediately adjourn general meeting scheduled for 27 January 2025, that was meant to allow shareholders to vote approve a scheme of reconstruction that offers shareholders an uncapped cash exit in February 2025 and/or the option of a rollover into a more liquid fund with a similar global impact strategy. The scheme was initially announced on 30 September 2024 (click here to see our coverage of this) but this was prior to the announcement of 18 December by Saba Capital that it would vote against the scheme, which it is able to block, given the size of its shareholding (click here to see our coverage of this).

KPC’s Board says that it is frustrated that it will have to adjourn the shareholder meetings to be held in connection with the scheme until after the general meeting that was requisitioned by Saba (now scheduled for 3 February 2025), noting that KPC has already incurred many of the scheme costs to date and that, if the scheme were to go ahead as planned and fail, it would need to be reconstituted and shareholders would suffer material additional costs. However, the scheme can be postponed without incurring material additional costs.

KPC’s board says that, if Shareholders VOTE AGAINST ALL Saba’s proposals on 3 February 2025 as it unanimously recommends, it intends to continue with the Scheme and return capital to shareholders in line with its previous proposals. KPC’s Board has re-emphasised its confidence in the postponed Scheme which it believes is in the best interest of Shareholders as a whole.

[QD comment: Like Keystone Positive Change’s board, we were very disappointed when Saba said that it intends to vote against the board’s scheme of reconstruction as, given the size of Saba’s shareholding, this blocks the option of a cash exit for other shareholders for purely selfish reasons on Saba’s part.]

Comments from Karen Brade, chair of Keystone Positive Change

“We announced the Scheme on 30 September 2024 following a broad consultation with our shareholders, who indicated a preference for a return of cash with an option to rollover into a more liquid fund with a similar global impact strategy. Your Board acted on this feedback and offered shareholders exactly that: certainty of an imminent, uncapped cash exit and a rollover into Baillie Gifford’s Positive Change fund, or a combination of the two if desired.

“Unfortunately, Saba waited until 18 December to requisition a general meeting to remove your independent Board and formally inform us that it intends to vote against the Scheme, which would guarantee its failure. This destructive behaviour highlights just how disingenuous Saba has been and demonstrates its desire to take control of your Company.

“In light of Saba’s current voting intentions, the Board has decided it is in the best interests of all shareholders to adjourn the Scheme meetings to a later date.

“We encourage all shareholders to focus their attention on the Requisitioned General Meeting scheduled for 3 February. This meeting was requisitioned by Saba with the intention of removing your Board and taking control of the Company. We urge shareholders to vote against all Saba’s resolutions. The stakes are high – if Saba succeeds in taking over the Board, it will have the power, from a minority position, to make significant changes to the investment strategy, appoint itself as manager and raise fees.

“Feedback from all other shareholders to date has been unanimously supportive of the Scheme and highly critical of Saba’s proposals. To ensure we prevent Saba, a minority shareholder, from taking control of your Company, we need you to come out and vote by midday on 30 January, or as early as 23 January if voting via one of the many platforms.

“If shareholders vote to overturn Saba’s proposals on 3 February, the Board will immediately refocus its efforts on delivering a full cash exit and will schedule a date for shareholders to vote on the Scheme as soon as practicable.”