TIDMNIO3 TIDM3NIO TIDM3NIE
RNS Number : 8408H
Leverage Shares PLC
28 November 2022
`
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Leverage Shares plc
28 November 2022
Notice to the ETP Securityholders of a Meeting of the Leverage
Shares 3x Long NIO ETP Securities
THIS NOTICE IS IMPORTANT AND REQUIRES THE IMMEDIATE ATTENTION OF
THE HOLDERS OF THE ETP SECURITIES. IF ANY ETP SECURITYHOLDER IS IN
ANY DOUBT AS TO THE ACTION THEY SHOULD TAKE, THEY SHOULD CONSULT
THEIR OWN INDEPENT PROFESSIONAL ADVISERS IMMEDIATELY. THIS NOTICE
MAY CONTAIN INSIDE INFORMATION FOR THE PURPOSES OF THE MARKET ABUSE
REGULATION (EU) 596/2014.
If you have recently sold or otherwise transferred your entire
holding(s) of ETP Securities referred to below, you should
immediately forward this document to the purchaser or transferee or
to the stockbroker, bank or other agent through whom the sale or
transfer was effected for transmission to the purchaser or
transferee
Leverage Shares PLC
2(nd) Floor, Block 5
Irish Life Centre
Abbey Street Lower
Dublin 1
D01 P767
Ireland
(the "Issuer")
Leverage Shares 3x Long NIO ETP Securities (ISIN:
XS2399365472)
(together the "Relevant Series")
NOTICE IS HEREBY GIVEN that the meeting of the ETP
Securityholders of the Relevant Series convened by the Issuer on 18
November 2022 (the "Original Meeting") by Notice dated 26 October
2022 published in accordance with the terns of the Trust Deed
constituting the Relevant Series was adjourned through lack of
quorum and that an adjourned meeting (the "Adjourned Meeting") of
the ETP Securityholders of the Relevant Series will be held at
2(nd) Floor, Block 5, Irish Life Centre, Abbey Street Lower, Dublin
1, D01 P767, Ireland on 13 December 2022 at 11.30 am Dublin time
(which is not less than 14 nor more than 42 calendar days after the
date of the Original Meeting). Such Adjourned Meeting will be held
for the purpose of considering and, if thought fit, passing the
resolution set out in Annex 1 hereto, which will be proposed as an
Extraordinary Resolution, in accordance with the provisions of
Schedule 6 (Provisions for Meetings of the ETP Securityholders) of
the master trust deed originally dated 5 December 2017 as most
recently amended and restated on 16 August 2022 and as supplemented
by a supplemental trust deed dated 13 December 2021 (the "Trust
Deed") made between the Issuer and Apex Corporate Trustees (UK)
Limited (the "Trustee") and constituting the Relevant Series.
Capitalised terms used, but not defined, in this Notice shall
have the meaning given thereto in the Conditions of the ETP
Securities set out therein.
BACKGROUND
On 21 September 2022 the ETP Security Value of the ETP
Securities of the Relevant Series fell below 2% of the Principal
Amount.
Condition 8.5(A)(1) provides "If on any Valuation Date (a
"Threshold Event Date") the ETP Security Value falls to less than
2.00 per cent. of the Principal Amount of the ETP Securities... The
Issuer shall give notice convening a meeting of the ETP
Securityholders on a date not less than 30 calendar days after the
Threshold Event Date for the purpose of considering an
Extraordinary Resolution which would have the effect of reducing
the Principal Amount of the ETP Securities to an amount which is
not less than 2.00 per cent of the ETP Security Value as at the
time of suspension of redemptions, in which event the suspension
will cease only if such Extraordinary Resolution is passed". To
date, the Issuer has not suspended redemptions of ETP Securities of
the Relevant Series, nor has the Issuer convened a meeting referred
to in Condition 8.5(A)(1) within 30 days of the Threshold
Redemption Date (the "First Matter").
