Circ re Proposals - voluntary winding-up/reconstruction
March 22 2012 - 12:52PM
UK Regulatory
TIDMSR.
22 March 2012
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION INTO ANY JURISDICTION OTHER THAN
THE EEA, THE CHANNEL ISLANDS OR THE ISLE OF MAN
SR Europe Investment Trust plc (the "Company")
Proposals for the voluntary winding-up and reconstruction of the Company
The Company announces today proposals for the voluntary winding-up and
reconstruction of the Company. The Proposals offer Shareholders the choice of
(a) rolling over their investment without triggering a charge to capital gains
tax into a UK authorized unit trust with European exposure, or (b) realising
all or part of their investment for cash. The Jupiter European Fund has an
investment objective which will enable Shareholders to continue their
investment exposure to quoted companies on European stock exchanges. In
addition, the total expense ratio of the Jupiter European Fund is currently
lower than the total expense ratio of the Company. The risk of any share price
discount will also be removed as units in the Jupiter European Fund may be
issued and redeemed at net asset value on any Business Day.
In order to effect the Scheme and the proposed amendments to the Articles of
Association to provide for Reclassified Share rights, Shareholder approval is
required at the First General Meeting under the provisions of the Companies
Act. If the Scheme is implemented, Shareholder approval is required at the
Second General Meeting pursuant to the Insolvency Act 1986 to wind-up the
Company voluntarily and to appoint and grant authority to the Liquidators. In
addition, a Resolution will be proposed at the Second General Meeting to
approve the cancellation of the listing of the Shares on the Official List of
the UK Listing Authority pursuant to the Listing Rules.
The notices of the General Meetings are set out at in the circular of the
Company (the "Circular"), which is being published today. The Circular also
convenes the Annual General Meeting. Capitalised terms used in this
announcement have the same meaning as set out in the Circular.
In addition, the final dividend for the year ended 31 December 2011 would
normally be paid in May 2012. However, in light of the Proposals, the Board
will pay an interim dividend on 20 April 2012 of 1.25 pence per Share to
Shareholders. It is not anticipated that there will be further dividends paid
in relation to the year ended 31 December 2011 or for the period up to
liquidation of the Company.
Background to the Proposals
Under the Proposals, the Company will be put into members' voluntary
liquidation and Shareholders on the Register at the Record Date will be able to
elect:
a. to receive cash in the liquidation in respect of all or part of their
investment in the Company following realisation by the Manager of the
underlying investments (the "Cash Option"); and/or
b. to roll over all or part of their investment in the Company into Jupiter
European Fund Units (the "Rollover Option") and remain invested in a
portfolio of companies quoted on European stock exchanges. Details of the
Jupiter European Fund are set out in the Circular.
Shareholders may make different elections in respect of different parts of
their holdings of Shares, as suits their personal investment requirements.
The default option under the Scheme will be Jupiter European Fund Units meaning
that a Shareholder (other than an Overseas Shareholder) who, in respect of all
or part of his or her holding of 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 Rollover Option in respect
of such holding. Overseas Shareholders will be deemed to have elected for cash
in respect of their entire holding.
The Scheme is conditional upon, inter alia, the relevant resolutions being
passed at the First General Meeting and the Second General Meeting.
Benefits of the Proposals
The Directors believe that the Proposals will provide the following benefits:
* the Proposals offer all Shareholders the opportunity of rolling their
investment into a vehicle with an investment objective which will enable
Shareholders to continue their investment exposure to quoted companies on
European stock exchanges;
* Shareholders should expect to receive approximately 99.0 per cent. of NAV
(or 185.41 pence per Share, after provision for the costs of the
Proposals), on the basis of a NAV per Share in the Company of 187.30 pence
(as at close of business on 16 March 2012), if electing for either cash or
rolling in to Jupiter European Fund Units;
* the Proposals offer all Shareholders the option to elect in full or in part
for cash, which will be satisfied through a realisation of the portfolio;
* Shareholders who elect (or who are deemed to elect) for the Rollover Option
will benefit from the fact that the Jupiter European Fund Units will carry
no risk of trading at a discount to its net asset value;
* the Proposals provide greater choice than if the Company were simply to be
wound up because, as an alternative to receiving cash, they enable
Shareholders to keep their exposure to European listed investments;
* Shareholders who elect (or who are deemed to elect) for the Rollover Option
will not be required to pay an initial (sales) charge or meet any
requirement for a minimum subscription level;
* the Jupiter European Fund Units for which Shareholders may elect pursuant
to the Scheme are I-Class Accumulation Units in the Jupiter European Fund
which benefit from a reduced annual management charge of 0.75 per cent. per
annum compared to an annual management charge of 1.50 per cent. per annum
that is charged to holders of other units in the Jupiter European Fund; and
* Shareholders who may be subject to UK capital gains tax or corporation tax
on gains on their investment in the Company should be able to roll over
their investment into Jupiter European Fund Units without crystallising an
immediate charge to UK capital gains tax or corporation tax on gains.
