THG Thg Plc

RNS Number:2289P
Terrace Hill Group PLC
22 July 2005


                             Terrace Hill Group plc
                       Britannic Global Income Trust PLC


Undernoted below for information purposes is a copy of an announcement released
today by Britannic Global Income Trust PLC in relation to a transaction entered
into with Second Terrace Hill Investing Limited and Second Park Circus Investing
Limited, two companies which have Terrace Hill Group plc as their ultimate
parent company.

END



Undernote:


                       BRITANNIC GLOBAL INCOME TRUST PLC

                     PROPOSALS FOR A SCHEME OF ARRANGEMENT
                  UNDER SECTION 425 OF THE COMPANIES ACT 1985
     PROPOSALS FOR THE WINDING UP OF BRITANNIC GLOBAL INCOME SECURITIES PLC

1. Summary

The Board of Britannic Global Income Trust plc (the "Company") announces that
agreement has been reached on the terms of a proposed scheme of arrangement
under section 425 of the Companies Act 1985 (the "Scheme") under which both
Ordinary and ZDP shareholders should achieve an improvement in the value of
their shares by comparison to a winding up of the Company and its subsidiary,
Britannic Global Income Securities plc ("BGIS"). The Scheme is subject to the
conditions set out in Appendix I.

These proposals (the "Proposals") value the Ordinary shares of the Company at
0.5 pence each (approximately #360,000 in aggregate), whereas on a winding up of
the Company the Ordinary shares would be worthless.

The Board estimates that if the proposals are implemented ZDP shareholders will
achieve a return of 14.6 pence per share, compared with a return of 11.4 pence
per share on a winding up - a 28 % increase in assets attributable to ZDP
shareholders.

The Scheme is expected to be completed on or around 7 October 2005 and payments
to Ordinary shareholders are expected to made shortly thereafter. ZDP
shareholders will receive their payments following the winding up of BGIS which
will begin on 30 November 2005.

Your board is aware that many Ordinary shareholders have incurred very
substantial losses on their investment in the Company and that the Proposals
will only result in relatively small payments. However, on the basis of the
current financial position of the Company, the directors do not consider that
there is any realistic prospect that any funds would be available for a
distribution to Ordinary shareholders in any subsequent liquidation of the
Company. Against this background, the directors believe that the Scheme offers
Ordinary shareholders an opportunity to realise some value from their shares
where otherwise there would be none.

Under the Proposals (i) Second Terrace Hill Investing Limited and Second Park
Circus Investing Limited (together the "Purchasers") will acquire the entire
issued share capital of the Company and provide cash to enable the Company to
pay or compromise, as appropriate, the claims of its creditors ("Scheme
Creditors") and (ii) the Company will assign to its subsidiary BGIS, rights to
certain compensation/ claims potentially payable to/ in favour of the Company.
The Proposals to Scheme Creditors involves the distribution of the assets of the
Company represented by cash on the Effective Date (net of expenses - "Scheme
Expenses") in order, as appropriate, to pay in full or to compromise the claims
of the Company's creditors. As part of the arrangements, the Purchasers have
agreed to increase the assets of the Company represented by cash available for
distribution to its creditors under the Scheme by making a capital contribution
of approximately #770,000 (from which the estimated Scheme Expenses of #407,000
will be deducted on the Effective Date) plus an amount equal to the mid-market
value of the Company's portfolio of investment companies at the Effective Date
which will be paid in cash on or before the Effective Date.

The proposed Purchasers of the Company are two UK resident companies. Further
information on the Purchasers is set out in Appendix II of this announcement.

The Board, who have been so advised by Ernst & Young LLP, consider the terms of
the Proposals to Shareholders to be fair and reasonable and recommend that
Shareholders vote in favour of the Scheme. The directors also consider the terms
of the Proposals to the unsecured creditors to be fair and reasonable and
recommend that they vote in favour of the Scheme.

2. Proposals

The Proposals are to be implemented by way of the Scheme. The Scheme is subject
to the conditions set out in Appendix I of this announcement.

If the Scheme becomes effective all of the Ordinary shares will be transferred
to the Purchasers and Ordinary shareholders will receive from the Purchasers for
each Ordinary share 0.50 pence in cash.

Ordinary shareholders (other than Overseas Shareholders) may alternatively elect
to receive Loan Notes instead of all or part of the cash consideration to which
they would otherwise be entitled on the basis set out in paragraph 3 below.

