20 November 2015
PEWT Securities
PLC (“PEWT Securities” or the “Company”)
Publication of
Circular and Announcement of Proposals
PEWT Securities plc has today published a circular (the
“Circular”) in connection with the proposals for the reconstruction
and voluntary winding-up of PEWT Securities and for a Rollover
Option for ZDP Shareholders. The Circular should be read in
conjunction with the prospectus published today relating to PEWT
Securities 2020 plc (the “Prospectus”).
The Existing ZDP Shares of PEWT Securities confer a right to
receive a Final Capital Entitlement of 221.78p per Existing ZDP
Share (approximately £49.8 million in total) on the winding up of
PEWT Securities on 31 December 2015.
At time of the 2014 reorganisation, the board of the Company’s
parent, Premier Energy and Water Trust plc, announced its intention
to consider the various options that may be available for
refinancing the Existing ZDP Shares nearer to the planned
winding-up of PEWT Securities, including the issuance by the Group
of a follow-on zero dividend preference share, to allow ZDP
Shareholders who wish to do so the opportunity to roll over their
investment into a similar investment.
Further to this, the Board have today announced Proposals which
allow ZDP Shareholders to elect to receive their Final Capital
Entitlement of 221.78p per Existing ZDP Share upon the winding-up
of PEWT Securities either:
- in cash; or
- to roll over some or all of their investment into New ZDP
Shares to be issued by PEWT Securities 2020 plc (“PEWT Securities
2020”), a new subsidiary of the Parent formed for the purpose of
the Proposals.
The latest time and date for receipt of Elections is
1.00 p.m. on 11 December 2015. If the number of New ZDP Shares
which would be issuable pursuant to the Scheme as a result of
giving full effect to Elections for the Rollover Option would
exceed the Maximum Issue Size, then the number of New ZDP Shares
issuable pursuant to the Scheme will be scaled back in the manner
set out in the Circular.
A copy of the Circular and Prospectus will be submitted to the
National Storage Mechanism and will shortly be available for
inspection at: http://www.morningstar.co.uk/uk/NSM and on the
Company's website:
https://www.premierfunds.co.uk/investors/investments/investment-trusts/premier-energy-and-water-trust.
Copies of the Circular and Prospectus, together with a Form of
Election (for those ZDP Shareholders holding their Existing ZDP
Shares in certificated form), will be sent to ZDP Shareholders of
the Company today.
Capitalised terms used but not defined in this announcement have
the meanings set out in the Circular dated 20 November 2015.
Enquiries:
Premier Fund
Managers Limited
Nigel Sidebottom
James Smith
Claire Long |
+ 44 (0) 1483 30 60
90
|
N+1 Singer
James Maxwell
Liz Yong
Tom Smale |
+ 44 (0) 20 7496 3000 |
The following is a reproduction, without material adjustment, of
the Chairman’s Letter to ZDP Shareholders which is contained within
the Circular:
Dear ZDP Shareholder
Reconstruction and
voluntary winding-up of PEWT Securities
- Introduction
As you will be aware, PEWT Securities is due to be wound up on
31 December 2015 and ZDP Shareholders
repaid their Final Capital Entitlement of 221.78p per ZDP
Share.
Your Board announced today proposals for an issue of New ZDP
Shares and the opportunity for existing ZDP Shareholders to roll
over their capital entitlement into New ZDP Shares.
The Proposals provide for a members’ voluntary liquidation of
PEWT Securities and scheme of reconstruction pursuant to section
110 of the Insolvency Act 1986. Under the Proposals, ZDP
Shareholders may receive their Final Capital Entitlement upon the
winding-up of PEWT Securities in cash or elect to roll over some or
all of their investment into New ZDP Shares to be issued by PEWT
Securities 2020, a new subsidiary of the Parent formed for the
purpose of the Proposals. A rollover of an investment in the
Existing ZDP Shares to the New ZDP Shares issued by PEWT Securities
2020 provides an alternative to the cash payment to which ZDP
Shareholders are entitled upon a straight winding-up and will allow
ZDP Shareholders who elect for the rollover to continue their
investment in the Group. ZDP Shareholders who elect to roll over
their investment into New ZDP Shares should not generally be
treated as making a disposal for the purposes of UK taxation of
chargeable gains as a result of doing so (as to which, please see
the discussion at paragraph 2 of Part 5 of the Circular).
In addition to the Scheme, the Proposals also include a
conditional Placing of further New ZDP Shares. The number of New
ZDP Shares to be issued pursuant to the overall Issue is limited to
the Maximum Issue Size, which is designed to protect New ZDP
Shareholders by ensuring that the Cover on the New ZDP Shares as at
Admission (calculated by reference to the Gross Assets as at
11 December 2015, the deadline for
submission of Elections) is at least the Minimum Initial Cover. ZDP
Shareholders seeking to roll over their investment into New ZDP
Shares will be allocated New ZDP Shares in preference to any
subscriptions from investors under the Placing. Accordingly, if
there is sufficient demand for the Rollover Option from ZDP
Shareholders, it is possible that no New ZDP Shares will be issued
pursuant to the Placing.
