Pension-backed water fund in breach of London exchange listing rules

Possible change to “premium” London listing

A water investment fund in which the £8.6bn (€10.4bn) West Midlands Pension Fund has an almost 30% stake may have to exit the London Stock Exchange following a breach of listing rules.

Aqua Resources Fund Ltd. has announced in a filing that it is in breach of the UK Listing Authority (UKLA) rules following a recent transaction in its shares.

The development “might require a change from the company’s premium LSE listing” says chairman Hasan Askari.

Specifically, it is no longer compliant with free float requirements following the acquisition of a 6.4% stake by a Nicholas John Greenwood on April 23.

“Shareholders should note that as a consequence of the company failing to meet this listing requirement, the UKLA is entitled to withdraw the listing,” Aqua said. But it said it understands the UKLA will allow it some time to comply with the rules.

“The Board are considering this issue with their advisers and with the UKLA and will make a further announcement as soon as practicable.”It comes as the Guernsey-domiciled fund, managed by Cayman Islands-exempted FourWinds Capital Management, reported a 15.6% decline in net asset value for 2011 – hit in part by an 84% decline in the shares of portfolio company China Hydroelectric Corporation. And it has also not been successful in previously announced attempts to find a merger or consolidation partner.

“No credible alternative has emerged”

“The Board has explored these alternatives and has been in active discussions with the core shareholders but unfortunately, in spite of our efforts and those of our advisers, no credible alternative has emerged as yet,” the fund said.

West Midlands owns 29.7% of the fund, which was set up in 2008 to invest in global water opportunities.
FourWinds is headed up in the UK by former Sainsbury’s pension investment controller Chris Armitage.