Offer for Subscription - Update

Oxford Technology 2 VCT Plc (the "Company”)

Legal Entity Identifier: 2138002COY2EXJDHWB30
16 February 2023

Offer for Subscription – Update

Further to the announcement made by the Company on the 18 May 2022 with regards to the offer for subscription ("Offer”) of up to 20,000,000 Leisure Shares, details of which were set out in a prospectus published by the Company dated 18 May 2022 ("Prospectus”), the Board of the Company ("Board”) regrets to announce that it has withdrawn the Offer with immediate effect.

The Board has been in regular contact with the Offer’s promoter, Edition Capital Investments Limited ("Edition”) since the Offer was launched. Until recently, Edition has been confident that sufficient funds could be raised in the current tax year to launch the new Leisure Share class. However, there remains a large amount of capacity in the wider VCT marketplace, especially from established players, and this has made it difficult to have certainty that Edition will be able to launch a new share class able to deliver its investment strategy in a timely manner (and in any event before the end of the current tax year).

In order to ensure investors are not unfairly impacted by this uncertainty, we have decided to withdraw the Offer. Any funds already received from prospective investors will be promptly returned as set out in the terms and conditions of the Prospectus.

The Board is disappointed that it has not been able to further expand the asset base of the Company at this time, which has long been one of its stated objectives. The merger of the four Oxford Technology VCTs in June 2022 leaves the Company in a much stronger position to successfully allot shares in due course. It gives the Company greater critical mass (net assets of £9.1m at 31 August 2022 compared to £1.3m at 28 February 2022), reduces operating costs for each share class and ensures the Company can continue to meet all the VCT Qualifying Test requirements, which were getting increasingly difficult with the reducing size of the separate VCTs. Moreover, had the new Leisure Share Class been issued, there would have been a further step reduction in costs payable by the existing share classes, which will no longer happen in the short term. All costs payable by the Company linked to the merger have already been expensed, so there is no further impact expected on the P&L.

As a result of the withdrawal of the Offer there will be no change of manager, nor name change of the VCT at this time and Oxford Technology Management Ltd (OTM) will continue to advise the Board under the current agreements.

The Board hopes to be able to work again with Edition. The Board still believes that a future offer (i.e. raising new VCT funds in a new share class) with either Edition or another manager remains the way forward. This should allow the further cost savings previously outlined for existing shareholders whilst the portfolios continue to mature before ultimate asset realisations and distributions to shareholders. Any potential future offer would require the advance approval of the Company’s shareholders.

Edition has been an active investor in the tax efficient space for six years, with a focus on EIS investment. Edition looked to provide access to its EIS investment strategy through a VCT to enable more investors to participate and has worked with the Company to create an attractive investment proposition since late 2021 which worked for the existing investor base as well as new investors.

Edition commented ‘Whilst it is disappointing to be unable to complete the process now, we believe the work done to date (including the completion of the merger) leaves the Company in a strong position to successfully allot shares next year. We remain confident in the underlying investment strategy and the Edition EIS fund remains open and actively making investments in the leisure sector, having deployed over £50m into 30+ leisure businesses.’   

For further information, please contact:

Lucius Cary, Andrea Mica and Richard Roth via?vcts@oxfordtechnology.com

Edition: enquiries@editioncapital.co.uk or 0203 145 1851

This announcement contains inside information as stipulated under the UK version of the Market Abuse Regulation No 596/2014 which is part of English Law by virtue of the European (Withdrawal) Act 2018, as amended. Upon the publication of this announcement via a Regulatory Information Service, this information is now considered to be in the public domain.