Condition 8.7(B) provides "if on any Valuation Date falling on
or after the 60(th) calendar day following a Threshold Event, the
ETP Security Value is less than 2.00 per cent. of the Principal
Amount of such ETP Securities, the Issuer shall designate a
Mandatory Redemption Date in respect of the ETP Securities". To
date, the Issuer has not designated a Mandatory Redemption Event
with respect to the Relevant Series (the "Second Matter").
The Issuer is proposing to consolidate the ETP Securities of the
Relevant Series into ETP Securities with a proportionately higher
value, as detailed below. Such consolidation is reasonably expected
to improve the liquidity of the ETPs of the Relevant Series for
secondary market investors.
PROPOSED CONSOLIDATION OF THE ETP SECURITIES OF THE RELEVANT
SERIES
The Issuer is proposing to consolidate all of the ETP Securities
of the Relevant Series into ETP Securities with a proportionately
larger ETP Security Value of approximately US$ 10.00 per ETP
Security (the "Target ETP Security Value"), so that for every ETP
Security of the Relevant Series held by an ETP Securityholder, they
will hold a smaller number of ETP Securities after the
consolidation such that the resulting ETP Security Value is as
close as possible to the Target ETP Security Value. The number of
ETP Securities resulting from the consolidation relative to the
number of ETP Securities before the consolidation (the
"Consolidation Ratio") would be determined by the Issuer by
reference to the ETP Security Value of the Relevant Series on the
Valuation Date following approval of the Consolidation or as soon
as reasonably practicable thereafter using the following
formula:
Consolidation Ratio = Target ETP Security Value / V(t)
Where:
V(t) is the ETP Security Value on t; and
t is the Valuation Date determined and notified by the Issuer in
accordance with the Conditions.
The Consolidation Ratio will be rounded down to the nearest full
integer. If as a result of the Consolidation of the ETP Securities,
an ETP Securityholder would become entitled to a fraction of an ETP
Security, the Issuer will redeem such fractional ETP Security. The
Issuer will notify the Consolidation Ratio and any resulting
fractional shares to ETP Securityholders in accordance with the
Conditions no later than two (2) Business Days immediately
following V(t) . (the "Consolidation").
ETP Securityholders should be aware that it is not proposed to
amend the Principal Amount applicable to the Relevant Series
proportionate to the Consolidation. As the Consolidation will
result in an ETP Securityholder holding less ETPs (albeit at a
proportionately higher ETP Security Value), this will impact the
return an investor would receive on a Mandatory Redemption,
Optional Redemption or Final Redemption (a "Redemption Event"), if
the Principal Protection Amount is higher than the Pro-rata
Liquidation amount at the time of the Redemption Event (assuming
that the same number of ETPs are held at the Redemption Event as
held immediately after the Consolidation).
The below examples demonstrate the impact the Consolidation
would have (i) on an ETP Securityholder's economic interest in a
Series of ETP Securities; and (ii) on the value of the Principal
Protection Amount.
Example 1 - impact of consolidation (with no fractional ETP
Securities) on an ETP Securityholder's economic interest in a
Series of ETP Securities - for illustration purposes only
# ETP Securities Hypothetical Value economic
held by an ETP Value per ETP interest
Securityholder Security
Pre consolidation 600,000 US$0.006 US$3,600
effective date
----------------- --------------- ---------------
Consolidation 2,000 US$1.80 US$3,600
effective date [=600,000/300] [0.006*300]
----------------- --------------- ---------------
Example 2- impact of consolidation (with fractional ETP
Securities) on an ETP Securityholder's economic interest in a
Series of ETP Securities- for illustration purposes only
# ETP Securities Hypothetical Value economic
held by an ETP Value per ETP interest
Securityholder Security
Pre consolidation 605,000 US$0.006 US$3,630
effective
date
---------------- ------------------------ --------------- ---------------
Consolidation New ETP 2,016 US$1.80 US$3,628.80
effective Securities [=605,000/300 [0.006*300]
date rounded down]
---------------- ------------------------ --------------- ---------------
Fractional 200 US$0.006 US$1.20
ETP Securities [=605,000-(2,016*300)]
---------------- ------------------------ --------------- ---------------
Examples 1 and 2 demonstrate in two hypothetical contexts how a
consolidation would have no impact on an investor's economic
interest in a Series of ETP Securities.
