DRR Dresd.Rcm Emrg.

RNS Number:6161T
Dresdner RCM Emerging Mkts Tst PLC
26 March 2002

26th March 2002

Dresdner RCM Emerging Markets Trust PLC

PROPOSALS FOR THE RECONSTRUCTION OF THE COMPANY

The Board of Dresdner RCM Emerging Markets Trust PLC (the "Company") announces
that a circular setting out the Proposals for the reconstruction of the Company
is being posted to shareholders.

Introduction

On 10th December 2001 the Chairman wrote to Shareholders with notice of an
Extraordinary General Meeting at which Shareholders would be given the
opportunity to vote on the continuation of the Company (the "Continuation
Resolution'') and also outlined the reconstruction proposals which the Board
would then put to Shareholders should a majority of votes cast at that
Extraordinary General Meeting be against the continuation of the Company.

At the Extraordinary General Meeting held on 14th January 2002 the Continuation
Resolution was not passed and accordingly the Chairman is now writing to
Shareholders with recommended proposals for the reconstruction of the Company.
These proposals, which are described below, include an option for Shareholders
to elect to continue their investment in emerging markets or to elect to receive
cash at net asset value less costs and expenses.

Background

The Company was launched in 1993 with the aim of achieving capital growth in
emerging markets world-wide, while at the same time controlling risk. Since
launch, the Company has outperformed its benchmark, the MSCI Emerging Markets
Index, by some 14.4 per cent. over the period to 28th February 2002 (source:
Dresdner RCM/Russell/Mellon Analytical Services - total NAV return). However, in
recent years, disappointment with the asset class as a whole has prompted many
institutional shareholders to reduce their exposure to the sector. Whilst
believing that the prevailing uncertainty in the global and emerging economies
offers opportunities to invest in some emerging market companies at attractive
prices, the Board recognises Shareholders' wishes for a scheme of reconstruction
and the terms of this are described below.

Outline of the Proposals

The Proposals provide for the Company to be put into members' voluntary
liquidation and for its assets (after providing for the costs of implementing
the Proposals) to be transferred to a number of successor vehicles in accordance
with Shareholders' elections. The Proposals are designed to offer Ordinary
Shareholders:

  • the means to "roll-over'' their investment into either of two funds with
    emerging markets exposure:

    the Dresdner Emerging Markets Fund, a sub-fund of the Dresdner Global
    Distributor Fund, a Luxembourg listed open-ended fund recognised under the
    Financial Services and Markets Act 2000, with a world-wide emerging markets
    objective;

    or

    the Dresdner RCM Tiger Trust, a UK authorised unit trust with a
    predominantly Asian investment objective;

    or

  • through the Cash Option, a cash exit for those investors who wish to
    reduce their exposure to emerging markets.

Under the Proposals, Warrantholders will receive a single cash payment
determined in accordance with the terms of the Warrant Instrument.

Benefits of the Proposals

The Board considers that the Proposals provide the following benefits:

  • they offer greater choice and more flexibility to Shareholders than if the
    Company were simply wound up, as they enable Shareholders to elect to
    roll-over their investment in emerging markets or to realise their
    investment for cash;

  • they enable Shareholders (other than those electing or who are deemed to
    have elected for the Cash Option) to defer any liability to UK taxation of
    capital gains, to the extent that they roll over their investment into the
    Emerging Markets Fund or the Tiger Trust.

If the proposals are not approved by Shareholders and Warrantholders, the Board
will bring forward alternative proposals, which may include the winding up of
the Company without any options for Shareholders to elect for investment in
successor vehicles.


Information on Dresdner Emerging Markets Fund, Dresdner RCM Tiger Trust and
DREMT

Cash Fund Limited


Shareholders will be able to exchange their Ordinary Shares for shares or units
in one of the following: Dresdner Emerging Markets Fund, or Dresdner RCM Tiger
Trust or DREMT Cash Fund Limited.


Dresdner Emerging Markets Fund

The Dresdner Emerging Markets Fund is a sub-fund of the Dresdner Global
Distributor Fund, which is a Luxembourg listed open-ended fund recognised under
the Financial Services and Markets Act 2000.


The investment objective of the Dresdner Emerging Markets Fund is to provide
long-term capital growth in a well diversified portfolio of transferable equity
and equity-related securities of companies established or doing a substantial
part of their business in the developing or the emerging countries of Asia,
Latin America, Europe, Africa and the Middle East. In addition, up to 25 per
cent. of the Fund's assets may be invested in transferable debt securities of
issuers established in the emerging markets. Warrants may also be held on an
ancillary basis.


The management company of the Dresdner Emerging Markets Fund is dresdnerbank
asset management S.A. and the custodian is Dresdner Bank Luxembourg S.A.


There are three classes of shares in the Dresdner Emerging Markets Fund, class
A, B and C (each in Sterling and in Euros). Shareholders who elect or who are
deemed to have elected to exchange their Ordinary Shares for shares in the
Dresdner Emerging Markets Fund will receive class A (Sterling) shares.


