RNS Number : 7112I
Asset Management Investment Co.PLC
21 November 2008
Asset Management Investment Company PLC
Recommended proposals for return of cash to Shareholders of 27 pence per Ordinary Share amounting to approximately �5 million, the
adoption of new Articles of Association, and the cancellation of the capital redemption reserve
21 November 2008
Introduction
Further to the announcement made on 6 October 2008, Asset Management Investment Company PLC (the "Company'') has today published a
circular to Shareholders with details of recommended proposals for a return of cash to Shareholders (subject to Shareholder approval) and
convening an Extraordinary General Meeting for 17 December 2008 ("the Circular").
The Return of Cash is being made using a bonus share structure as this allows all Shareholders to be treated equally and provides
maximum opportunity for Shareholders (other than certain Overseas Shareholders) to choose between receiving the cash in the form of income
or capital for UK tax purposes. It also gives the Company certainty as to the size, timing and financial impact of the Return of Cash on the
Company.
The Return of Cash will require the existing Articles of Association to be amended, therefore the Board is also taking this opportunity
to update the Articles generally for certain provisions relating to the new Companies Act 2006 which are currently in force. The Proposals
also require the cancellation of the Company's capital redemption reserve.
The Circular sets out details of, and this Announcement summarises, the Proposals and the Directors' reasons for recommending that
Shareholders vote in favour of the Resolutions to be proposed at the Extraordinary General Meeting.
Background to the Proposals
On 4 September 2008 the Company announced that it had received notification from International Foreign Exchange Concepts, Inc. of its
intention to exercise a call option in respect of the 20,014 ordinary shares of FX Concepts held by the Company, at a price of $500 per
share. The total amount receivable by the Company of $10.0 million was converted into sterling on 31 October 2008 using a forward contract
at a �/US$ exchange rate of 1.755. The gross sterling equivalent of approximately �5.7 million has now been received. The Company's
investment in the 10 per cent. promissory loan note issued by FX Concepts remains unaffected by the exercise of this call option.
The Board has consulted with major shareholders and its advisers to determine the most appropriate method for returning the proceeds of
this sale to Shareholders. In formulating the Return of Cash, the Board has been mindful to ensure that all Shareholders are treated equally
and that substantially all of the proceeds of the sale, after costs, are returned to Shareholders.
Summary of the Return of Cash
It is proposed that the Return of Cash will return 27 pence per Ordinary Share to Shareholders and will be implemented by way of a bonus
issue of either B Shares or C Shares, depending upon Elections, to Shareholders on the basis of one B Share or one C Share for each Ordinary
Share held at the Record Date.
Neither the B Shares nor the C Shares will be admitted to the Official List nor to trading on the London Stock Exchange's Main Market
nor will they be listed on any other investment exchange. The B Shares and C Shares will have very restricted rights but will have the right
to an accrued dividend calculated by reference to the number of days the shares are in issue.
The main features of the Return of Cash are as follows:
* The Return of Cash is conditional upon sufficient distributable reserves being available, the Resolutions being approved by
Shareholders and the Cancellation being confirmed by the Court (as described below).
* All Shareholders will be able to participate in the Return of Cash and Shareholders will be able to opt to receive either B Shares
or C Shares under the Bonus Issue, depending upon their personal circumstances.
* B Shares will be purchased by Numis Securities under the Purchase Offer at 27 pence per share.
* C shares will be redeemed by the Company at 27 pence per share.
* Subject to certain limited exceptions, Excluded Overseas Shareholders will be deemed to have elected for the Income Option in
respect of all their holding of Ordinary Shares.
The choices available to Shareholders under the Return of Cash, are summarised below.
The Return of Cash Options
The Capital Option: B Shares
Under the Capital Option, Shareholders will receive B Shares in respect of the relevant number of Optional Entitlements they elect for
or are deemed to have elected for the Capital Option. Shareholders wishing to receive the Capital Option in respect of all their Shares need
not return an Election Form, but to the extent that an Election is made for the Capital Option, Shareholders must specify a whole number
which does not exceed their total Optional Entitlements and should also take into account any election made for the Income Option. In
electing the Capital Option, Shareholders are also electing to sell all of their B Shares to Numis Securities, acting as principal, pursuant
to the Purchase Offer expected to be made on 6 February 2009, for 27 pence plus an amount in respect of Accrued Dividend per B Share, free
of all dealing expenses and commissions. If the Purchase Offer is made, as expected, on 6 February 2009, the Accrued Dividend in respect of
a B Share will be less than one penny.