Example 3 - impact of consolidation on the Principal Protection
Amount - for illustration purposes only
# ETP Securities Principal Principal Total Value
Amount Protection of Principal
Amount per Protection
ETP Security Amount
Pre consolidation 600,000 US$20 US$0.40 US$240,000
[2% of $20] [600,000*$0.40]
----------------- ---------- -------------- -----------------
Post consolidation 2,000 US$20 US$0.40 US$800
[2% of $20] [2,000*$0.40]
----------------- ---------- -------------- -----------------
Example 3 illustrates in a hypothetical context the impact a
consolidation would have on the total value of the Principal
Protection Amount. The Principal Protection Amount is relevant as
it would be the amount payable per ETP Security on a Redemption
Event in circumstances where the Principal Protection Amount is
higher than the Pro-rata Liquidation amount. Such a scenario might
arise where a significant decrease in the value of the Reference
Asset underlying the Relevant Series has occurred.
The Consolidation would be effected by a deed supplemental to
the Trust Deed prepared by the Issuer and in such form as the
Issuer considers necessary, appropriate or expedient to give effect
to the Consolidation (the "Consolidation Supplemental Trust
Deed").
PROPOSAL
The purpose of the Adjourned Meeting is for the ETP
Securityholders to consider and, if thought fit, approve the
Consolidation and to waive any breaches of the Conditions which
have occurred to date in relation to the First Matter and the
Second Matter (the "Proposal"):
The Issuer is aware of 2 holders of ETP Securities, together
holding 108,696 ETP Securities of the Relevant Series, who have
indicated their intention to vote in favour of the Proposal.
Accordingly, if such indications are correct and if no other ETP
Securityholders of the Relevant Series choose to vote, it is
anticipated that the Proposal will ultimately be approved.
If the Proposal is approved by the Adjourned Meeting, the
Consolidation would become effective on such date as shall be
notified to the ETP Securityholders of the Relevant Series by the
Issuer.
FORM OF THE EXTRAORDINARY RESOLUTION
The resolution that will be put to the ETP Securityholders of
the Relevant Series at the Adjourned Meeting in order to pass the
Proposal is set out in Annex 1 hereto. The Proposal is set out in a
single Extraordinary Resolution.
DOCUMENTATION
The Trustee has not been involved in the formulation or
negotiation of the Proposal (as defined herein) and, in accordance
with normal practice, the Trustee expresses no opinion on the
merits of the Proposal (which it was not involved in negotiating)
or the Extraordinary Resolution (as set out herein) and no opinion
on whether the ETP Securityholders would be acting in their best
interests voting for or against the Proposal or the Extraordinary
Resolution but on the basis of the information contained in this
Notice has authorised it to be stated that it has no objection to
the Extraordinary Resolution being submitted to the ETP
Securityholders for their consideration. The Trustee makes no
representation that all relevant information has been disclosed to
the ETP Securityholders in connection with the Proposal in this
Notice or otherwise. The Trustee is not responsible for the
accuracy, completeness, validity or correctness of the statements
made in this Notice or omissions therefrom. Nothing in this Notice
should be construed as a recommendation to the ETP Securityholders
from the Trustee to vote in favour of, or against, any of the
Proposal or the Extraordinary Resolution. The Trustee recommends
that the ETP Securityholders take their own independent
professional advice on the merits and the consequences of voting in
favour of, or against, each of the Extraordinary Resolution and the
Proposal.
No person has been authorised to make any recommendation on
behalf of the Issuer, the Trustee or the Issuing and Paying Agent
as to whether or how the ETP Securityholders should vote pursuant
to the Proposal. No person has been authorised to give any
information, or to make any representation in connection therewith,
other than those contained herein. If made or given, such
recommendation or any such information or representation must not
be relied upon as having been authorised by the Issuer, the Trustee
or the Issuing and Paying Agent.
This Notice is issued and directed only to the ETP
Securityholders of the Relevant Series and no other person shall,
or is entitled to, rely or act on, or be able to rely or act on,
its contents.
