TIDMMWJ
RNS Number : 7671W
Morant Wright Japan Inc. Tst. Ltd
24 November 2010
Morant Wright Japan Income Trust Limited (the "Company")
(a closed-ended investment company incorporated with limited
liability under the laws of Guernsey with registered number
43839)
24th November 2010
Publication of Winding Up Circular
The Board of Morant Wright Japan Income Trust Limited today
announce a proposal to appoint a liquidator and to place the
Company into voluntary winding up which is to be put forward for
consideration by Shareholders at a general meeting. In respect to
this, the Company has published a circular (the "Circular")
providing details of the Proposal and further information regarding
the unwinding of the Swap and the Final Interim Dividend.
The Proposal is conditional on Shareholders passing the
Liquidation Resolution at the forthcoming EGM on 15 December 2010.
Terms used in this announcement have the same meaning as set out in
the Circular.
Background to the Proposal
The Company was incorporated on 25 October 2005 as a
closed-ended company with the investment objective of generating
absolute returns for investors through a policy of investing in
Japanese equities which the Investment Manager considered were
strong but undervalued. In November 2005 the Company carried out an
Offer and Placing raising approximately GBP142.2 million of initial
capital (the "Issue"). In order to provide the Company with a high
dividend yield, the Company entered into a cross currency swap
arrangement with a five-year maturity (the "Swap Agreement") in
respect of substantially the whole of the net proceeds of the
Issue.
As set out in the Company's Prospectus dated 9 November 2005,
the Swap Agreement has a five year maturity and will be unwound on
30 November 2010. Following the unwinding of the Swap, the
Directors expect to resolve to declare a final interim dividend
(the "Final Interim Dividend") on or around 2 December 2010.
Further details regarding the unwinding of the Swap and the Final
Interim Dividend are set out in sections 2 and 3, respectively,
below.
Pursuant to the Articles of the Company, the Company has a fixed
life of approximately five years and is due to be wound up on or
around 15 December 2010 subject to the prior approval of the
Shareholders by ordinary resolution. In relation to the proposed
resolution to wind up the Company, the Articles provide that the
Shareholders voting in favour of this resolution will collectively
have sufficient votes for the resolution to be passed irrespective
of the number of votes cast against.
In accordance with the provisions of the Articles summarised
above, the Company has today announced a proposal to appoint a
liquidator and to place the Company into voluntary winding up (the
"Proposal") which is to be put forward for consideration by
Shareholders at a general meeting to be held in Guernsey on 15
December 2010 at 10.00 a.m. (the "Extraordinary General Meeting").
The Notice of Extraordinary General Meeting is set out at the end
of the Circular.
The Liquidation Resolution is subject to Shareholder approval by
ordinary resolution at the Extraordinary General Meeting.
Dealings in the Shares will be suspended with effect from 7.30
a.m. on 15 December 2010.
At close of business on 22 November 2010, the Company's Shares
were trading at a price of 43.75 pence. The Company's latest
published NAV per Share is 45.97 pence and, as at 22 November 2010,
its net assets were GBP65,353,435.93. In the event that the
Liquidation Resolution is approved by Shareholders, the Liquidator
currently intends, as soon as practicable following the passing of
the Liquidation Resolution, to make an initial capital distribution
to Shareholders on the Register at 7.30 a.m. as at 15 December
2010.
Currency Hedging Structure and the Swap Agreement
At inception the Company entered into the Swap Agreement with
the Swap Counterparty. Pursuant to the Swap Agreement the Company
paid substantially the whole of the Net Issue Proceeds of the
Placing and the Offer (the "Sterling Principal") to the Swap
Counterparty and in return, the Company received the equivalent
amount in Yen (the "Yen Principal") based on prevailing exchange
rates at that time.
The terms of the Swap Agreement require the gross assets of the
Company to cover at least twice the sterling mark-to-market value
of the Swap (where such value is negative) (the "Asset Coverage
Ratio"). In the event that the Company's investments decreased in
value and/or the value of Sterling depreciated against the Yen such
that the Asset Coverage Ratio was not met, the Company was required
to unwind a proportion of the Swap in order to meet the Asset
Coverage Ratio. Since entering into the Swap, the Company has
undertaken partial unwindings of the Swap on three occasions which,
in aggregate, related to 50 per cent. of the original Swap notional
amount.
The Investment Manager has realised the Japanese equity
investments in the Company's investment portfolio during November
2010. The proceeds from such realisation will be used to repay the
Yen Principal to the Swap Counterparty. The Investment Manager
intends to hold the Company's assets in Sterling from 30 November
2010 onwards following the unwinding of the Swap.
On 30 November 2010 the remaining amount of the Swap will be
unwound and the following payments are due to be made:
(a) the fifth anniversary interest payment - the Swap
Counterparty is required to pay an interest payment of
approximately GBP1.1 million to the Company and the Company is
required to pay an interest payment of JPY 172.6 million to the
Swap Counterparty; and
(b) the repayment of the principal - the Swap Counterparty is
required to repay the notional Sterling Principal of GBP69.5
million to the Company and the Company is required to repay the
notional Yen Principal of JPY 14.4 billion.
Final Interim Dividend
Subject to the Directors being able to do so in accordance with
applicable law and regulation (including, without limitation, the
Companies Law), the Directors intend to declare a Final Interim
Dividend following the unwinding of the Swap. It is expected that
the Final Interim Dividend will be paid to Shareholders on 14
December 2010. The Directors currently expect that the Final
Interim Dividend will return income to Shareholders representing
the net fifth anniversary interest payment received pursuant to the
Swap (as summarised above) and the majority of retained income
received from the Company's Japanese Equities Portfolio that has
not already been distributed or utilised (which currently amounts
to approximately GBP1,315,127).
