Attempts by the Blue Sky Alternatives Access Fund (ASX: BAF) to extricate itself from current management have hit a stumbling block as negotiations drag on with receivers KordaMentha and US vulture fund Oaktree.
In a letter to shareholders ahead of the upcoming annual general meeting scheduled for 13 November, BAF chair Michael Cottier (pictured) noted the ongoing connection to Blue Sky Alternative Investments (ASX: BLA) - now in administration - had impacted the company's share price.
BLA is the parent company of BSAAF, BAF's current manager, but the fund has been in talks to determine a new manager it can propose to shareholders for a vote.
If a satisfactory deal cannot be reached, one alternative would be the orderly wind-down of BAF and the return of capital to shareholders.
"At the time of writing this letter, the manager selection process outlined in my letter to you dated 21 August 2019 and related negotiations with the parties that are required to be able to put a proposal to you are well advanced but incomplete," Cottier said.
"Your Board has worked very hard to get a new manager proposal to this meeting. Regrettably, it has not been possible to include this business for consideration at the AGM."
Instead, he indicated an extraordinary general meeting (EGM) for shareholder approval will be convened as soon as negotiations are concluded.
"While the Board has spent a significant amount of time on the manager transition, FY19 was also a year of consolidation for the Company," he said.
"The ongoing connection of the Company to Blue Sky had a notable and continuing destabilising impact on the BAF share price, with questions raised about the Company's independence, asset valuations and its future direction. In light of these uncertainties, the share price has languished at an unacceptable level well below the Net Tangible Asset ('NTA') value."
Despite all the problems with the most well-known Blue Sky fund coupled with increased legal and external audit, BAF saw its profit rise by a third to reach $6.71 million in FY19.Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.
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