If the Scheme becomes effective, arrangements will be implemented through the
Scheme by means of which the assets of the Company represented by cash at the
Effective Date net of the Scheme expenses will be distributed to the Scheme
Creditors to pay or compromise, as appropriate, their claims against the
Company. As part of the arrangements, the Purchasers have agreed to increase the
assets of the Company represented by cash available for distribution to its
creditors under the Scheme by making a capital contribution (the "Capital
Contribution") of approximately #770,000 (from which the Scheme Expenses will be
deducted on the Effective Date) plus an amount equal to the mid-market value of
the Company's portfolio of investment companies at the Effective Date which will
be paid in cash to the Company on or before the Effective Date. It is estimated
that the assets of the Company represented by cash as at the Effective Date
including the Capital Contribution and net of Scheme Expenses and after
repayment of the Bank Debt will be approximately #2.8 million.

Subject to the Scheme becoming effective, the Company has also agreed as part of
the Scheme to assign to BGIS the rights to certain compensation/claims
potentially payable to/in favour of the Company.

It is estimated that Scheme Expenses will be #407,000 (including irrecoverable
VAT). If the Scheme does not become effective, Scheme Expenses are expected to
be approximately #60,000 (including irrecoverable VAT) although Terrace Hill has
agreed to make a contribution (the "Cost Contribution") of #60,000 towards the
Scheme Expenses if the Scheme does not become effective for any reason other
than a failure to secure the required levels of support from shareholders and
creditors. If the Scheme becomes effective then the Cost Contribution will be
treated as part of the Capital Contribution.

If the Scheme becomes effective, cheques in respect of the cash consideration
due for the Scheme Shares and definitive certificates for any Loan Notes to
which Shareholders are entitled will be despatched not later than 14 days after
the date when the Scheme becomes effective (the "Effective Date").
The Effective Date is expected to be on or around 7 October 2005.

3 The Loan Note Alternative

As an alternative to all or part of the cash consideration which would otherwise
be receivable by them under the Scheme, Ordinary shareholders (other than
Overseas Shareholders) are entitled to elect to receive Loan Notes to be issued
by one or both of the Purchasers (to be decided at their sole discretion) on the
following basis:

For 0.50 pence of cash consideration under the Scheme, 0.50 pence nominal value
of Loan Notes.

The Loan Note Alternative is conditional on the Scheme becoming effective in all
respects.

No Overseas Shareholder may elect for the Loan Note Alternative.

A Noteholder shall have the right to require all or any part (being 1 penny
nominal value or any multiple thereof) of his holding of Loan Notes to be repaid
in accordance with the terms of the Loan Note Instrument on 31 December 2005 and
/or any 30 June or 31 December falling thereafter. Any Loan Notes not previously
repaid will be redeemed on 30 June 2012.

Shareholders should be aware that the Loan Notes will not bear interest, will
not be guaranteed and will not be transferable. The redemption price of the Loan
Notes is calculated by reference to the quoted mid market price of a United
Utilities PLC ordinary share and therefore the redemption price of the Loan
Notes may well go down as well as up depending on the performance of United
Utilities PLC shares.

4. Background to the board's recommendations

The Company was incorporated on 30 November 2000. In December 2000, the Company
allotted 71.25 million Ordinary Shares and BGIS allotted 18.75 million ZDP
Shares at a subscription price of 100 pence per share pursuant to placings made
at that time.

The Company was established as a split capital investment trust and invested in
other UK investment trusts with the objective of providing Shareholders with a
high level of income together with the potential for income and capital growth.
The objective of BGIS was to provide ZDP Shareholders with a predetermined final
capital entitlement.

The Company is geared by way of unsecured bank debt and a loan note issued to
BGIS. It is proposed that the Company will repay the bank debt in full prior to
the Effective Date.

The management of the Company's investments is contracted out to Britannic
Investment Managers Limited (the "Manager").

The Company first breached its banking covenants in 2002 as a consequence of a
sharp decline in the value of the Company's assets. Since that time, it has been
necessary to sell most of the Company's assets.

Dealings in the Ordinary and the ZDP shares on the London Stock Exchange were
suspended on 25 July, and the suspension was lifted on 17 March 2005.