The Proposals are not conditional on the approval of ZDP
Shareholders or Ordinary Shareholders of the Parent. The Proposals
are conditional on the approval of the ordinary shareholder of PEWT
Securities, which is the Parent, at the General Meetings. The
Proposals are expected to proceed and the Circular is being sent to
provide ZDP Shareholders with information regarding the Proposals
and the Elections that may be made in respect of the Scheme.
Details of the action to be taken by
ZDP Shareholders in relation to the Proposals are set out in Part 2
of the Circular. It is important that ZDP Shareholders read Part 2
carefully and, if they wish to make a full or partial election for
New ZDP Shares, where their Existing ZDP Shares are held in
certificated form, return their Forms of Election or, where their
Existing ZDP Shares are held in uncertificated form, submit their
transfer to escrow instruction via CREST (TTE Instruction) so as to
be received no later than 1.00 p.m.
on 11 December 2015.
Failure to return or submit a valid
Form of Election or a TTE Instruction or the return or submission
of a Form of Election or a TTE Instruction which is not validly
completed will result in the relevant ZDP Shareholder being deemed
to have elected for the Cash Option.
The attention of Shareholders is drawn to paragraph 2 of Part 5
of the Circular which sets out a general guide to certain aspects
of current UK taxation law and HMRC published practice.
The Circular should be read in conjunction with the Prospectus
relating to PEWT Securities 2020.
- Key features of the New ZDP Shares
The New ZDP Shares:
- will have a repayment date of 30
November 2020 and will effectively rank as to capital in
priority to the Ordinary Shares;
- are designed to provide a pre-determined level of capital
growth equivalent to a gross redemption yield of 4.75 per cent. per
annum based on the issue price of a New ZDP Share of 100p; and
- subject to the Group having sufficient assets at the time and
assuming the Scheme is effective on 31
December 2015, will carry the right to be paid the 2020
Final Capital Entitlement of 125.6519p in cash on 30 November 2020.
The Issue Price will be 100 pence
per New ZDP Share. Accordingly, if a ZDP Shareholder were to elect
for the Rollover Option, where there is no scaling back, they would
receive 2,217 New ZDP Shares for every 1,000 Existing ZDP
Shares held on the Effective Date (entitlements to New ZDP Shares
under the Scheme will be rounded down to the nearest whole
number).
However, the number of New ZDP Shares that may be issued under
the Issue is limited to the Maximum Issue Size. The Board has
determined that the gearing to be provided to the Group by the New
ZDP Shares will be less than the gearing currently provided to the
Group by the Existing ZDP Shares. Accordingly, if a sufficient
number of ZDP Shareholders were to elect for the Rollover Option,
such ZDP Shareholders would be scaled back in accordance with
paragraph 14 of Part 4 of the Circular and would receive part of
their Final Capital Entitlement in cash. By way of example, and
assuming that the Maximum Issue Size is achieved, if all ZDP
Shareholders elect for the Rollover Option, each ZDP Shareholder
will be scaled back to the extent that they would receive
approximately 53.6 per cent. of their Final Capital Entitlement in
New ZDP Shares and the remainder of their Final Capital Entitlement
in cash.
On the assumption that (i) Gross Assets on 31 December 2015 are £75.9 million, which were
the Gross Assets as at the Latest Practicable Date; and (ii) the
Maximum Issue Size is achieved, then it is expected that following
completion of the Scheme and the Placing, Gross Assets would need
to fall by 31.0 per cent. in total, and 7.3 per cent. annually, in
order for the New ZDP Shares not to receive their full 2020 Final
Capital Entitlement of 125.6519p per New ZDP Share on 30 November 2020.
- Background to the Proposals
In August 2014, Shareholders
approved proposals to extend the life of the Parent beyond its
then-planned winding up date of 31 December
2015 and to implement a reorganisation of the Parent through
a scheme of arrangement. The reorganisation became effective in
September 2014, pursuant to which old
zero dividend preference shares issued by the Parent were replaced
with the Existing ZDP Shares issued by PEWT Securities, a
subsidiary of the Parent which was formed for the purpose of the
reorganisation.
