NOT FOR RELEASE,
PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR
INDIRECTLY, TO US PERSONS OR IN OR INTO THE UNITED STATES, OR INTO OR FROM
CANADA, AUSTRALIA, JAPAN, NEW
ZEALAND AND THE REPUBLIC OF SOUTH
AFRICA.
This announcement
is an advertisement and not a prospectus. This announcement does
not constitute or form part of, and should not be construed as, any
offer for sale or subscription of, or solicitation of any offer to
buy or subscribe for, any securities in Aberforth Geared Income
Trust plc (the "Company") or Aberforth Split Level Income Trust plc
("ASLIT") or securities in any other entity, in any jurisdiction,
including the United States, nor
shall it, or any part of it, or the fact of its distribution, form
the basis of, or be relied on in connection with, any contract or
investment decision whatsoever, in any jurisdiction. This
announcement does not constitute a recommendation regarding any
securities. Any investment decision must be made exclusively on the
basis of the final prospectus published by ASLIT and any supplement
thereto or the final circular published by the Company.
19 May
2017
Aberforth Geared Income Trust plc (the
“Company”)
Proposals for the reconstruction and
voluntary winding up of the Company
Introduction
As announced by the Board on 27 April
2017, the Company has reached agreement with Aberforth Split
Level Income Trust plc (ASLIT) on the terms of the reconstruction
and winding up of the Company, under which ASLIT will act as a
rollover option for investors in the Company. The Company has today
published a circular in respect of the Proposals, which are
conditional on, among other matters, the approval by Ordinary
Shareholders at general meetings of the Company to be held on
15 June 2017 and 30 June 2017.
Under the terms of the proposed reconstruction, Ordinary
Shareholders (other than Overseas Shareholders) will be able to
exchange some or all of their investment in the Company for ASLIT
Ordinary Shares and ZDP Shareholders (other than Overseas Holders)
will be able to exchange some or all of their investment in the
Company for ASLIT Ordinary Shares and/or ASLIT ZDP Shares.
Shareholders will also be able to realise some or all of their
investment in the Company for cash. Overseas Holders will, if the
Proposals become effective, receive cash in respect of their
holdings.
Under the Proposals, ZDP Shareholders will be entitled to elect
to receive a cash amount in respect of their final capital
entitlement of 159.7 pence per ZDP
Share. ZDP Shareholders who do not make a valid Election
under the Proposals will be deemed to have elected for the ZDP Cash
Option. This being the case, in accordance with the Articles, ZDP
Shareholders are not entitled to vote on the Proposals.
Information on Aberforth Split Level
Income Trust plc
ASLIT is a new split capital investment trust launching on
3 July 2017 which will invest in a
diversified portfolio of small UK quoted companies. ASLIT will have
two classes of shares in issue: the ASLIT Ordinary Shares and
the ASLIT ZDP Shares. On Admission, there will be four ASLIT
Ordinary Shares in issue for every one ASLIT ZDP Share.
ASLIT’s investment objective is to provide ASLIT Ordinary
Shareholders with a high level of income, with the potential for
income and capital growth, and to provide ASLIT ZDP Shareholders
with a pre-determined final capital entitlement on the planned
ASLIT winding up date of 1 July 2024.
ASLIT has a similar investment policy to that of the Company and it
will also be managed by Aberforth Partners, the Company's
investment manager. On its launch, ASLIT is not expected to
be larger than the Company.
ASLIT's dividend policy, similar to that of the Company, is to
distribute a significant proportion of its net revenue (after the
payment of expenses and taxation) in the form of dividends and the
ASLIT Ordinary Shareholders will be entitled to receive all such
dividends. In the absence of unforeseen circumstances, ASLIT
is expecting to pay dividends totalling not less than 4 pence1 per Ordinary Share in respect
of the period from its Admission to 30 June
2018. The ASLIT ZDP Shareholders will not be entitled to
receive dividend payments. The final capital entitlement for ASLIT
ZDP Shareholders on ASLIT's planned winding up date of 1 July 2024 will be 127.25
pence. This represents a Gross Redemption Yield of 3.5 per
cent. per annum over the life of the ASLIT ZDP Shares, based on
their issue price of 100 pence per
ASLIT ZDP Share under the Issues.