Each person receiving this Notice must make its own analysis and
investigation regarding the Proposal and make its own voting
decision, with particular reference to its own investment
objectives and experience, and any other factors which may be
relevant to it in connection with such voting decision. If such
person is in any doubt about any aspect of the Proposal and/or the
action it should take in respect of it, it should consult its
professional advisers.
QUORUM AND VOTING
The provisions governing the convening and holding of the
Adjourned Meetings are set out in Schedule 6 to the Trust Deed
(Provisions for Meetings of ETP Securityholders).
Quorum
The quorum required at the Adjourned Meeting called to pass the
Extraordinary Resolution is two or more ETP Securityholders or
agents present in person holding or representing ETP Securities,
whatever the number of ETP Securities so held or represented.
If a quorum is not present within 15 minutes from the time
initially fixed for the Adjourned Meeting, the Adjourned Meeting
will be dissolved.
Voting
The provisions for meetings of the ETP Securityholders is set
out in Schedule 6 of the Master Trust Deed. A holder of an ETP
Security may appoint a proxy in accordance with the relevant rules
and procedures of the Relevant Clearing System.
In order to exercise voting instructions an ETP Securityholder
must request the Relevant Clearing System to block the ETP
Securities in his own account and to hold the same to the order or
under the control of a Paying Agent not later than 48 hours before
the time fixed for the Adjourned Meeting in order to give voting
instructions to the relevant Paying Agent in respect of the votes
attributable to the blocked ETP Securities. Unless an ETP
Securityholder instructs otherwise, the chairman of the Adjourned
Meeting shall be deemed to be appointed as the ETP Securityholder's
proxy for the Adjourned Meeting. The ETP Securities so blocked will
not be released until the earlier of the conclusion of the
Adjourned Meeting; and in respect of a form of proxy, not less than
48 hours before the time for which the Adjourned Meeting is
convened or the revocation of such form of proxy where notice of
such revocation has been given to the relevant Paying Agent.
Voting instructions must therefore be received by the Registrar
by 11.30 am on 9 December 2022. The deadlines set by any
intermediary, broker, dealer, commercial bank, custodian, trust
company or other nominee institution and each Relevant Clearing
System for the submission and (in the limited circumstances where
permitted) revocation of voting instructions may be earlier than
the relevant deadlines specified above. You should check with your
relevant custodian or nominee immediately to understand what
earlier deadlines are set by your nominee institution or
institutions.
Any proxy so appointed or representative so appointed shall so
long as such appointment remains in full force be deemed, for all
purposes in connection with the Adjourned Meeting of the ETP
Securityholders, to be the holder of the ETP Securities to which
such appointment relates and the holder of the ETP Securities shall
be deemed for such purposes not to be the holder or owner,
respectively.
Each question submitted to the Adjourned Meeting shall be
decided by a show of hands unless a poll is (before, or on the
declaration of the result of, the show of hands) demanded by the
chairman, the Issuer, the Trustee or one or more persons
representing 2 per cent. of the aggregate number of the ETP
Securities outstanding.
Unless a poll is demanded, a declaration by the chairman that a
resolution has or has not been passed shall be conclusive evidence
of the fact, without proof of the number or proportion of the votes
cast in favour of or against it.
If a poll is demanded, it shall be taken in such manner and
(subject as provided below) either at once or after such
adjournment as the chairman directs. The result of the poll shall
be deemed to be the resolution of the Adjourned Meeting as at the
date it was taken. A demand for a poll shall not prevent the
Adjourned Meeting continuing for the transaction of business other
than the question on which it has been demanded.
A poll demanded on the election of a chairman or on a question
of adjournment shall be taken at once.
On a poll, every such person has one vote in respect of each ETP
Security of such Series of ETP Securities so produced or
represented by the voting certificate so produced or for which he
is a proxy or representative. Without prejudice to the obligations
of proxies, a person entitled to more than one vote need not use
them all or cast them all in the same way.
To be passed at the Adjourned Meeting, an Extraordinary
Resolution requires a majority of at least 75 per cent. of the
votes cast.