Dresdner RCM Tiger Trust

The Dresdner RCM Tiger Trust is a UK authorised unit trust. In June 2002,
Dresdner RCM proposes to convert the Tiger Trust into a sub-fund of the Dresdner
RCM International Investment Funds Limited, a UK authorised open-ended
investment company. No material changes in investment objective or policy will
arise as a result of this proposed conversion. Unitholder approval will be
sought at that time. Ordinary Shareholders should note that, if they elect to
exchange their Ordinary Shares for units in the Tiger Trust, they will not be
able to vote on the conversion of the Tiger Trust into a sub-fund of Dresdner
RCM International Investment Funds Limited.


The investment objective of the Tiger Trust is to provide investors with capital
growth. It may invest world-wide and in all economic sectors, but will invest
predominantly in the securities of the following markets: Hong Kong, Singapore,
South Korea, Taiwan, Thailand, the Philippines, Malaysia, Indonesia and other
Asian countries.


The manager of the Tiger Trust is Dresdner RCM Funds (UK) Limited and the
trustee is J P Morgan Trustee and Depositary Company Limited.


DREMT Cash Fund Limited

DREMT Cash Fund Limited ("Cashco'') is a new private company whose objectives
include the investment of its assets in liquid securities. Shareholders who
elect for the Cash Option will have Cashco Shares issued to them and will
receive cash in the liquidation of Cashco. Cashco Shares will not be listed on
any stock exchange and will not be transferable.


Financial Effects of the Proposals

As at 22nd March 2002 (the latest practicable date prior to the posting of this
document) the published net asset value of the Company was approximately £26.2
million, equivalent to approximately 110.2 pence per Ordinary Share on the basis
of full dilution for the Warrants and 112.6 pence per Ordinary Share on an
undiluted basis. It is estimated that the costs of the Proposals (which exclude
payments due under the terms of the Warrant Instrument to Warrantholders) would
be approximately 3 pence per Ordinary Share, fully diluted, being 2.7 per cent.
of the Company's fully diluted net asset value. By way of example, on this
basis, Shareholders who elected for the Cash Option would have received
approximately 106.4 pence per Ordinary Share under the Scheme.


Considerations for Ordinary Shareholders

The choice between the options under the Proposals is a matter for each
Shareholder and will be influenced by each shareholder's individual investment
objectives and financial and tax circumstances. The Directors cannot, and do
not, offer any advice or recommendations to Shareholders on which election (if
any) they should make.


In general, however the "roll-over'' options into the Emerging Markets Fund or
the Tiger Trust are likely to appeal to those Shareholders who wish to continue
to be invested, but in the form of an investment in an open-ended vehicle, with
exposure to emerging markets (either generally or with an Asian focus). The Cash
Option is likely to appeal to those Shareholders who do not wish to be so
invested and/or to those for whom liability to UK taxation of chargeable gains
is not a consideration, since electing for the Cash Option will represent a
disposal for those purposes.


Shareholders considering electing for Emerging Markets Fund Shares should note
the following differences between the Company and the Emerging Markets Fund:


  • the Emerging Markets Fund is a sub-fund of an overseas registered fund
    whose shares are listed on the Luxembourg Stock Exchange, rather than the
    London Stock Exchange;

  • investors in the Company wishing to sell their Ordinary Shares must do so
    on the London Stock Exchange at a price which may not fully reflect the
    Company's net asset value, whilst holders of shares in the Emerging Markets
    Fund can sell their shares to the Fund at a price determined by reference to
    the Fund's net asset value;

  • income and capital gains realised by investors in the Emerging Markets
    Fund are subject to a different UK taxation regime than income and gains
    realised by investors in the Company.


Shareholders considering electing for Tiger Trust Units should note the
following differences between the Company and the Tiger Trust:


  • the Tiger Trust is a UK authorised unit trust whose shares are not listed;

  • investors in the Company wishing to sell their Ordinary Shares must do so
    on the London Stock Exchange at a price which may not fully reflect the
    Company's net asset value, whilst holders of units in the Tiger Trust can
    sell their units to the Tiger Trust Manager at a price determined by
    reference to the Tiger Trust's net asset value;


  • income accruing to investors in the Tiger Trust is subject to a different
    UK taxation regime from income realised by investors in the Company.
    However, capital gains realised by investors on a disposal of Tiger Trust
    Units will be treated for UK tax purposes in the same way as capital gains
    realised by investors in the Company on a disposal of their Shares.


The Directors wish to ensure, so far as possible, that Shareholders (other than
Restricted Holders) who fail to return a valid Form of Election do not suffer a
capital gains tax charge as a result of such failure and can remain invested in
a fund with general emerging markets exposure. Therefore, Shareholders (other
than Restricted Holders) who make no elections will be deemed to have elected
for the Emerging Markets Fund in respect of their entire holding of Shares.
However, Shareholders who elect or are deemed to have elected to receive
Emerging Markets Fund Shares or Tiger Trust Units but whose entitlements under
the Scheme have an aggregate value of less than £500, will be deemed to have
elected for the Cash Option.