ASLIT is proposing to issue ASLIT Ordinary Shares and ASLIT ZDP
Shares to existing Shareholders who elect to participate in the
Rollover Options in consideration for the Rollover Funds.
Under the terms agreed with ASLIT (but subject to the success of
a placing and offer for subscription by ASLIT), ASLIT is also
expecting to acquire part or all of the Company’s remaining assets
including securities and cash. The consideration for these assets
will be paid by ASLIT in cash. ASLIT is not seeking to raise funds,
pursuant to the ASLIT Placing and Offer, in excess of an amount
which would enable ASLIT to acquire all of the remaining assets of
the Company and to pay certain costs and expenses associated with
the Proposals. In the event that the net proceeds of the
ASLIT Placing and Offer exceed the value of the Remaining AGIT
Portfolio, applications under the ASLIT Placing and Offer will be
scaled back accordingly. On launch, ASLIT will therefore not
be larger than the Company. Furthermore, the total number of
ASLIT Ordinary Shares and ASLIT ZDP Shares issued by ASLIT pursuant
to the Proposals and its placing and offer for subscription will be
in the ratio of 4:1 respectively.
Background to the Proposals
The Articles require the Directors to convene a general meeting
of the Company for no later than 30 June
2017, at which a special resolution will be proposed to wind
up the Company voluntarily by not later than 30 June 2017. In determining the structure and
timing of the Proposals, the Board has sought to balance the
interests of the Ordinary Shareholders and the ZDP Shareholders. A
straightforward liquidation of the Company (in the absence of a
rollover alternative) would require the Company’s entire investment
portfolio to be realised in the market in advance of 30 June
2017. It is expected that the portfolio realisation costs in
these circumstances would be significantly higher than under the
Proposals and this additional cost would be borne by the Ordinary
Shareholders. Under the Proposals, it is anticipated that a
material proportion of the investments of the Company will be
transferred to ASLIT at significantly lower realisation cost to
Ordinary Shareholders than would be the case under a
straightforward liquidation. There is no guarantee that ASLIT will
raise sufficient cash under the ASLIT Placing and Offer to acquire
the Remaining AGIT Portfolio, and as a result the Company is likely
to incur costs in realising such part of its portfolio which is not
acquired by ASLIT.
For illustrative purposes only, the costs of the Proposals
(excluding any portfolio realisation costs) which are expected to
be incurred by the Company would be expected to represent a
reduction of 0.36 pence or 0.14 per
cent. in the NAV per Ordinary Share of 252.97 pence at the Latest Practicable Date after
taking into account the final capital entitlement of the ZDP
Shares.
Based on the Assumptions, Ordinary Shareholders who elect, or
are deemed to elect, to rollover into ASLIT Ordinary Shares will
suffer cumulative costs of the Proposals and the launch of ASLIT
which would be expected to represent a reduction of 4.43 pence or 1.75 per cent. in the NAV per
Ordinary Share of 252.97 pence at the
Latest Practicable Date after taking into account the final capital
entitlement of the ZDP Shares. Based on the Assumptions, ZDP
Shareholders who elect to rollover into ASLIT Ordinary Shares will
suffer costs of the launch of ASLIT which would be expected to
represent a reduction of 2.54 pence
or 1.59 per cent. in the TAV per ZDP Share of 159.7 pence.
The Proposals
Under the Proposals, the Company will be wound up voluntarily
and a scheme of reconstruction under section 110 of the Insolvency
Act 1986 will be implemented. Under the terms of the Scheme,
Shareholders may elect for the options set out below. Shareholders
can make different Elections in respect of different Shares which
they hold. Overseas Holders will, if the Proposals become
effective, receive cash in respect of their holdings.
-
Ordinary Shareholders
Ordinary Shareholders may elect to:
-
rollover some or all of their investment in the Company into ASLIT
Ordinary Shares at 100 pence per
ASLIT Ordinary Share (the Ordinary Rollover Option); or
-
receive cash in respect of some or all of their investment in the
Company (the Ordinary Cash Option).