The Group’s current capital structure is designed to provide ZDP
Shareholders with a Final Capital Entitlement of 221.78p in cash
per Existing ZDP Share on the planned winding-up date of PEWT
Securities of 31 December 2015. To
achieve this, the Articles provide for PEWT Securities to be wound
up on 31 December 2015. On a
winding-up, Shareholders’ entitlements, after payment of PEWT
Securities’ creditors, are determined in accordance with the
Articles as follows:
- first, there shall be paid to ZDP Shareholders an amount equal
151.39p per ZDP Share as increased with effect from and including
17 December 2009 on a daily basis at
such compounded rate as results in a final entitlement on
31 December 2015 of 221.78p per ZDP
Share; and
- secondly, the Parent, as the holder of all of the ordinary
shares of PEWT Securities shall receive the surplus assets of PEWT
Securities available for distribution.
Accordingly, the Group is committed to repaying the Final
Capital Entitlement of the Existing ZDP Shares of approximately
£49.8 million on 31 December
2015.
At the time of the 2014 reorganisation, the Board informed
Shareholders that it was the Board’s intention to consider the
various options that may be available for refinancing the Existing
ZDP Shares nearer to the planned winding-up of PEWT Securities. The
Board stated that it may consider the issuance by the Group of a
follow-on zero dividend preference share at that time, to allow ZDP
Shareholders who wish to do so the opportunity to roll over their
investment into a similar investment for which the Board believed
there would be sufficient demand.
Against this background, the Board requested the Group’s
Manager, Premier Portfolio Managers Limited, and its financial
adviser, N+1 Singer, to consult with certain of the Group’s ZDP
Shareholders to ascertain their views. There was strong support for
an option that would enable ZDP Shareholders to roll over all or
some of their existing investment, in a tax efficient manner, into
new zero dividend preference shares issued by the Group.
The purpose of the Circular is to explain the Proposals and the
actions required to be taken in order for ZDP Shareholders to make
their Election in respect of the Proposals. The Board, which has
been advised by N+1 Singer, believes that the Proposals are in the
best interests of Shareholders as a whole and of ZDP Shareholders
as a class. In providing its advice, N+1 Singer has taken into
account the commercial assessments of the Board.
ZDP Shareholders are recommended to
make an Election for the Option(s) they would prefer in respect of
their Existing ZDP Shares. The Form of Election need only be
completed, or a TTE
Instruction submitted, as appropriate,
by ZDP Shareholders who wish to make a full or partial election for
New ZDP Shares pursuant to the Rollover Option. If ZDP Shareholders
wish to receive the Cash Option, no action needs to be taken.
- The Proposals
4.1 Options
available to ZDP Shareholders
Under the Proposals, PEWT Securities will be wound up on
31 December 2015. ZDP
Shareholders
who are on the Register as at 5.00
p.m. on 11 December 2015 will
be entitled to elect:
- to rollover some or all of their investment into New ZDP Shares
issued by PEWT Securities 2020,
- a newly incorporated subsidiary of the Parent (the “Rollover
Option”); and/or
- (ii) to receive cash in the liquidation in respect of all or
part of their investment in PEWT Securities (the “Cash
Option”).
ZDP Shareholders may make different Elections in respect of
different parts of their holdings of Existing ZDP Shares, as suits
their personal investment requirements.
The default option under the Scheme
will be the Cash Option, meaning that a ZDP Shareholder who, in
respect of all or part of his or her holding of Existing ZDP
Shares, fails to submit a valid Form of Election or a valid TTE
Instruction, as appropriate, by the due date or submits a Form of
Election which has not been duly completed or an invalid TTE
Instruction, will be deemed to have elected for the Cash Option in
respect of such holding.
Subject to paragraph 9 of Part 4 of the Circular, Overseas
Shareholders will be deemed to have elected for the Cash Option in
respect of their entire holding of Existing ZDP Shares.
If the number of New ZDP Shares which would be issuable pursuant
to the Scheme as a result of giving full effect to Elections for
the Rollover Option would exceed the Maximum Issue Size, then the
number of New ZDP Shares issuable pursuant to the Scheme shall be
scaled back in the manner set out in paragraph 14 of Part 4 of the
Circular.
4.2 Benefits of
the Proposals
The Proposals offer ZDP Shareholders the option of receiving
their Final Capital Entitlement in cash or, if they prefer, the
opportunity to roll over all or part of their capital entitlement
into New ZDP Shares issued by the Group. ZDP Shareholders who may
be subject to UK capital gains tax or corporation tax on gains on
their investment in PEWT Securities should generally be able to
roll over their investment into PEWT Securities 2020 without
crystallising an immediate charge to UK capital gains tax or
corporation tax on gains (as to which, please see the discussion at
paragraph 2 of Part 5 of the Circular).
The choice between the Options available under the Proposals
will be a matter for each ZDP Shareholder to decide and will be
influenced by their individual circumstances and investment
objectives. ZDP Shareholders should, before making any Election,
read carefully the information on the Options in the Circular and
the accompanying Prospectus in relation to PEWT Securities 2020 and
the New ZDP Shares.
Shareholders who are in any doubt as
to the contents of the Circular or as to the action to be taken
should immediately seek their own personal financial advice from
their independent professional adviser authorised under the
Financial Services and Markets Act 2000.
