Neil Woodford’s listed business plans to cut debt after fund suspension

Neil Woodford’s listed business has said it plans to cut its debts and shake up its board after talks with shareholders, following the suspension of Mr Woodford’s major fund.

Woodford Patient Capital Trust has seen its share value slide over the past month since the star fund manager froze investors out of accessing cash they had placed into the Woodford Equity Income Fund.

The investment trust said it is mulling a share buyback to prop up its net asset value – the value of its assets once liabilities are removed.

The trust said it has had a “thoughtful and constructive” dialogue with shareholders over the past month.

Shortly after Mr Woodford suspended his flagship fund, the listed business said it was “pleased” with the progress of its portfolio companies and believed its operational performance had not been “impacted” by recent events.

Woodford Patient Capital Trust said it is now looking to reduce its gearing levels – the proportion of debt the company has relative to its equity.

The company said it is aiming to reduce gearing to below 10% within six months, and then to eliminate it completely within a year.

The investment trust also said that non-executive director Carolan Dobson, who joined the business in July 2016, has resigned from her position with immediate effect.

Stephen Cohen will be appointed as a new independent non-executive director, and as chairman of the audit, risk and valuation committee, it added.

Susan Searle, chairwoman of the trust, said: “The main areas of discussion for shareholders are consistent with the board’s immediate priorities – notably gearing levels, the share price discount to net asset value, valuations, board composition and the ongoing developments at the portfolio manager.

“As a result, the board is building on some of the immediate measures taken following the gating of the Woodford Equity Income Fund on June 3 and, as the situation remains fluid, will use the additional controls in place while continuing to monitor and assess the situation as it evolves, to ensure the long-term interests of shareholders are protected.

“We will continue to update shareholders as appropriate.”