Ordinary Shareholders (other than Overseas Holders) who do not
make a valid Election under the Proposals will be deemed to have
elected for ASLIT Ordinary Shares. Accordingly, Ordinary
Shareholders who wish to receive ASLIT Ordinary Shares under the
Proposals in respect of their entire holding of Ordinary Shares
need not submit a Form of Election.
Ordinary Shareholders will have the opportunity to acquire ASLIT
ZDP Shares and additional ASLIT Ordinary Shares through the ASLIT
Placing and Offer.
-
ZDP Shareholders
ZDP Shareholders may elect to:
-
rollover some or all of their investment in the Company into ASLIT
ZDP Shares at 100 pence per ASLIT ZDP
Share (the ZDP Rollover Zero Option);
-
rollover some or all of their investment in the Company into ASLIT
Ordinary Shares at 100 pence per
ASLIT Ordinary Share (the ZDP Rollover Ordinary Option);
or
-
receive cash in respect of some or all of their investment in the
Company (the ZDP Cash Option).
ZDP Shareholders who do not make a valid Election under the
Proposals will be deemed to have elected for the ZDP Cash
Option. Accordingly, ZDP Shareholders who wish to receive
cash under the Proposals in respect of their entire holding of ZDP
Shares need not submit a Form of Election.
ZDP Shareholders will have the option to request (by completing
the relevant boxes on their Form of Election) that, if they are
scaled back in respect of any part of their election for ASLIT
Shares (such scaled back elections being the Scaled Back ZDP
Election) they receive ASLIT Ordinary Shares and ASLIT ZDP
Shares in respect of the Scaled Back ZDP Election in the Ratio,
subject to ASLIT not being larger than the Company.
Under the Proposals:
-
the Company will be placed into members’ voluntary liquidation
and its business and assets will be divided into three pools on the
basis of a valuation undertaken as at the Calculation Date,
namely:
-
the Ordinary Rollover Fund and the (separate) ZDP Rollover Fund,
each of which will comprise investments and other assets (including
cash) which are capable of being held by ASLIT in order to
facilitate the transfer of assets to ASLIT and which will represent
the respective entitlements of holders of Ordinary Shares and ZDP
Shares in respect of which elections have been made (or are deemed
to have been made) for the Rollover Options; and
-
the Liquidation Fund, which will comprise such of the cash and
other assets of the Company as are estimated by the Liquidators to
be sufficient to provide for all current and future, actual and
contingent liabilities of the Company, including a retention
(estimated at £50,000) in respect of unascertained and unknown
liabilities, and the entitlements of those Shareholders who have
elected (or are deemed to have elected) for the Cash Options;
and
-
ASLIT will acquire part or all of the investments and other
assets of the Company (including cash), the consideration for which
will be satisfied by:
-
the issue by ASLIT of ASLIT Ordinary Shares and ASLIT ZDP Shares to
those Shareholders who elect (or are deemed to have elected) for
the Rollover Options under the Proposals; and
- a
cash payment by ASLIT to the Company in an amount equal to the
ASLIT Net Issue Proceeds.
As noted above, in order to finance its intended acquisition of
all or part of the Remaining AGIT Portfolio, ASLIT is proposing to
issue new ASLIT Ordinary Shares and ASLIT ZDP Shares through the
ASLIT Placing and Offer. ASLIT is not seeking to raise new capital
beyond the amount required to purchase all of the Remaining AGIT
Portfolio and to meet certain costs.
Final interim dividend
As announced by the Company on 27 April
2017, the Board has declared a final interim dividend of
8 pence per Ordinary Share.
This dividend will be paid on 31 May
2017 to Ordinary Shareholders on the Company's register of
members on 12 May 2017. No further
dividends are expected to be paid by the Company after the payment
of this final interim dividend. Ordinary Shareholders are entitled
to the undistributed revenue reserves of the Company. These will
form part of the Ordinary FAV and will therefore either be rolled
over into ASLIT Ordinary Shares or paid out as cash under the
Ordinary Cash Option.