The Company has significant capital losses and the board has been working with
advisers with the objective of realising some value in respect of those losses
for the Company. The Purchasers consider that over time it may be possible to
utilise certain of these capital losses and are therefore seeking to acquire
control of the Company and its losses.

5. Assignation of rights to certain compensation/ claims potentially payable to/
in favour of the Company

As one of the arrangements by means of which the claims of BGIS against the
Company will be paid or compromised under the Scheme, it is proposed that the
Company and BGIS will enter the Assignation under which with effect from the
Effective Date the Company will assign to BGIS the following:

(a) the right to the claim to be advanced in Court proceedings to be raised by
the Company against the Manager for repayment of approximately #240,000 of value
added tax that has been paid by the Company on investment management fees it has
paid to the Manager in respect of the management of the Group's portfolio of
investments;

(b) the right to make any claim competent to the Company against the Manager,
any other member of the Manager's group or any third party in connection with
matters of the type investigated by the FSA or Treasury Select Committee as part
of their investigation into the split capital trust sector; and,

(c) the right to receive any compensation paid to the Company in connection with
matters of the type investigated by the FSA or Treasury Select Committee as part
of their investigation into the split capital trust sector.

There is no guarantee that the Company will obtain compensation in respect of
any of these matters.

6. General

A circular setting out details of the Scheme will be posted to Ordinary and ZDP
shareholders as soon as it is practicable and subject to the Company obtaining
an order of the Court convening the meetings of Ordinary shareholders and
creditors. Recipients of the circular are advised to read the circular setting
out details of the Scheme and, as appropriate, to seek independent financial
advice.

The availability of the Scheme to persons not resident in the United Kingdom may
be affected by laws of the relevant jurisdictions. Overseas Shareholders should
inform themselves about and observe any applicable legal or regulatory
requirements. This announcement does not constitute an offer or an invitation to
offer to purchase any securities.

7. Dealing disclosure requirements

Under the provisions of Rule 8.3 of the City Code on Takeovers and Mergers (the
"City Code"), any person who, alone or acting together with any other person(s)
pursuant to an agreement or understanding (whether formal or informal) to
acquire or control relevant securities of Britannic Global Income Trust plc,
owns or controls, or becomes the owner or controller, directly or indirectly, of
one per cent. or more of any class of securities of Britannic Global Income
Trust plc is required to disclose, by not later than 12.00 noon (London time) on
the London business day following the date of the relevant transaction, dealings
in such securities of that company (or in any option in respect of, or
derivative referenced to, any such securities) during the period to the
Effective Date of the Scheme or, if earlier, the date on which the Scheme lapses
or is otherwise withdrawn.

Under the provisions of Rule 8.1 of the City Code, all dealings in relevant
securities of Britannic Global Income Trust plc by Second Terrace Hill Investing
Limited or Second Park Circus Investing Limited or Britannic Global Income Trust
plc, or by any of their respective "associates" (within the meaning of the City
Code) must also be disclosed.

If you are in any doubt as to the application of Rule 8 to you, please contact
an independent financial advisor authorised under the Financial Services and
Markets Act 2000, consult the Panel's website at www.thetakeoverpanel.org.uk or
contact the Panel on telephone number +44 20 7638 0129; fax +44 20 7236 7013.

For further information contact:
Ernst & Young LLP
Peter Ames 020 7951 4315
Lough Callahan 020 7951 1561

The Directors of the Company accept responsibility for the information contained
in this announcement other than the information relating to the Purchasers, the
directors of the Purchasers and Terrace Hill Group PLC, including, without
limitation, the information set out in Appendix II of this announcement.

The directors of the Purchasers accept responsibility for the information
contained in this announcement relating to the Purchasers, the directors of the
Purchasers and Terrace Hill Group PLC including, without limitation, the
information set out in Appendix II of this announcement.

To the best of the knowledge and belief of the Directors of the Company and the
directors of the Purchasers (who have all taken reasonable care to ensure that
such is the case) the information contained herein for which they respectively
take responsibility is in accordance with the facts and does not omit anything
likely to affect the import of such information.

Ernst & Young LLP, which is authorised and regulated in the United Kingdom by
the Financial Services Authority, is acting exclusively for Britannic Global
Income Trust plc in connection with the Proposals to Shareholders and will not
be responsible to anyone other than Britannic Global Income Trust plc for
providing the protections afforded to clients of Ernst & Young LLP or for
providing advice in relation to the Proposals.