The Purchase Offer will be capable of being accepted by the Company on behalf of, and without the specific consent of, B Shareholders at
the appropriate time. The Purchase Offer, and therefore the Capital Option, is not available to Excluded Overseas Shareholders, save as set
out in the section headed "Overseas Shareholders" below.
In order for the Purchase Offer to be made, the Company has entered into arrangements with Numis Securities whereby it will, subject to
satisfaction of all conditions, require Numis Securities to make the Purchase Offer. Following the EGM (but subject to Shareholder
approval), the Company and Numis Securities will enter into a further agreement, the Put Option Agreement, whereby Numis Securities may
require the Company to repurchase, as an off market purchase, any B Shares purchased by it under the Purchase Offer or any similar offer
(whether made on a compulsory basis or otherwise) for an amount equal to the aggregate amount paid by Numis Securities for such B Shares,
including in respect of accrued dividend, as rounded. Under the 1985 Act, this latter agreement must be approved by Shareholders before it
may be entered into and accordingly the Put Option Agreement is being proposed for approval at the EGM. Shareholders (other than Excluded
Overseas Shareholders) who do not return an Election Form, or who return an Election Form which is invalid, will be deemed to have elected for the Capital Option in respect of all their holding of
Ordinary Shares.
The Income Option: C Shares
Under the Income Option, Shareholders will receive C Shares in respect of whatever number of Optional Entitlements they elect for or are
deemed to have elected for. In electing for the Income Option, Shareholders must specify a whole number which does not exceed their total
Optional Entitlements and should also take into account any election made for the Capital Option. If Shareholders are deemed to have chosen
the Income Option, they will receive C Shares in respect of whatever proportion of Optional Entitlements they are deemed to have elected for
the Income Option.
The C Shares are expected to be redeemed at the option of the Company one day after their issue and Shareholders will be entitled to
receive the C Share Redemption Payment of 27 pence for each C Share elected for, or were deemed to have elected for. Shareholders will also
receive the Accrued Dividend in respect of their C Shares, which will have accrued between the date of the issue of the C Shares and the
date of the C Share Redemption. If the C Shares are redeemed, as expected, on 6 February 2009, the Accrued Dividend in respect of a C Share
will be less than one penny.
Subject to certain limited exceptions, Excluded Overseas Shareholders will be deemed to have elected for the Income Option in respect of
all their holding of Ordinary Shares.
Cancellation of Capital Redemption Reserve
In implementing the Proposals, the Company is required to comply with the statutory restrictions on the use of its reserves and, in
particular, the use only of those reserves determined to be distributable in connection with the repurchase and/or redemption of the
Company's shares. As a consequence, subject to certain exceptions, the Proposals may only proceed if the Company has sufficient
distributable reserves (as these are defined in law) to fund them.
As at the date of the Circular, and principally as a result of recent falls in the value of the Company's investments, the Company's
distributable reserves have fallen below the level required to fund the Proposals in their entirety out of current distributable reserves.
The Board is therefore proposing to create further distributable reserves by the cancellation of the Company's entire capital redemption
reserve (accumulated following the cancellation of zero dividend preference shares and Ordinary Shares repurchased by the Company),
currently standing at approximately �8.76 million. Any cancellation may only be made with the approval of the High Court in London.
Accordingly, if the resolutions to be proposed at the Extraordinary General Meeting are duly passed, an application will be made to the
Court for such Cancellation.