4.3 Features of
the proposed capital structure and the New ZDP Shares
In planning the proposed capital structure of the Group, the
Directors have had regard to the requirement to maintain a balance
between, on the one hand, the objective of providing a competitive
yield and security of repayment for the New ZDP Shareholders and,
on the other hand, the objective of providing Ordinary Shareholders
with a high level of income coupled with capital growth over the
long-term.
The New ZDP Shares will be issued by PEWT Securities 2020, a
newly formed subsidiary of the Parent. The number of New ZDP Shares
that may be issued under the Issue is limited to the Maximum Issue
Size. On the assumption that Gross Assets on 11 December 2015 are £75.9 million, which were
the Gross Assets as at the Latest Practicable Date, and the Maximum
Issue Size is achieved, then it is expected that following
completion of the Scheme and the Placing there will be 26,684,796
New ZDP Shares in issue.
The ordinary shares of PEWT Securities 2020 are unlisted and are
all held by the Parent. The New ZDP Shares will have a repayment
date of 30 November 2020 and will
effectively rank as to capital in priority to the Ordinary Shares
(as is the case with the Existing ZDP Shares, holders of Ordinary
Shares will be, in effect, entitled to the net revenue profits of
the Group (including accumulated revenue reserves) in priority to
the repayment of the 2020 Final Capital Entitlement). The objective
of PEWT Securities 2020 is to repay the 2020 Final Capital
Entitlement on the 2020 ZDP Repayment Date.
The New ZDP Shares are designed to provide a pre-determined
level of capital growth equivalent to a gross redemption yield of
4.75 per cent. per annum based on the issue price of a New ZDP
Share of 100p. The initial capital entitlement of 100p per New ZDP
Share will be increased from Admission at a daily compound rate to
the 2020 ZDP Repayment Date, being 30
November 2020 on which PEWT Securities 2020 is expected to
be wound up. Subject to the Group having sufficient assets at the
time and assuming the Scheme is effective on 31 December 2015, the 2020 Final Capital
Entitlement of a New ZDP Share will be 125.6519p. The capital
entitlement of the New ZDP Shares will rank behind the Group’s
other liabilities but ahead of the capital entitlement of the
Ordinary Shareholders (holders of Ordinary Shares being entitled to
the net revenue profits of the Group in priority to the repayment
of the 2020 Final Capital Entitlement).
The New ZDP Shares will be admitted to a standard listing on the
Official List and traded on the London Stock Exchange’s main market
for listed securities. Further information on the New ZDP Shares,
including the rights attaching to them and certain undertakings
given by the Group for the benefit of the New ZDP Shareholders, are
set out in the Prospectus accompanying the Circular.
4.4 Intra-Group
arrangements
PEWT Securities 2020 will not hold any of the Group’s portfolio
of investments, which will continue to
be held by the Parent.
In order for PEWT Securities 2020 to have sufficient assets to
repay the 2020 Final Capital Entitlement on the 2020 ZDP Repayment
Date (or the accrued capital entitlement of New ZDP Shares at an
earlier date, if required), the Parent and PEWT Securities 2020
have entered into arrangements whereby the assets of the Parent
will effectively be made available to meet the repayment
entitlements of the New ZDP Shares.
The Parent has entered into the New Undertaking Agreement with
PEWT Securities 2020 by which the Parent has undertaken to
contribute (by way of gift, capital contribution or otherwise) such
amount as will result in PEWT Securities 2020 having sufficient
assets to satisfy the then current capital entitlement or, as the
case may be, the 2020 Final Capital Entitlement of the New ZDP
Shares on the 2020 ZDP Repayment Date or any earlier winding up of
PEWT Securities 2020. The Parent has also agreed to meet all of the
running costs of PEWT Securities 2020.
The Parent has given certain undertakings for the benefit of
PEWT Securities 2020 and the New ZDP
Shareholders whilst the Parent remains liable to make any
payment under the New Undertaking Agreement.
In addition, pursuant to the New Undertaking Agreement, PEWT
Securities 2020 has agreed to lend to the Parent all of the
proceeds of the Placing (and any net proceeds pursuant to the ZDP
Placing
Programme (further details of which are set out at paragraph 4.7
below)) and an amount equal to the value of the assets (other than
the Rollover Option Undertaking described in paragraph 4.5 below)
received by it from PEWT Securities pursuant to the terms of the
Scheme.
