| Mon 23 Dec 2013, 12:30 | | TRACKHEDGE (PTY) LIMITED - Update on closure of Newrand ETF Structure |
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NRD 201312230020A
Update on closure of Newrand ETF Structure
TRACKHEDGE (PROPRIETARY) LIMITED
(“Trackhedge” or “the IssuerCo”)
(Registration number 2003/008245/07)
Issuer code: THG
JSE Code: NRD
ISIN: ZAE000047841
UPDATE ON CLOSURE OF NEWRAND ETF STRUCTURE
Trackhedge (RF) (Proprietary) Limited (the “Company”) is a special purpose vehicle with the sole purpose of issuing NewRand
Index Securities (the “Securities”) listed on the JSE Limited and which operates principally in South Africa. The Securities are
created with the objective of tracking the performance of a customised index of Rand hedge shares (the “Underlying Portfolio”)
created by Absa Corporate and Investment Bank, a division of Absa Bank Limited (the “NewRand Index” or, the “Index”) and
provided and calculated by FTSE and the JSE Limited ("FTSE/JSE"). The Index composition and calculation methodology are
designed with the objective of maximising long-term correlation with the Rand/USD exchange rate.
As a follow up to the discussions and investigations around the closure of the NewRand ETF structure as notified in the SENS
announcement dated 27 September 2013, the Board of the Company (the “Board”) has confirmed that the value of the Securities
and the corresponding Underlying Portfolio have now decreased through disinvestment by nearly 90 % from only 2 years ago. The
result of this drop in the value of assets means that, with the relatively high fixed costs of operating the Company, the costs are
being carried by a significantly smaller number of Investors with the resultant greater contribution per Rand invested.
It is therefore incumbent on the Board to protect the interests of the Investors. To this end the Board has explored all methods of
minimising the potential downside to investors carrying a greater proportion of costs, including the orderly winding up of the
Company. Furthermore, the reduction in the Underlying Portfolio and corresponding liabilities give rise to a material uncertainty
about the ability of the Company, without causing unnecessary potential losses to investors, to continue as a going concern.
Investors are advised that their investment is fully physically backed by the Underlying Portfolio. In the event of an orderly winding
up of the Company the liability to Investors will be substantially met by the sale of the securities in the Underlying Portfolio and it is
therefore highly unlikely to be prejudicial to the Investors. However further disinvestment; in particular by any major institutional
investor, will mean the costs could significantly erode value to the extent that it could become prejudicial to investors.
After due consideration and investigation, and in order to protect the interests of the investors, the Board is entering into
discussions with the JSE as to how best to affect an orderly winding up of the Company, de-listing and redemption of the
Securities.
Should you require further information, kindly contact your financial advisor or your broker.
Further communication to investors will follow in due course.
23 December 2013
Sponsor
Absa Bank Limited (acting through its Corporate and Investment Banking division)
Date: 23/12/2013 12:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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