Benefits of the Proposals
The Directors consider that the Proposals have the following
benefits for Shareholders:
-
they offer Shareholders the opportunity to rollover their
investments in a tax efficient manner (without incurring an
immediate liability to UK capital gains tax) into ASLIT Shares;
-
they enable Shareholders to maintain their exposure to a
diversified portfolio of small UK quoted companies through a
closed-ended, split capital investment vehicle with a fixed life
without incurring significant realisation costs or portfolio
reorganisation costs;
-
they enable Shareholders who elect for the Rollover Options to
continue to benefit from the management expertise of Aberforth
Partners;
-
they offer Ordinary Shareholders who wish to realise some or all
of their investment the opportunity to do so at close to NAV;
and
-
they avoid the need to realise all of the Company’s small cap
investment portfolio in the market, to the extent that all or part
of it is transferred to ASLIT under the Proposals, thereby saving
potential realisation costs which would otherwise be borne by
Ordinary Shareholders on the winding up of the Company.
Scaling back
The ASLIT Board shall have discretion (after consultation with
the Investment Managers and J.P. Morgan Cazenove) to scale back
Elections and/or applications under the Issues to ensure that
ASLIT: (i) will not be larger than the Company; and (ii) will
have a ratio of ASLIT Ordinary Shares to ASLIT ZDP Shares of
4:1. In exercising its discretion, the ASLIT Board intends to
seek to ensure a fair allocation between Shareholders who elect for
the Rollover Options and, in allocating ASLIT Ordinary Shares, give
preference, so far as is practicable, to those existing Ordinary
Shareholders who have elected (or are deemed to elect) for the
Ordinary Rollover Option and, in allocating ASLIT ZDP Shares, the
ASLIT Board intends to give preference, so far as is practicable,
to those investors who have subscribed for or rolled into ASLIT
Ordinary Shares.
It should be noted that in the event that a Shareholder receives
cash under the Scheme (whether by Election or as a result of
scaling back or default), they may incur a liability to UK taxation
of chargeable gains in respect of such disposal of Shares depending
on the particular circumstances of the Shareholder concerned.
Costs and expenses
The Company will bear all of its own costs in relation to the
Proposals. It is estimated that the costs of the Proposals
(which would be borne entirely by the Ordinary Shareholders and
exclude any portfolio realisation costs) will be approximately
£396,000 (including irrecoverable VAT) in aggregate (amounting to
approximately 0.36 pence per Ordinary
Share).
If the Proposals do not become effective, the Company will
proceed to liquidation in accordance with the provisions of its
Articles and will suffer the costs in relation to the Proposals and
is also expected to suffer increased portfolio realisation
costs.
Directors’ intentions
The Directors intend to vote in favour of the Scheme Resolutions
to approve the Proposals at the Meetings in respect of their own
beneficial holdings of Ordinary Shares, which total 324,001
Ordinary Shares (representing 0.3 per cent. of the total voting
rights in the Company exercisable at each Meeting).
Aberforth Partners' intentions
The partners of Aberforth Partners have indicated that they, and
their connected persons, intend to elect for the relevant Rollover
Options for ASLIT Ordinary Shares in respect of their interests in
Shares (valued, in aggregate, at approximately £14.4 million as at
17 May 2017). In addition, the
partners and their connected persons intend to subscribe for at
least £2 million of ASLIT Ordinary Shares under the ASLIT Placing
and Offer.