The arrangements outlined above will effectively result in all
of the Group’s net assets being available to meet the repayment
entitlements of the New ZDP Shares. The repayment entitlements of
the New
ZDP Shares will effectively rank in priority to the capital
entitlement of the Ordinary Shares, although they will be
subordinated to any bank borrowings the Group may incur (although
it is the Parent’s policy not to employ any long-term gearing other
than by way of the issue of zero dividend preference shares) and
other creditors from time to time. As is the case with the Existing
ZDP Shares, holders of Ordinary Shares will be entitled to the net
revenue profits of the Group in priority to the repayment of the
2020 Final Capital Entitlement.
The terms of the agreements referred to above are summarised in
paragraph 9 of Part 8 of the Prospectus. The provisions of the
articles of association of PEWT Securities 2020 are summarised in
paragraph 4 of Part 8 of the Prospectus. The rights attached to the
New ZDP Shares are also summarised in Part 3 of the Circular.
4.5 Operation of
the Scheme
If the Scheme proceeds, before any assets are transferred to
PEWT Securities 2020 under the Scheme or set aside to pay ZDP
Shareholders who have or are deemed to have elected for the Cash
Option, the Liquidators will set aside sufficient assets in the
Liquidation Fund to meet all estimated current and future, actual
and contingent liabilities and costs which PEWT Securities has
agreed to pay.
After provision for liabilities (if any) as described above has
been made in the Liquidation Fund, the assets of PEWT Securities
will be appropriated into two pools, the ZDP Cash Pool and the ZDP
Rollover Pool, at the Effective Date. The appropriation of the
assets of PEWT Securities will be on the basis of the value
attributable to Elections for the Cash Option and the value
attributable to Elections for the Rollover Option. The remaining
assets of PEWT Securities will form part of the Liquidation
Fund.
The only material asset of PEWT Securities is the Existing
Undertaking Agreement, by which the Parent has undertaken to
contribute (by way of gift, capital contribution or otherwise) such
amount as will result in PEWT Securities having sufficient assets
to satisfy the then current or, as the case may be, Final Capital
Entitlement of the Existing ZDP Shares on 31
December 2015 or any earlier winding up of PEWT Securities.
PEWT Securities has no material liabilities other than the Final
Capital Entitlement of ZDP Shareholders.
Accordingly, the split of assets into the Liquidation Fund, Cash
Pool and Rollover Pool will be achieved by way of terminating and
restating the Existing Undertaking Agreement, as at the Effective
Date, such that the undertaking contained therein is split into two
new undertakings:
- an undertaking from the Parent to contribute such amount as
will result in PEWT Securities having sufficient assets to satisfy
the aggregate Final Capital Entitlements of all those ZDP
Shareholders electing for the Cash Option and all other liabilities
of PEWT Securities (the “PEWT Securities Undertaking”);
and
- an undertaking from the Parent to contribute such amount as
will result in PEWT Securities having sufficient assets to satisfy
the aggregate Final Capital Entitlements of all those ZDP
Shareholders electing for the Rollover Option (the “Rollover
Option Undertaking”).
On the Effective Date, the Liquidators will transfer the assets
in the ZDP Rollover Pool (the only material asset of which is
expected to be the Rollover Option Undertaking) to PEWT Securities
2020. In consideration for such transfer, New ZDP Shares will be
issued fully paid at a subscription price of 100p to ZDP
Shareholders with “A” rights who have elected for New ZDP
Shares.
The transfer of the ZDP Rollover Pool will be carried out in
accordance with the terms of the Transfer Agreement. Further
details of the Transfer Agreement are set out in paragraph 1 of
Part 5 of the Circular. The terms of the Rollover Option
Undertaking provide that PEWT Securities shall be entitled to
assign the Rollover Option Undertaking to PEWT Securities 2020 in
connection with the Scheme. Further details of the Rollover Option
Undertaking are set out in paragraph 9 of Part 8 of the
Prospectus.
The ZDP Cash Pool (the only material asset of which is expected
to be the PEWT Securities Undertaking) will be used to pay the
Final Capital Entitlements of ZDP Shareholders with “B” rights who
have elected, or are deemed to have elected, for the Cash
Option.
Any remaining assets of PEWT Securities in the Liquidation Fund
will be paid in cash to the Parent as holder of the ordinary shares
of PEWT Securities.
4.6 The Maximum
Issue Size and the Placing
The maximum number of New ZDP Shares that may be issued under
the Issue is the Maximum Issue Size.
If the number of New ZDP Shares which would be issuable pursuant
to the Scheme as a result of giving full effect to Elections for
the Rollover Option would exceed the Maximum Issue Size, then the
number of New ZDP Shares issuable pursuant to the Scheme shall be
scaled back in the manner set out in paragraph 14 of Part 4 of the
Circular.
To the extent that Elections for the Rollover Option under the
Scheme do not require such maximum number of New ZDP Shares to be
issued to ZDP Shareholders, it is intended that the excess may be
issued pursuant to the Placing.
N+1 Singer will use its reasonable endeavours to procure
subscribers for the balance of New ZDP Shares up to the Maximum
Issue Size. No commission will be paid by the Group to any placee
in connection with the Placing, which is not underwritten.