Shareholders who are in any doubt as to the contents of the Circular or as to
the action to be taken should seek their own personal financial advice from
their independent professional adviser authorized under the FSMA.
Information on Jupiter European Fund
The Jupiter European Fund is a UK authorised unit trust which aims to achieve
long-term capital growth from investment in companies quoted on a European
stock exchange.
The manager of the Jupiter European Fund is Jupiter Unit Trust Managers
Limited, whose registered office and principal place of business is 1 Grosvenor
Place, London, SW1X 7JJ. Jupiter Unit Trust Managers Limited is a member of the
Investment Management Association and is authorised and regulated by the FSA.
The portfolio manager of the Jupiter European Fund is Alexander Darwall.
Further information on the Jupiter European Fund can be found in the Circular.
Jupiter European Fund Units
Shareholders who elect, or are deemed to have elected, to receive Jupiter
European Fund Units will, if the Scheme becomes effective, receive
Institutional Class ("I-Class") accumulation units in the Jupiter European
Fund. Income attributable to accumulation units is automatically added to (and
retained as part of) the capital assets of the Jupiter European Fund and is
reflected in the unit price of those accumulation units.
I-Class units of the Jupiter European Fund normally have a minimum initial
investment level of GBP5 million. Jupiter has agreed to waive this initial
investment limit in relation to Jupiter European Fund Units issued pursuant to
the Scheme. However, Shareholders should note that, if they wish to subscribe
for further units in the Jupiter European Fund, they would have to subscribe
for units other than I-Class units (currently only income units) unless their
holding of I-Class units were to have or thereby reach a minimum value of GBP5
million. In addition, were Shareholders to switch their investment in the
Jupiter European Fund to another Jupiter unit trust, they would have to switch
to units other than I-Class units unless they were to meet the minimum
investment threshold of GBP5million. Shareholders should also note that Jupiter
levies a lower annual management charge (currently 0.75 per cent per annum) in
relation to I-Class units in the Jupiter European Fund than the 1.50 per cent
annual management charge that is levied in relation to units which are not
I-Class units.
Further details about the Jupiter European Fund are set out in the Jupiter
European Fund simplified prospectus and the scheme particulars relating to the
Jupiter European Fund, which are available from Jupiter on request by calling
0844 620 7600 or by email to enquiries@jupiteronline.co.uk.
Dealings and settlement in Jupiter European Fund Units
If the Scheme becomes effective, the first day of dealings in Jupiter European
Fund Units issued under the Scheme is expected to be 3 May 2012. No initial
charge will be levied on the issue of Jupiter European Fund Units to
Shareholders under the Scheme.
Jupiter European Fund Units will be issued in registered but uncertificated
form, with title to them being evidenced by an entry in Jupiter European Fund's
register of unitholders. Accordingly, certificates will not be issued. However,
Shareholders who elect to receive Jupiter European Fund Units will receive
written confirmation of the Jupiter European Fund Units issued to them under
the Scheme, and it is expected that such written confirmations will be
despatched on 2 May 2012 (or as soon as possible thereafter).
Shareholders electing (or who are deemed to elect) to receive Jupiter European
Fund Units may be required to supply evidence of identity for anti-money
laundering purposes. Failure to provide this information when requested to do
so may delay the payment of any proceeds should the Jupiter European Fund Units
subsequently be sold.