Those Shareholders who wish to receive cash for their investment in the Company
following its winding-up should elect for the Cash Option and return a valid
Form of Election by 5.00 p.m. on Monday 15th April 2002.


Warrants

Warrantholders will receive a single cash payment under the Scheme determined as
at the Calculation Date. The payment will be determined in accordance with the
terms of the Warrant Instrument which provides for the adjustment of the Warrant
subscription price in certain circumstances, including in the event of the
winding up of the Company. On the basis of the published net asset value of the
Company on 22nd March 2002 (the latest practicable date prior to the posting of
this document), and assuming that the resolution to wind up the Company was
passed on that date, Warrantholders would have been treated as if they had
exercised their Warrants in full at a subscription price of 96.1 pence per
Ordinary Share. On this basis, Warrantholders would have received under the
Scheme, in respect of each Warrant held, a sum of approximately 10.8 pence per
Warrant, being the excess of the fully diluted net asset value per Ordinary
Share (assuming exercise of all the Warrants at the adjusted subscription price)
over the adjusted subscription price.


Meetings

The implementation of the Proposals is conditional, inter alia, on the passing
of resolutions at the First Extraordinary General Meeting and the General
Meeting of Warrantholders which are being convened for 22nd April 2002 and at
the Second Extraordinary Meeting which is being convened for 30th April 2002.


Expected Timetable                                                                                 2002

                                                                                                     
Date from which it is advised that dealings in the                        5.00 pm on Wednesday 10th April
Ordinary Shares and Warrants should only be for cash
settlement and immediate delivery of documents of title

Latest time for receipt of Forms of Election                                 5.00 pm on Monday 15th April

Closing of the Register in respect of Ordinary Shares and                    5.00 pm on Monday 15th April
Warrants and Record date for entitlements of Shareholders
and Warrantholders under the Proposals

Latest time for receipt of Forms of Proxy for the First                   11.00 am on Saturday 20th April
Extraordinary General Meeting

Latest time for receipt of Forms of Proxy for the General                 11.05 am on Saturday 20th April
Meeting of Warrantholders

First Extraordinary General Meeting                                         11.00 am on Monday 22nd April
General Meeting of Warrantholders                                           11.05 am on Monday 22nd April
Dealings commence in Reclassified Shares and Register                      8.00 am on Thursday 25th April
opens in respect of Reclassified Shares

Dealings suspended in Reclassified Shares                                    7.30 am on Friday 26th April

Register closes in respect of reclassified Shares                  close of business on Friday 26th April

Latest time for receipt of Forms of Proxy for the Second                    10.30 am on Sunday 28th April
Extraordinary General Meeting

Calculation Date                                                   close of business on Monday 29th April

Second Extraordinary General Meeting                                       10.30 am on Tuesday 30th April

Effective Date                                                                         Tuesday 30th April

Extraordinary General Meeting of Cashco to vote on the                       10.30 am on Thursday 2nd May
liquidation of Cashco

Creation of Emerging Markets Fund Shares and Tiger Trust                     12.00 pm on Thursday 2nd May
Units

Dealings commence in Emerging Markets Fund Shares and                                      Friday 3rd May
Tiger Trust Units through Dresdner RCM Global Investors

Contract notes for Emerging Markets Fund Shares or Tiger                                   Friday 3rd May
Trust Units despatched to the persons entitled thereto

Cheques despatched, or CHAPs payments made, to                                         by Tuesday 7th May
Warrantholders, Restricted Holders and to Ordinary
Shareholders who have elected for the Cash Option



Accounting Reference Date

In connection with the Proposals, the Company will be changing its accounting
reference date from 31st March to 29th April in respect of the current
accounting period which will therefore extend from 1st April 2001 to 29th April
2002.


Enquiries

Cazenove & Co. Ltd:
Angus Gordon Lennox      020 7588 2828


Terms used in this announcement shall, unless the context otherwise requires,
bear the meanings given to them in the Circular to Shareholders of Dresdner RCM
Emerging Markets Trust PLC dated 26 March 2002.


The contents of this announcement have been approved by Cazenove & Co. Ltd, 12
Tokenhouse Yard, London EC2R 7AN, for the purposes of section 21 of the
Financial Services and Markets Act 2000.


Cazenove & Co. Ltd, which is regulated in the United Kingdom by the Financial
Services Authority, is acting for Dresdner RCM Emerging Markets Trust PLC and
for no-one else and will not be responsible to anyone other than Dresdner RCM
Emerging Markets Trust PLC for providing the protections afforded to customers
of Cazenove & Co. Ltd or for providing advice in relation to the Proposals or
any matter referred to herein.


                      This information is provided by RNS
            The company news service from the London Stock Exchange

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