ZDP Shareholders seeking to roll over their investment into New
ZDP Shares will be allocated New ZDP Shares in preference to any
subscriptions from investors under the Placing.
A summary of the placing agreement entered into among the
Parent, the Manager, PEWT Securities 2020 and N+1 Singer is set out
in paragraph 9 of Part 8 of the Prospectus.
4.7 The Placing
Programme
Following completion of the Scheme (and any Placing), and
pursuant to the ZDP Placing Programme, the directors of PEWT
Securities 2020 may issue New ZDP Shares to satisfy demand for the
New ZDP Shares and to grow the assets of the Group.
No issuance of New ZDP Shares will be permitted which would
result in:
- in respect of the period to 31 March
2016 (and only to the extent that the Maximum Issue Size has
not been exceeded at the relevant time pursuant to the Scheme, the
Placing and any previous issues under the ZDP Placing Programme),
those New ZDP Shares in issue immediately thereafter having a Cover
of not less 1.45 times immediately following the issue; and
- in respect of all other issues, a reduction in Cover from the
level immediately prior to the issue unless a minimum Cover of 1.8
times post the issue is maintained.
Further details of the ZDP Placing Programme are set out in the
Prospectus accompanying the Circular.
4.8 The General
Meetings and winding-up of PEWT Securities
The implementation of the Proposals requires the passing of the
Resolutions at the First General Meeting and the Second General
Meeting. Neither ZDP Shareholders nor Ordinary Shareholders are
entitled to attend or vote at either General Meeting. The
Parent, as the holder of all of the ordinary shares in the capital
of PEWT Securities, shall be the only person entitled to attend and
vote at the General Meetings. The Parent has indicated its
intention to vote in favour of the Resolutions at each General
Meeting and so it is expected that the Proposals will be
implemented.
At the First General Meeting, special resolutions will be
proposed to: (i) re-classify the rights attaching to the Existing
ZDP Shares such that those ZDP Shareholders who elect, or are
deemed to elect, to rollover into New ZDP Shares will hold shares
with “A” rights giving them the right to receive New ZDP
Shares on a winding-up of PEWT Securities and those ZDP
Shareholders who elect, or are deemed to elect, to receive cash
will hold Existing ZDP Shares with “B” rights giving them the right
to receive cash on the winding-up of PEWT Securities; (ii)
authorise the implementation of the Scheme by the Liquidators
including an application to delist the Existing ZDP Shares from the
Official List of the UK
Listing Authority; and (iii) amend the Articles for the purposes
of the implementation of the Scheme. The amendments to the Articles
are set out in full in the Appendix to the Circular.
The First General Meeting has been convened for 10.00 a.m. on 21 December
2015 to be held at the offices of Stephenson Harwood LLP.
Neither ZDP Shareholders nor Ordinary Shareholders may attend or
vote at the First General Meeting.
At the Second General Meeting, special resolutions will be
proposed to: (i) wind up PEWT Securities voluntarily; (ii) appoint
the Liquidators; and (iii) confer certain powers on the
Liquidators.
The Second General Meeting has been convened for 9.00 a.m. on 31 December
2015 to be held at the offices of Stephenson Harwood LLP.
Neither ZDP Shareholders nor Ordinary Shareholders may attend or
vote at the Second General Meeting.
4.9 Dealings in
Existing ZDP Shares and Reclassified Shares
It is advised that the last day for trading in the Existing ZDP
Shares on the London Stock Exchange for normal settlement (in order
to enable settlement prior to the Record Date) will be 8 December 2015. As from 24 December 2015, dealings shall be for cash
settlement only and, in the case of certificated Existing ZDP
Shares, will only be registered if documents of title are delivered
immediately.
The Record Date, being the date for determining which ZDP
Shareholders are entitled to participate in the Scheme, is
5.00 p.m. on 11 December 2015. Application for the amendment
of the Official List to reflect the Reclassified Shares will be
made, and it is expected that such amendment will become effective,
and that dealings in such Shares will commence, at 8.00 a.m. on 30 December
2015. For the purposes of dealings in the Reclassified
Shares, all ZDP Shareholders will be treated as certificated
holders. It is expected that dealings on the London Stock Exchange
in the Reclassified Shares will be suspended at 8.00 a.m. on 31 December
2015.
If ZDP Shareholders dispose of their Existing ZDP Shares
otherwise than through the London Stock Exchange, they must make
their own arrangements with the other parties concerned as regards
entitlement under the Scheme.
