Gravis trusts GCP Asset Backed Income and GCP Infrastructure agree to combine assets

investmentweek.co.uk:

The GCP Infra board said the proposed merger will bring multiple benefits to both existing and new shareholders.

In a stock exchange notice today (11 August), the board said this will be enacted via a winding-up of GABI, with its assets transferred to GCP in exchange for shares, which will be issued to GABI shareholders on a formula asset value for FAV basis — FAV being the net asset value minus each fund's transaction costs for the deal. 

Shareholder approval will be required from both GCP and GABI shareholders, with completion expected before the end of 2023.

Once the merger is completed, GCP's board has proposed an increased return of capital to shareholders and the trust would reduce its leverage, while also amending the investment policy to focus on sustainable assets. 

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The portfolio managers of the enlarged GCP will continue to be Philip Kent, Ed Simpson and Max Gilbert, with support of wider Gravis business including CIO of private market investment funds. 

Separately, the board of GCP said it is in discussions with the board of RMII with the intention of agreeing a potential combination of a «material proportion of its assets to GCP Infra» in exchange for shares, with a further update expected in due course.

As previously reported, RMII is also considering one other proposal it has received as part of its ongoing strategic review, however there is currently no certainty that either proposal will develop into a recommended transaction.

The GCP board said the proposed merger will bring multiple benefits to both existing and new shareholders. 

To tackle its prevailing discount, GCP expects to commit to utilise £200m in the two-year period following