An Extraordinary Resolution shall be binding on all the ETP
Securityholders, whether or not present at the Adjourned Meeting
and each of them shall be bound to give effect to it accordingly.
The passing of an Extraordinary Resolution shall be conclusive
evidence that the circumstances justify its being passed. The
Issuer shall give notice of the passing of an Extraordinary
Resolution to ETP Securityholders within 14 calendar days but
failure to do so shall not invalidate such an Extraordinary
Resolution.
Subject to the quorum for the Adjourned Meeting being satisfied
and the Extraordinary Resolution being passed at the Adjourned
Meeting by a majority of at least 75 per cent. of the votes cast
and all relevant documents being executed, the Proposal will become
effective and the ETP Securityholders will be notified thereof by
the Issuer in accordance with the Conditions.
This notice is given by:
Leverage Shares plc
___________________
Dated 28 November 2022
Contact details:
Apex IFS Limited
2(nd) Floor, Block 5
Irish Life Centre
Abbey Street Lower
Dublin 1
D01 P767
ANNEX 1
FORM OF EXTRAORDINARY RESOLUTION
"THAT this meeting of the holders of the Leverage Shares 3x Long
NIO ETP Securities of Leverage Shares plc currently outstanding
(the "ETP Securityholders", the "ETP Securities" and the "Issuer"
respectively) constituted by the master trust deed originally dated
5 December 2017 as most recently amended and restated on 16 August
2022 and as supplemented by a supplemental trust deed dated 13
December 2021 (the "Trust Deed") made between, among others, the
Issuer and Apex Corporate Trustees (UK) Limited (the "Trustee") as
trustee for the ETP Securityholders hereby resolves by way of
Extraordinary Resolution to:
1. assent to the Consolidation and to waive any breach or
default of the Conditions or any of the Programme Documents
occurring up to the date hereof which has arisen in relation or as
a consequence of the First Matter and/or the Second Matter
(collectively the "Proposed Amendments") and authorise and direct
the Trustee to concur and agree to the Proposed Amendments and
authorise and direct the Trustee and the Issuer, where applicable,
to execute the Consolidation Supplemental Trust Deed (the matters
referred to above, the "Proposal");
2. sanction every abrogation, modification, variation,
compromise or arrangement in respect of the rights of the ETP
Securityholders appertaining to the ETP Securities, whether or not
such rights arise under the Trust Deed, involved in or resulting
from or effected by the Proposal and its implementation;
3. authorise, direct, request and empower the Trustee and the
Issuer to concur in the Proposal and, in order to give effect
thereto and to implement the same, to execute the Consolidation
Supplemental Trust Deed and to execute and do, all such other
deeds, instruments, acts and things as may be necessary, expedient,
desirable or appropriate to carry out and give effect to this
Extraordinary Resolution and the implementation of the
Proposal;
4. discharge and exonerate the Trustee and the Issuer from all
and any liability for which they may have become or may become
responsible under the Trust Deed or the ETP Securities in respect
of any act or omission in connection with the Proposal, its
implementation or this Extraordinary Resolution and its
implementation;
5. irrevocably and unconditionally waive any claim that we may
have against the Trustee as a result of anything done or omitted to
be done by the Trustee in good faith in connection with this (i)
Extraordinary Resolution, (ii) the Consolidation, (iii) the
Consolidation Supplemental Trust Deed, (iv) the Proposed Amendments
and/ or (v) the Proposal;
6. indemnify the Trustee, on demand, against any cost, loss or
liability incurred in connection with (i) any act (or omission to
act) or step implementing this Extraordinary Resolution, (ii) the
Consolidation, (iii) the Consolidation Supplemental Trust Deed,
(iv) the Proposed Amendments and/ or (v) the Proposal; unless such
cost, loss or liability has been caused by the Trustee's fraud,
gross negligence or wilful default; and
7. acknowledge that capitalised terms used in this Extraordinary
Resolution have the same meanings as those defined in the Notice of
Adjourned Meeting and/ or the Trust Deed (including the Conditions
of the ETP Securities), unless otherwise defined herein or unless
the context otherwise requires."
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END
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