EXPECTED
TIMETABLE
All references are
to UK time. |
2017 |
Latest time and date
for receipt of blue forms of proxy for the First Meeting |
10.00 a.m. on Tuesday,
13 June |
Time and date from
which it is advised that dealings in Shares should only be for cash
settlement and immediate delivery of documents of title |
8.00 a.m. on Thursday,
15 June |
First Meeting |
10.00 a.m. on
Thursday, 15 June |
Latest time and date
for receipt of Forms of Election or TTE instructions from
Shareholders |
1.00 p.m. on Monday,
19 June |
Latest time and date
for the receipt of Application Forms under the Offer* |
1.00 p.m. on Monday,
19 June |
Record Date for the
Scheme |
the close of business
on
Monday, 19 June |
Calculation Date |
the close of business
on Friday, 23 June |
Latest time and date
for receipt of applications under the Placing* |
3.00 p.m. on Monday,
26 June |
Latest time and date
for receipt of green forms of proxy for the Second Meeting |
11.00 a.m. on
Wednesday, 28 June |
Shares disabled in
CREST |
7.30 a.m. on
Wednesday, 28 June |
Regulatory Information
Service announcement of the results of the ASLIT Placing and Offer
and the number of ASLIT Ordinary Shares and ASLIT ZDP Shares to be
issued pursuant to the Scheme |
29 June |
Amendment to the
Of?cial List and dealings in Reclassi?ed Shares commence on the
London Stock Exchange |
8.00 a.m. on Thursday,
29 June |
Dealings in Reclassi?ed
Shares suspended |
7.30 a.m. on Friday,
30 June |
Second Meeting |
11.00 a.m. on Friday,
30 June |
Effective Date for
implementation of the Proposals and commencement of the liquidation
of the Company |
Friday, 30 June |
Admission to listing of
the ASLIT Shares to be issued pursuant to the Scheme and of the
ASLIT Shares to be issued pursuant to the ASLIT Placing and
Offer |
8.00 a.m. on Monday, 3
July |
ASLIT Shares issued in
uncerti?cated form credited to CREST accounts of Shareholders under
the Scheme |
8.00 a.m. on Monday, 3
July |
ASLIT Shares issued in
uncerti?cated form credited to CREST accounts of ASLIT Shareholders
under the Placing and Offer |
11.00 a.m. on Monday,
3 July |
CREST payments made in
respect of cash entitlements of Shareholders under the Scheme |
Friday, 7 July |
Cheques despatched in
respect of cash entitlements of Shareholders under the Scheme |
Friday, 7 July |
De?nitive certi?cates
in respect of ASLIT Shares issued in certi?cated form pursuant to
the Scheme despatched to Shareholders entitled thereto |
week commencing
Monday, 10 July |
Cancellation of listing
of the Reclassi?ed Shares |
Monday, 10 July |
Each of the times and dates in the
above expected timetable (other than in relation to the Meetings)
may be extended or brought forward without further notice. If any
of the above times and/or dates change, the revised time(s) and/or
date(s) will be noti?ed to Shareholders by an announcement through
a Regulatory Information Service provider.
*The Directors may, with the prior approval of J.P. Morgan
Cazenove, alter such dates and thereby lengthen the period for
returning Application Forms under the Offer making commitments
under the Placing to a date no later than 30
June 2017 and/or the date of Admission to a date or dates no
later than 31 July 2017. The Company
will notify investors of any such changes to these dates by making
an announcement via a Regulatory Information Service. All
references in the announcement to times are to London times.
A copy of the Circular and Prospectus will be submitted to the
National Storage Mechanism and will shortly be available for
inspection at www.morningstar.co.uk/uk/NSM.
Terms used in this announcement shall have the same meaning as
set out in the Circular.
For further information, please contact:
Investment Managers
Aberforth Partners LLP
+44 (0) 131 220 0733
Euan Macdonald
Alistair Whyte
Advisers to the Company
Dickson Minto
W.S.
+44 (0) 207 649 6823
Douglas
Armstrong
Advisers to ASLIT
J.P. Morgan Cazenove
(JPMC) +44
(0) 207 742 4000
William Simmonds
Edward Gibson-Watt
Oliver Kenyon
Kepler Partners
LLP
+44 (0) 203 384 8796
Hugh van
Cutsem
[1] This is not a profit forecast. There can be no
guarantee that any dividends will be paid by ASLIT. The level
of dividend will be based inter alia on the yield of ASLIT's
underlying portfolio.
The information contained in this announcement is given at the
date of its publication (unless otherwise marked) and is subject to
updating, revision and amendment from time to time.