APPENDIX I
CONDITIONS TO THE SCHEME

1. The Proposals are conditional on the Scheme becoming unconditional and
becoming effective by not later than 25 November 2005 or such later date as the
Company, BGIS, the Purchasers, the Creditors Scheme Supervisor and the Court may
agree.

The Scheme is conditional upon:

(a) the approval of the Scheme by a majority in number representing
three-fourths in value of the Ordinary shareholders on the register of members
at the Voting Record Time present and voting, either in person or by proxy, at
the Ordinary shareholder meeting;

(b) the approval of the Scheme by a majority in number representing
three-fourths in value of the Ordinary Scheme Creditors present and voting,
either in person or by proxy, at the Scheme Creditors Meeting;

(c) the approval of the Scheme by a majority in number representing
three-fourths in value of the Subordinated Scheme Creditors present and voting,
either in person or by proxy, at the Subordinated Scheme Creditors Meeting;

(d) the approval of the implementation of the Proposals and any variation of the
rights of the ZDP Shareholders under the Articles of Association of BGIS
involved in the Scheme by a majority of not less than three-fourths of the ZDP
shareholders present and voting, either in person or by proxy, at the ZDP
shareholder meeting;

(e) the sanction of the Scheme by the Court (without modification save as agreed
by the Company and the Purchasers) and an office copy of the Court Order being
delivered to the Registrar of Companies in Scotland.

2. The Proposals are also conditional upon:

(a) there being no breach or termination of the Transaction Deed prior to the
Effective Date;

(b) between the date of this Announcement and the Effective Date, the Company
not having:
(i) issued or agreed to issue, or authorised or proposed the issue of,
additional shares of any class, or securities convertible into or exchangeable
for, or rights, warrants or options to subscribe for or acquire, any such shares
or convertible securities;
(ii) disposed of or having agreed to dispose of any shares in the capital of
BGIS; and
(iii) entered into any new or varied any existing contractual arrangements
(other than the Transaction Deed and engagement letters with the Company's
advisers retained for the purposes of the Scheme) with service providers which
are binding on the Company.

(c) between the date of this Announcement and the Effective Date, no change in
tax law or practice having occurred that would result in the Company's capital
losses not being available for offset against future chargeable gains which may
be realised by Terrace Hill Group PLC and its subsidiaries; and,

(d) no step being taken prior to the Effective Date by any Ordinary shareholder
or creditor of the Company to initiate a liquidation of the Company or a winding
up of the Company or to appoint an administrator, receiver or administrative
receiver to the Company or all or any of its assets.
The Purchasers reserve the right (but shall be under no obligation) to waive, in
whole or in part, all or any of the conditions set out in paragraph 2 above.

APPENDIX II
Information on the Purchasers

The Purchasers are Second Terrace Hill Investing Limited and Second Park Circus
Investing Limited.

Second Terrace Hill Investing Limited and Second Park Circus Investing Limited
were incorporated as private companies limited by guarantee with no share
capital under the Companies Act in Scotland on 7 June 2005. The registered
number of Second Terrace Hill Investing Limited is 285846 and Second Park Circus
Limited is 285847.

Siobhan M Robinson and Donald R Macdonald are the only directors of Second
Terrace Hill Investing Limited. The sole member of Second Terrace Hill Investing
Limited is Terrace Hill Group PLC.

Miranda A Kelly and Alistair B Wilson are the only directors of Second Park
Circus Investing Limited. The sole member of Second Park Circus Investing
Limited is Park Circus (Management) Limited, whose ultimate parent is Terrace
Hill Group PLC.

Since incorporation, neither of the Purchasers has traded or entered into any
material negotiations other than in connection with the Proposals and the
financing thereof.

The Purchasers have confirmed that neither of the Purchasers nor any party
connected with them nor any party acting in concert with them owns or controls
shares in the Company or its Subsidiary.

Terrace Hill Group PLC will on or before the Effective Date lend up to
approximately #3.4 million to the Purchasers by way of an unconditional interest
free unsecured loan for the purpose of funding the consideration payable by the
Purchasers to Ordinary shareholders under the Scheme and the other payments
payable by the Purchasers pursuant to the Proposals.


                      This information is provided by RNS
            The company news service from the London Stock Exchange
END

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