Further details of the Final Interim Dividend are expected to be
announced through the regulatory information service on or around 2
December 2010.
The Winding-up
The Liquidation Resolution will be proposed at the EGM and, if
approved, will put the Company into voluntary winding-up.
If the Liquidation Resolution is approved by Shareholders at the
EGM, Mr James Robert Toynton of Grant Thornton Limited will be
appointed as the Company's Liquidator. Upon the appointment of the
Liquidator at the Extraordinary General Meeting, all powers of the
Board will cease and the Liquidator will be responsible for the
affairs of the Company until it is wound up. The Investment
Management Agreement between the Company and the Investment Manager
will also be terminated upon the conclusion of the Extraordinary
General Meeting if the Liquidation Resolution is approved.
The Liquidator will retain the Company's other current service
providers (its Custodian, Northern Trust Global Services Limited
and its Administrator, Secretary and Registrar, Northern Trust
International Fund Administration Services (Guernsey) Limited)
until the dissolution of the Company, at which point the Company's
agreements with those service providers will be terminated.
The Liquidator will wind up the Company in accordance with the
Companies Law. All distributions made by the Liquidator pursuant to
the winding-up will be subject to the retention of certain assets
in order to provide for the cost of implementation of the Proposal,
any outstanding fees and payables of the Company (including the
Liquidator's own fees) and an amount which the Liquidator considers
sufficient to meet any contingent and unknown liabilities of the
Company (the "Retention"). The Retention is not currently expected
to exceed GBP50,000.
The Liquidator currently intends, as soon as practicable
following the passing of the Liquidation Resolution, to make an
initial capital distribution to Shareholders on the Register at
7.30 a.m. as at 15 December 2010. Any unutilised amount within the
Retention will potentially be available for future distributions to
Shareholders.
If the Liquidation Resolution is approved by Shareholders at the
EGM, it is expected that the Guernsey Financial Services Commission
will suspend the Company's authorisation under the Protection of
Investors (Bailiwick of Guernsey) Law, 1987 as amended, and, once
the liquidation is complete that authorisation will be
cancelled.
If the Liquidation Resolution is not approved by Shareholders,
the EGM will be adjourned following the vote on the Liquidation
Resolution and the Directors will formulate proposals regarding the
future of the Company. Those proposals will be announced through a
regulatory information service as soon as practicable following the
date of the EGM. Shareholders should note that it is highly
unlikely that the Liquidation Resolution will not be approved owing
to the provisions of the Articles that apply to the number of votes
attaching to Shares voting for the Liquidation Resolution and the
fact that the Directors intend to vote the Shares beneficially
owned by them in favour of the Liquidation Resolution.
Cancellation of the Company's listing
In connection with the Company's entry into liquidation, the
Company proposes to seek the cancellation of the listing of its
Shares on the CISX and the Official List of the UKLA and their
trading on the Main Market of the London Stock Exchange plc.
In the event that the Liquidation Resolution is approved by
Shareholders the Company's listing on the Official List of the UK
Listing Authority will be cancelled with effect from 8.00 a.m. on
16 December 2010. Application has also been made by the Company to
cancel the listing of the Shares on the CISX with effect from 8.00
a.m. on 16 December 2010.
Estimated costs and net proceeds of the winding-up
It is anticipated that the costs and expenses of implementing
the Proposal will be approximately GBP240,000 (which includes the
Liquidator's estimated expenses of GBP25,000). When making
distributions pursuant to the winding-up the Liquidator will
establish a Retention of such amount as he considers appropriate,
for the payment of his own fees and those of the Company's advisors
in connection with the winding-up, as well as other payables.
Expected Timetable
Final Interim Dividend declared on or around 2 December 2010
--------------------------------- -------------------------------------------
Final Interim Dividend Record expected to be 5.00 p.m. on 10
Date December 2010
--------------------------------- -------------------------------------------
Latest time and date for receipt By 10.00 a.m. on 13 December
of Forms of Proxy 2010
--------------------------------- -------------------------------------------
Final Interim Dividend paid expected to be 14 December 2010
--------------------------------- -------------------------------------------
Suspension of dealings in the 7.30 a.m. on 15 December 2010
Shares
--------------------------------- -------------------------------------------
Extraordinary General Meeting 10.00 a.m. on 15 December 2010
--------------------------------- -------------------------------------------
Announcement of the result of by 6.00 p.m. on 15 December
the EGM 2010
--------------------------------- -------------------------------------------
Cancellation of the listing of 8.00 a.m. on 16 December 2010
the Shares
--------------------------------- -------------------------------------------
Enquiries
Morant Wright Management Limited
Ian Wright
tephen Morant +44 20 7499 9980
---------------------------------- ----------------------------
J.P. Morgan Cazenove
William Simmonds
Edward Gibson-Watt +44 20 7588 2828
---------------------------------- ----------------------------
A copy of the Circular has been submitted to the National
Storage Mechanism and will shortly be available for inspection at:
www.Hemscott.com/nsm.do
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCFEIFMLFSSEIF
Morant Wright Japan Income Trust (LSE:MWJ)
Historical Stock Chart
From Oct 2024 to Nov 2024
Morant Wright Japan Income Trust (LSE:MWJ)
Historical Stock Chart
From Nov 2023 to Nov 2024