Dickson Minto W.S., which is
authorised and regulated by the Financial Conduct Authority, is
acting only for the Company in connection with the matters
described in this announcement and is not acting for or advising
any other person, or treating any other person as its client, in
relation thereto and will not be responsible to anyone other than
the Company for providing the protections afforded to clients of
Dickson Minto W.S. or advice to any
other person in relation to the matters contained herein.
J.P. Morgan Cazenove, which is authorised and regulated by the
Financial Conduct Authority, is acting only for ASLIT in connection
with the matters described in this announcement and is not acting
for or advising any other person, or treating any other person as
its client, in relation thereto and will not be responsible to
anyone other than the ASLIT for providing the protections afforded
to clients of J.P. Morgan Cazenove or advice to any other person in
relation to the matters contained herein.
Kepler Partners LLP, which is authorised and regulated by the
Financial Conduct Authority, is acting only for ASLIT in connection
with the matters described in this announcement and is not acting
for or advising any other person, or treating any other person as
its client, in relation thereto and will not be responsible to
anyone other than the ASLIT for providing the protections afforded
to clients of Kepler Partners LLP or advice to any other person in
relation to the matters contained herein.
This announcement may include statements that are, or may be
deemed to be, "forward-looking statements". These forward-looking
statements can be identified by the use of forward-looking
terminology, including the terms "believes", "estimates",
"anticipates", "expects", "intends", "may", "will" or "should" or,
in each case, their negative or other variations or comparable
terminology. All statements other than statements on historical
facts included in this announcement, including, without limitation,
those regarding the Company's financial position, strategy, plans,
proposed acquisitions and objectives, are forward-looking
statements.
Forward-looking statements are subject to risks and
uncertainties and, accordingly, ASLIT's actual future financial
results and operational performance may differ materially from the
results and performance expressed in, or implied by, the
statements. These forward-looking statements speak only as at the
date of this announcement and cannot be relied upon as a guide to
future performance. Aberforth Partners LLP and Dickson Minto W.S. expressly disclaim any
obligation or undertaking to update or revise any forward-looking
statements contained herein to reflect actual or any change in the
assumptions, conditions or circumstances on which any such
statements are based unless required to do so by the Financial
Services and Markets Act 2000, the Prospectus Rules of the
Financial Conduct Authority or other applicable laws, regulations
or rules.
None of the Company, ASLIT, Aberforth Partners LLP, J.P. Morgan
Cazenove or Dickson Minto W.S., or
any of their respective affiliates, accepts any responsibility or
liability whatsoever for or makes any representation or warranty,
express or implied, as to this announcement, including the truth,
accuracy or completeness of this information in this announcement
(or whether any information has been omitted from the announcement)
or any other information relating to the Company or associated
companies, whether written, oral or in visual or electronic form,
and howsoever transmitted or made available or for any loss
howsoever arising from any use of the announcement or its contents
or otherwise arising in connection therewith. The Company, ASLIT,
Aberforth Partners LLP and Dickson Minto
W.S., and their respective affiliates, accordingly disclaim
all and any liability whether arising in tort, contract or
otherwise which they might otherwise have in respect of this
announcement or its contents or otherwise arising in connection
therewith.
This announcement does not constitute a prospectus relating to
ASLIT, or form part of, any offer or invitation to sell or issue,
or any solicitation of any offer to purchase or subscribe for, any
shares in the Company or ASLIT in any jurisdiction nor shall it, or
any part of it, or the fact of its distribution, form the basis of,
or be relied on in connection with or act as any inducement to
enter into, any contract therefor. Investors should not purchase or
subscribe for any transferable securities referred to in this
announcement except on the basis of information contained in the
prospectus being considered for publication by ASLIT in due course.
The contents of such prospectus will, if published, supersede the
information in this announcement.
Nothing in this announcement constitutes investment advice and
any recommendations that may be contained herein have not been
based upon a consideration of the investment objectives, financial
situation or particular needs of any specific recipient. Copies of
the prospectus will be available from
www.morningstar.co.uk/uk/nsm.