Further details of the Scheme
Mechanics of the Scheme
If the Scheme is to be implemented, as part of the reconstruction of the
Company it is necessary to reorganise the Company's share capital. Accordingly,
subject inter alia to the passing of the Scheme Resolution set out in the
notice convening the First General Meeting, the Shares will be reclassified
with different rights, depending on Scheme Elections made, or deemed to have
been made, and the entitlements of Shareholders under the Scheme. No dividends
are payable on the Reclassified Shares. Further details of the Reclassified
Shares are set out in the Circular. The full terms of the proposed amendments
to the Articles of Association (to incorporate the rights of the Reclassified
Shares) are set out in the Scheme Resolution to be proposed at the First
General Meeting, and will be available for inspection at the address specified
in Part 4 of the Circular from today until the Effective Date and for at least
15 minutes prior to and during the First General Meeting and the Second General
Meeting.
Subject, inter alia, to the passing of the Scheme Resolution at the First
General Meeting and the first and second resolutions at the Second General
Meeting, the Company will be placed into members' voluntary liquidation and the
Scheme will take effect. However, before any assets are transferred to the
Jupiter European Fund under the Scheme or set aside to pay Shareholders who
have or are deemed to have elected in whole or in part for cash in terms of the
Cash Option, the Liquidators will set aside sufficient assets in the
Liquidation Retention Fund to meet all estimated current and future, actual and
contingent liabilities and costs which the Company has agreed to pay (including
the costs of the Proposals payable by the Company to the extent not previously
paid). The Liquidators will also provide in the Liquidation Retention Fund for
a retention which they consider sufficient to meet any unknown and
unascertained liabilities of the Company. The retention amount is currently not
expected to exceed GBP50,000.
After provision has been made for the Liquidation Retention Fund, the remainder
of the Company's assets will be appropriated to the Rollover Pool or the Cash
Pool in proportions corresponding to the Scheme Elections made, or deemed to be
made, by Shareholders under the Scheme. The Rollover Pool will then be
transferred to the Jupiter European Fund pursuant to the terms of the Transfer
Agreement. In consideration for such transfer, Jupiter European Fund Units will
be issued at their creation price to Shareholders who have elected, or are
deemed to have elected, for Jupiter European Fund Units. The Cash Pool will be
used to pay the entitlements of Shareholders who have elected or are deemed to
have elected for cash.
The assets comprised in the Cash Pool will be realised on or prior to the
Effective Date at the best prices available. The Liquidators will take steps to
ensure that any investments that remain in the Cash Pool on the Effective Date
will be realised without regard to achieving maximum value to allow a first and
final distribution on or before 31 May 2012. However, if, as expected, all
realisations are completed by the Effective Date, the Liquidators expect to
distribute cash proceeds of the realization of the assets comprised in the Cash
Pool in one distribution on or around 11 May 2012.
Any surplus in the Liquidation Retention Fund will be paid in cash to
Shareholders on the Register on the Record Date pro rata to their respective
holdings as one or more liquidation distributions, save that, in relation to
interim distributions, no single payment of less than GBP5 will be made to any
Shareholder and instead will be transferred back to the Liquidation Retention
Fund for the benefit of that Shareholder and in relation to the final
liquidation distribution, no single payment of less than GBP5 will be made to any
Shareholder. Any such residual amounts will be transferred to a charity
nominated by the chairman of the Company. The Liquidators shall be entitled to
make interim distributions to Shareholders pro rata to their respective
holdings as at the close of business on the Record Date.
It is expected that there will be only one distribution from the Liquidation
Retention Fund.
Overseas Shareholders
To ensure that there is no breach of any applicable securities laws, the
Circular is being sent to Overseas Shareholders solely to enable them to vote
at the General Meetings. Accordingly, Forms of Election will not be sent to any
Shareholders who are Overseas Shareholders. If the Scheme becomes effective,
all Overseas Shareholders will, unless they are able to satisfy the Company
that they are permitted to hold Jupiter European Fund Units without breaching
the laws of any relevant jurisdictions, be treated as having validly elected
for cash in respect of their entire holding of Shares.
ISA and savings scheme holders
Recipients of the Circular who are the beneficial owners of Shares held through
a savings scheme or ISA should follow the instructions provided by the relevant
plan manager or consult the plan manager or their professional adviser if no
instructions have been provided. Jupiter European Fund Units are eligible to be
held within the stocks and shares component of an ISA.
Termination of Management and Administration Arrangements
The Company's Manager is Sloane Robinson LLP. On 8 February 2012, the Company
served three months' notice to terminate the Management Agreement. On 8
February 2012, the Company served six months' notice to terminate the
Administration Agreement.