Overseas Shareholders
Numis Securities is prohibited from making the Purchase Offer to Overseas Shareholders in Restricted Territories. Therefore, the
Purchase Offer will not be available to Excluded Overseas Shareholders on the register on the Record Date. Instead, subject to certain
limited exceptions, Excluded Overseas Shareholders will receive C Shares as discussed above. However, the Company is aware that certain
Excluded Overseas Shareholders, as a consequence of their country of residency, will be excluded from the Purchase Offer by Numis Securities
and are likely to receive unfavourable tax treatment upon receipt of redemption monies. The Company is therefore proposing to make separate
arrangements to issue such Shareholders with B Shares and to repurchase such B Shares directly under the terms of a separate off-market
purchase agreement. Under the 1985 Act, this purchase agreement must be approved by Shareholders before it may be entered into and
accordingly the Purchase Agreement is being tabled for approval at the EGM. Such arrangements are entirely at the discretion of the Board and will only proceed if the Board is satisfied that it may do so without
breaching any restrictions of any non-UK jurisdiction or any local law or regulation in any jurisdiction in which such Shareholders are
located. Further, by entering into such arrangements, the Company is not advising or making any statement in relation to the likely
treatment of receipt of purchase monies by Shareholders. Excluded Overseas Shareholders who would like to take advantage of such
arrangements are invited to write to the Directors at the Company's registered office with details of their holding. The Board reserves the
right in its absolute discretion to reject any requests made in this manner. As the potential beneficiaries of these arrangements are
required to be specified in the Purchase Agreement, it is only possible to make these arrangements available to Excluded Overseas
Shareholders on the Company's register of members at the date of the Circular.
General
Due to the requirement for the Cancellation to be approved by the Court prior to the Return of Cash being completed, expected to be on
or around 5 February 2009, it is expected that a cheque for the proceeds of the B Share Repurchase and C Share Redemption (in each case
including any amount in respect of the Accrued Dividend) will be sent to Shareholders with the proceeds in the week commencing 9 February
2009. The Proposals are also conditional upon Shareholder approval.
New Articles of Association
A number of consequential amendments to the Company's Articles of Association will be required in order to implement the Return of Cash.
In addition, the law in relation to companies is currently undergoing a number of changes following the introduction of new companies
legislation in the United Kingdom under the Companies Act 2006. The changes are being implemented in stages, with some parts already in
force and the final parts due to be implemented in October 2009. Some of the changes will apply automatically to the Company, whilst others
will require the Company to take specific steps to take advantage of, or exclude, as the case may be, the effect of the changes.
Accordingly, in light of the need to amend the Existing Articles to provide for the B Shares and the C Shares, your Board is proposing to
adopt new Articles of Association to reflect not only the rights of the B Shares and C Shares, but also certain provisions of the 2006 Act
which are currently in force.
Share Repurchases
The Board continues to pay close attention to the discount to NAV at which the Shares trade and intends to continue the Company's policy
of repurchasing Shares for cancellation. The Return of Cash equates to the return in aggregate of approximately 95 per cent. of the total
sum received from FX Concepts less expenses, and the balance of the proceeds will be available to repurchase Shares if the Board deems it
appropriate. Repurchases will be at the absolute discretion of the Board, which will be exercised subject to all usual legal and regulatory
restrictions and to the retention of prudent working capital. The Board will only authorise repurchases at prices representing a discount
greater than 10 per cent. to NAV.
Costs
The costs and expenses relating to the Return of Cash to be paid by the Company, including legal and other professional costs, the costs
of printing the Circular and including VAT (to the extent applicable) are estimated to be approximately �285,000. This includes stamp duty
of some �25,000 payable by the Company in relation to the repurchase of B Shares.
Dealings
The Record Date for the purposes of the Return of Cash is 6.00 p.m. on 12 December 2008. It is expected that the B Share Repurchase Date
and the C Share Redemption Payment Date will be on or around 6 February 2009 (subject to the Cancellation being confirmed by the Court) and
that Shareholders will receive a cheque in respect of the B Share Payment and/or the C Share Redemption (together with any Accrued Dividend
entitlement) in the week commencing 9 February 2009. No share certificates will be issued with respect to the B Shares or C Shares. For the
avoidance of doubt, certificates in respect of Ordinary Shares will remain valid.
Extraordinary General Meeting
The Proposals are conditional upon the approval of Shareholders. Accordingly, an extraordinary general meeting has been convened for
Wednesday, 17 December 2008 at which the following resolutions will be proposed as special resolutions:
The first resolution seeks to authorise the cancellation of the entire capital redemption reserve, subject to the confirmation of the
Court.