4.10 Share
certificates and payment of cash entitlements
Certificates will not be issued in respect of Reclassified
Shares. Existing certificates in respect of Existing ZDP Shares
will cease to be of value for any purpose, and any existing credit
of Existing ZDP Shares in any stock account in CREST will be
cancelled, following the despatch to ZDP Shareholders of share
certificates in respect of the New ZDP Shares issued under the
Scheme (or, in the case of ZDP Shareholders previously holding
their Existing ZDP Shares in uncertificated form, the appropriate
stock accounts in CREST of such ZDP Shareholders are credited with
their respective entitlements to New ZDP Shares) or, as the case
may be, their cash entitlements.
If the Scheme becomes effective, cheques in respect of the Final
Capital Entitlements due to ZDP Shareholders holding their Existing
ZDP Shares in certificated form who have elected or are deemed to
have elected for the Cash Option are expected to be despatched by
the Receiving Agent on 8 January
2016. All ZDP Shareholders who hold their Existing ZDP
Shares in CREST will receive payment of their cash entitlement
through the CREST system.
All documents and remittances despatched to or from ZDP
Shareholders or their appointed agents in connection with the
Scheme and liquidation of PEWT Securities will be despatched at
Shareholders’ own risk and no acknowledgement will be issued for
receipt of Forms of Election or TTE Instructions.
4.11 Overseas
Shareholders
ZDP Shareholders who are Overseas Shareholders will not receive
a Form of Election and will (unless the Directors determine
otherwise) receive their Final Capital Entitlement in cash in
respect of their entire holding of Existing ZDP Shares unless they
have satisfied the Directors that it is lawful for New ZDP Shares
to be issued to them under any relevant overseas laws and
regulations.
4.12 Taxation
The attention of ZDP Shareholders is drawn to paragraph 2 of
Part 5 of the Circular which sets out a general guide to certain
aspects of current UK taxation law and HMRC published practice.
- Costs of the Proposals
On the assumption that (i) the Gross Assets on 11 December 2015 are £75.9 million, which were
the Gross Assets as at the Latest Practicable Date, (ii) the number
of Existing ZDP Shares in issue as at the Effective Date is
22,446,099, which is the number of Existing ZDP Shares in issue as
at the date of the Circular, and (iii) all ZDP Shareholders are
eligible to, and do, elect for the Rollover Option, then the costs
of implementing the Proposals are expected to be approximately
£484,000 (equivalent to approximately 1.82 per cent. of the Net
Asset Value as at the Latest Practicable Date). These costs will be
borne by the Parent and so will effectively be borne by the
Ordinary Shareholders.
If the Proposals are not implemented, the costs of the Proposals
will, in any event, be borne by the Parent and so will effectively
be borne by the Ordinary Shareholders.
- Conditions to the Proposals
The Scheme which provides for, and which will effect, the
Rollover Option, is conditional upon:
- the passing of the Resolutions to be proposed at the First
General Meeting (or any adjournment thereof) and upon any
conditions of such Resolutions being satisfied and the passing of
the Resolutions to be proposed at the Second General Meeting (or
any adjournment thereof);
- the UK Listing Authority agreeing to admit to the standard
segment of the Official List the Reclassified Shares and the London
Stock Exchange agreeing to admit the Reclassified Shares to trading
on its main market for listed securities, and, subject only to
allotment thereof, the New ZDP Shares to be issued pursuant to the
Issue also being agreed to be so admitted; and
- the Minimum Issue Size being achieved.
The Parent, as the holder of all of the ordinary shares in the
capital of PEWT Securities, shall be the only person entitled to
attend and vote at the General Meetings. The Parent has indicated
its intention to vote in favour of the Resolutions at each General
Meeting and so it is expected that the Proposals will be
implemented.
- Certain considerations relating to the Proposals
The implementation of, and an Election for one or more Options
under, the Proposals carry with them certain considerations for ZDP
Shareholders as described below:
- ZDP Shareholders will need to consider the tax consequences of
the Proposals, based on their particular circumstances. As
described in paragraph 2 of Part 5 of the Circular, UK resident ZDP
Shareholders who elect for, or who are deemed to elect for the Cash
Option (including as a result of scaling back of elections under
the Scheme), will generally be treated as a making a disposal of
their Existing ZDP Shares and may incur a tax liability as a
result. Similarly, ZDP Shareholders who elect to roll over some or
all of their entitlement into New ZDP Shares may incur tax
liabilities on any subsequent disposal of their New ZDP Shares.