Costs of the Proposals
If the Scheme proceeds, the direct costs to be borne by all Shareholders for
the Scheme are estimated to be approximately GBP525,000, including the costs
involved in realising the portfolio. This is approximately 1.0 per cent. of the
Company's Net Asset Value as at close of business on 16 March 2012, being the
last practicable date prior to the publication of the Circular.
Interim Dividend
The final dividend for the year ended 31 December 2011 would normally be paid
in May 2012. However, in the light of the Proposals, the Board has declared an
interim dividend of 1.25p per Share payable to Shareholders on the register at
the close of business on 13 April 2012. This dividend will be paid on or around
20 April 2012 (i.e. prior to the Record Date for the Scheme).
It is not anticipated that there will be further dividends paid in relation to
the year ended 31 December 2011 or for the period up to the liquidation of the
Company.
Subscription Shareholders
Subscription Shareholders will have received, together with the Circular, a
notice reminding them of their final right to subscribe for Shares at the
Annual General Meeting and informing Subscription Shareholders of the
procedures to follow in order to exercise such right.
It is anticipated that all rights attached to the Subscription Shares shall
lapse following the Annual General Meeting.
The exercise price at which Subscription Shareholders may subscribe for Shares
is 244p. As at close of business on 16 March 2012 (being the latest practicable
date prior to the issue of the Circular), the NAV per Share was 187.30p and the
Share price was 179.50p. Accordingly, the Directors do not anticipate that any
Subscription Shareholder will exercise their subscription rights at the AGM.
Upon the exercise of subscription rights, the Subscription Shareholder's
interest in the Shares will be registered in the Register and, provided the
Scheme Resolution is passed, such Shares will be reclassified as Reclassified
Shares. Accordingly, if a Subscription Shareholder intends to exercise their
subscription rights and subscribe for Shares at the Annual General Meeting and
elect for cash pursuant to the Scheme, they should also send a Form of Election
to the Receiving Agent, Computershare Investor Services PLC, as soon as
possible but in any event so as to be received by not later than 3.00 p.m. on
23 April 2012 in relation to the Shares to be issued following such exercise of
subscription rights. Subscription Shareholders should tick the box in Section 2
on the Form of Election to signify that the election under the Scheme is being
made in relation to Shares to be issued pursuant to the exercise of
subscription rights at the Annual General Meeting.
Subscription Shareholders need not return a Form of Election if they intend to
exercise subscription rights and receive Jupiter European Fund Units in respect
of the Shares arising on exercise of such subscription rights.
Shares that are issued following the Annual General Meeting pursuant to the
exercise of subscription Rights may not be voted at the First General Meeting.
However, such Shares will carry the right to vote at the Second General
Meeting. Accordingly, Subscription Shareholders will also find enclosed a Form
of Proxy in relation to the Second General Meeting.
Subscription Shareholders may not complete a Form of Proxy if they have not
validly exercised their subscription rights at the Annual General Meeting and
may only vote in relation to the number of Shares issued pursuant to such
exercise of subscription rights.
Annual General Meeting
The Company normally holds its annual general meeting in May each year.
However, in light of the Proposals, the Board has considered that it would be
prudent to bring forward the AGM to immediately prior to the First General
Meeting in order to crystallise the final subscription date for Subscription
Shareholders to exercise their rights to subscribe for Shares. This will mean
that Subscription Shareholders will not have a class vote in relation to the
Scheme Resolution to be considered at the First General Meeting which will,
inter alia, reclassify the Shares.
In view of the proposed liquidation of the Company, the Directors have decided
that the Company should not incur the costs of preparing audited accounts for
the financial year ended 31 December 2011. Accordingly, no accounts will be
laid before Shareholders at the AGM for approval nor will a continuation vote,
which is required to be proposed at the annual general meeting at which audited
accounts for the year ended 31 December 2011 are to be approved, be put forward
at the AGM.
The only business to be considered at the AGM will therefore be the re-election
of certain Directors. The Listing Rules state that any director of a company
who is also an employee or officer of the investment manager shall be subject
to re-election by shareholders on an annual basis. As a result Mr Sloane will
be required to seek annual re-election and will offer himself for re-election
at the forthcoming AGM.
Under the Articles of Association, all directors are subject to periodic
retirement and re-election by shareholders. All directors are required to
submit themselves for re-election at least every three years. The Board's
policy with regard to tenure of office is that any director having served for
nine years since his re-election will be required to seek annual re-election
thereafter. Accordingly, Messrs Guinness and Riley are required to seek
reappointment at the forthcoming AGM.