The second resolution seeks to:
* authorise the conversion, subdivision and reclassification of 76,034 unissued Ordinary Shares into B Shares and/or C Shares
(according to Elections and deemed Elections under the Bonus Issue);
* adopt new articles of association in substitution for and the entire exclusion of the Existing Articles;
* capitalise the sum of �19,008.333 standing to the credit of the Company's special reserve to pay up in full the B Shares and C
Shares;
* allot and issue the B Shares and C Shares up to an aggregate amount of �19,008.333 to Shareholders on the basis of one B Share
and/or C Share for each Ordinary Share held on the Record Date. As at 18 November 2008, being the latest practicable date before publication
of the Circular, the authority referred to above represented 0.4 per cent. of the total issued ordinary share capital. The authority granted
hereunder will expire on the earlier of the conclusion of the Company's Annual General Meeting held in 2010 or 15 months from the date the
Resolution is passed;
* approve the cancellation of any B Shares or C Shares which remain unissued at 31 March 2009;
* approve the Put Option Agreement in relation to the repurchase of B Shares from Numis Securities; and
* approve the Purchase Agreement in relation to the repurchase of B Shares from certain Overseas Shareholders.
Contact Details
For further information please contact:
George Robb, AMIC
Managing Director and Chief Investment Officer
Telephone: 020 7618 9041
Bharat Bhagani
Company Secretary and Financial Controller
Telephone: 020 7618 9044
David Benda/Nathan Brown
Numis Securities, Corporate Broking
Telephone: 020 7260 1275/1426
Expected Timetable
2008
Record Date for Return of Cash
Friday, 12 December
Latest time and date for receipt of Election Form
5.00 p.m. on Friday,
12 December
Latest time and date for receipt of Form of Proxy
11.00 a.m. on
Monday, 15 December
Extraordinary General Meeting
11.00 a.m. on
Wednesday, 17
December
2009
Court Hearing to confirm the Cancellation
Wednesday, 4
February
Effective Date for Cancellation
Thursday, 5
February*
Allotment of B Shares and C Shares
8.00 a.m. on
Thursday, 5
February*
Redemption of C Shares
Friday, 6 February*
Numis Securities makes the Purchase Offer by means of an announcement on a Regulatory Information Service
8.00 a.m. on Friday,
6 February*
Purchase of B Shares by Numis Securities to be completed and Numis Securities to be registered as the holder of B Shares
by 11.55 p.m. on
Friday, 6 February*
Despatch of cheques in respect of proceeds of the C Share Redemption and Purchase Offer week commencing
Week commencing
Monday, 9 February*
In the event of material changes to the above times and/or dates, the revised time(s) and/or date(s) will be notified to Shareholders by
announcement through a Regulatory Information Service.
* The Cancellation will become effective upon the registration of the Court Order at the Company's Registry.
* These dates are indicative only and will depend upon the Cancellation being confirmed by the Court.
Notes
The information in this announcement should be read in conjunction with the full text of the Circular. Capitalised terms used in this
announcement shall, unless the context otherwise requires, bear the meaning given to them in the circular issued by the Company Limited
dated 21 November 2008.
Copies of the Circular have been submitted to the UK Listing Authority and will shortly be available for inspection at the UK Listing
Authority's Document Viewing Facility which is situated at:
Financial Services Authority
25 The North Colonnade
Canary Wharf
London E14 5HS
Tel. 020 7066 1000
This announcement and the information contained herein is not for publication, distribution or release in, or into, directly or
indirectly, jurisdictions other than the United Kingdom and does not constitute, or form part of, an offer of securities for sale in or into
jurisdictions other than the United Kingdom.
This announcement should not be construed as advice relating to legal, taxation or any other matters and does not constitute a
recommendation to sell or the solicitation of an offer to subscribe for or buy, nor shall there be any sale of, any securities in any
jurisdiction in which such offer, solicitation or sale would be unlawful or would impose any unfulfilled registration, publication or
approval requirements on the Company or Numis Securities Limited.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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