Shareholders who are in any doubt as to the tax consequences of the
Proposals should seek independent professional advice. ZDP
Shareholders who elect to roll over their investment into New ZDP
Shares should not generally be treated as making a disposal for the
purposes of UK taxation of chargeable gains as a result of doing
so;
- elections for New ZDP Shares may be subject to scaling back
under the Scheme. This may result in ZDP Shareholders receiving
part of their Final Capital Entitlements under the Scheme in cash
rather than in New ZDP Shares;
- the default option under the Scheme is for a ZDP Shareholder to
receive the Final Capital Entitlement in cash. ZDP Shareholders
making no Election under the Scheme will therefore receive
cash;
- the New ZDP Shares are designed to be held over the long-term
and may not be suitable as shortterm investments. There can be no
guarantee that any appreciation in the value of the Group’s
investments will occur and investors may not get back the full
value of their investment. The past performance of the Group is not
a guide to the future performance of the Group. On the assumption
that (i) Gross Assets on 31 December
2015 are £75.9 million, which were the Gross Assets as at
the Latest Practicable Date; and (ii) the Maximum Issue Size is
achieved, then it is expected that following completion of the
Scheme and the Placing, Gross Assets would need to fall by 31.0 per
cent. in total, and 7.3 per cent. annually, in order for the New
ZDP Shares not to receive their full 2020 Final Capital Entitlement
of 125.6519p per New ZDP Share on 30
November 2020;
- there can be no guarantee that the investment objective of the
Parent will be achieved. A failure to meet the investment objective
may have a material adverse effect on the ability of the Parent to
meet its obligations under the New Undertaking Agreement and
thereby on the ability of PEWT Securities 2020 to pay the 2020
Final Capital Entitlement in full on the 2020 ZDP Repayment Date;
and
- the ability of PEWT Securities 2020 to pay such amounts is
dependent on it having sufficient cash resources to meet such
obligation and therefore on the Parent meeting its obligation under
the New Undertaking Agreement to contribute such funds to PEWT
Securities 2020 so as to ensure PEWT Securities 2020 has sufficient
assets at the relevant time.
- Action to be taken
Details of the action to be taken by
ZDP Shareholders in relation to the Proposals are set out in Part 2
of the Circular.
It is important that ZDP Shareholders
read Part 2 carefully and, if they wish to make a full or partial
election for New ZDP Shares, where their Existing ZDP Shares are
held in certificated form, return their Forms of Election or, where
their Existing ZDP Shares are held in uncertificated form, submit
their TTE Instructions so as to be received no later than
1.00 p.m. on 11 December 2015.
Failure to return or submit a Form of
Election or a TTE Instruction or the return or submission of a Form
of Election or a TTE Instruction which is not validly completed
will result in the relevant ZDP Shareholder being deemed to have
elected for the Cash Option.
- No recommendation
The Board considers that the Proposals set out in the Circular
are in the best interests of Shareholders as a whole and of ZDP
Shareholders as a class. However, the Directors make no
recommendation to ZDP Shareholders as to whether or not they should
elect to receive New ZDP Shares or cash under the Scheme. The
benefits of the Options under the Scheme to ZDP Shareholders will
depend on their own personal, financial and tax circumstances and
their investment objectives. Accordingly, you are recommended to
read carefully all the information in the Circular and in the
Prospectus before making any election. The choice between the
Options is a matter for each ZDP Shareholder to decide.
ZDP Shareholders in any doubt as to
the action they should take should consult an appropriately
qualified independent adviser, authorised under the Financial
Services and Markets Act 2000, without delay.
Yours faithfully
Geoffrey
Burns
Chairman
Expected timetable of principal
events
Publication of Prospectus of PEWT Securities 2020
plc |
20 November 2015 |
Latest time and date for receipt of the Forms of
Election or TTE Instructions from ZDP Shareholders |
1.00 p.m. on 11 December 2015 |
Record Date for entitlement to the Scheme |
5.00 p.m. on 11 December 2015 |
Latest time and date for commitments under the
Placing |
5.00 p.m. on 18 December 2015 |
Announcement of the results of the Elections |
14 December 2015 |
Announcement of the results of the First General
Meeting of PEWT Securities |
21 December 2015 |
Date from which dealings in Existing ZDP Shares
should only be for cash settlement and immediate delivery of
documents of title |
24 December 2015 |
Reclassification of Existing ZDP Shares into
Reclassified Shares |
8.00 a.m. on 30 December 2015 |
Dealings in Reclassified Shares suspended |
8.00 a.m. on 31 December 2015 |
Announcement of the results of the Second General
Meeting of PEWT Securities |
31 December 2015 |
Publication of the results of the Scheme and the
Placing |
31 December 2015 |
If the Scheme becomes
unconditional: |
|
Scheme Effective Date |
31 December 2015 |
Cancellation of the Existing ZDP Shares from the
Official List |
8.00 a.m. on 4 January 2016 |
Admission and commencement of dealings in New ZDP
Shares of PEWT Securities 2020 (ISIN GB00BYP98L62) |
8.00 a.m. on 4 January 2016 |
CREST stock accounts expected to be credited in
respect of New ZDP Shares |
As soon as practicable after 8.00
a.m. on 4 January 2016 |
Despatch of share certificates in respect of New
ZDP Shares |
8 January 2016 |
Consideration expected to be despatched to ZDP
Shareholders who elect or are deemed to elect for the Cash
Option |
8 January 2016 |
-END-