Resolutions to re-elect Messrs Guinness, Riley and Sloane are contained within
the notice of Annual General Meeting in the Circular. The other Board members
recommend that Shareholders vote for the re-election of Messrs Guinness, Riley
and Sloane. They believe that their skills, knowledge and overall performance
are of continued benefit to the Company and each has actively contributed in
meetings and strategies throughout the year.
None of the Directors has a contract of service with the Company. Other than
letters of appointment governing their appointment as Directors, there has not
been any contract or arrangement between the Company and any Director at any
time. There are no agreements between the Company and its Directors concerning
compensation for loss of office.
Expected Timetable
2012
Ex dividend date for the Interim Dividend 11 April
Record date for the Interim Dividend 6.00 p.m. on 13 April
Payment of the Interim Dividend 20 April
Latest time and date for receipt of Forms of Proxy in 2.30 p.m. on 23 April
respect of the Annual General Meeting
Latest time and date for receipt of Forms of Election 3.00 p.m. on 23 April
from Shareholders and TTE Instructions from CREST
Shareholders in relation to the Scheme
Latest time and date for receipt of Forms of Proxy in 3.00 p.m. on 23 April
respect of the First General Meeting
Record Date for Shareholders' entitlements under the 6.00 p.m. on 23 April
Scheme
Shares disabled in CREST* 6.00 p.m. on 23 April
Latest time and date for receipt of conversion notices 2.00 p.m. on 24 April
from Subscription Shareholders and USE instructions
from CREST Subscription Shareholders in relation to
the exercise of subscription rights attached to
Subscription Shares
Annual General Meeting 2.30 p.m. on 25 April
Shares issued in respect of any exercise of 25 April
Subscription Share rights
First General Meeting 3.00 p.m. on 25 April
Results of the Annual General Meeting and the First 25 April
General Meeting Announced
Latest time and date for receipt of Forms of Proxy in 11.00 a.m. on 30 April
respect of the Second General Meeting
Calculation Date 30 April
Shares reclassified, Official List amended and 8.00 a.m. on 1 May
dealings in the Reclassified Shares commence on the
London Stock Exchange**
Dealings in Reclassified Shares on the London Stock 7.30 a.m. on 2 May
Exchange suspended
Second General Meeting 11.00 a.m. on 2 May
Liquidators appointed and commencement of liquidation 2 May
Effective Date for implementation of the Scheme 2 May
Contract notes in respect of Jupiter European Fund 2 May (or as soon as
Units issued under the Scheme despatched to practicable thereafter)
Shareholders entitled thereto***
Cheques despatched and CREST accounts credited in expected to be by 11 May
respect of cash elections under the Scheme (or as soon as
practicable thereafter)
Cancellation of listing of the Reclassified Shares and 8.00 a.m. on or after 1
Subscription Shares on the Official List June
* For the avoidance of doubt, the Register will remain open until the Effective
Date.
** The Reclassified Shares are a technical requirement of the Scheme. Shares
will be reclassified if the Scheme Resolution to be proposed at the First
General Meeting is passed and becomes effective. Shares will be reclassified
according to the Scheme Elections made (or deemed to have been made) by
Shareholders.
*** Shareholders electing (or who are deemed to elect) to receive Jupiter
European Fund Units may be required to supply evidence of identity for
anti-money laundering purposes. The administrator of the Jupiter European Fund
will write to holders of Jupiter European Fund Units following the Effective
Date if evidence of their identity is required.
Each of the times and dates in the expected timetable may be extended or
brought forward without further notice. If any of the above times and/or dates
change, the revised time(s) and/or date(s) will be notified to Shareholders and
Subscription Shareholders by an announcement through a Regulatory Information
Service provider.
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
Enquiries
William Simmonds 020 7588 2828
J.P. Morgan Cazenove
J.P. Morgan Cazenove, which is authorised and regulated in the United Kingdom
by the Financial Services Authority, is acting for SR Europe Investment Trust
plc and for no one else, including any recipient of the Circular, in connection
with the Proposals and will not be responsible to anyone other than SR Europe
Investment Trust plc for providing the protections afforded to clients of J.P.
Morgan Cazenove or for providing advice in relation to the Proposals or any
other matter referred to therein.
END
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