TIDMABNY
RNS Number : 6214H
Albany Investment Trust PLC
13 July 2012
13 July 2012
Albany Investment Trust plc (the "Company")
Proposals for the voluntary winding-up and reconstruction of the
Company
On 12 June 2012, the Company announced it had undertaken a
review of the options available in respect of the future of the
Company and that it intended to put forward proposals to offer
Shareholders the choice of (a) rolling over their investment in the
Company, without triggering a charge to capital gains tax, into
Troy Income & Growth Trust plc ("TIGT"), or (b) realising all
or part of their investment for cash. The Board is pleased to
announce that a circular relating to the Proposals is being sent to
Shareholders today (the "Circular").
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 and the Listing Rules. If the
Scheme is implemented, Shareholder approval is required at the
Second General Meeting to wind up the Company voluntarily and to
appoint and grant authority to the Liquidators pursuant to the
Insolvency Act 1986 and to approve the cancellation of the listing
of the Shares on the Official List pursuant to the Listing
Rules.
The notices of the General Meetings are set out at in 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 Directors propose that the Company should pay
an interim dividend of 5 pence per Share in respect of the period
ending 19 August 2012 to Shareholders on the Register at 6:00 p.m.
on 27 July 2012. This dividend will be paid prior to, and is not
dependent on, the implementation of the Proposals. The Record Date
for the Interim Dividend is 27 July 2012 and the Shares will go ex
dividend on 25 July 2012.
Background to the Proposals
The Company's current investment objective is to deliver
carefully managed medium-to-long-term capital and income growth for
investors. The Directors believe that the approach of focusing on
companies capable of generating significant growth combined with a
stable and rising level of income is what the overwhelming majority
of shareholders are seeking.
The Board has been concerned for some time over the persistent
discount to net asset value ("NAV") at which the Company's Shares
trade. Against this background, the Board has undertaken a thorough
review of the Company's management arrangements. Having conducted
an extensive evaluation of options available to the Company, it is
the Directors' firm belief that the best way forward would be to
merge the assets of the Company with those of TIGT, an existing
investment trust with an investment objective closely aligned with
the Company's, enabling Shareholders to continue their investment
exposure to quoted UK companies. Such a transaction would, in
tandem with TIGT's proven discount control mechanism, create a
larger and more liquid company with shareholders experiencing a
broadly similar dividend yield and a lower total expense ratio than
that currently offered by Albany.
The Proposals
Under the Proposals, the Company will be wound up voluntarily
and a scheme of reconstruction under section 110 of the Insolvency
Act 1986 put in place, under which Shareholders (other than
Overseas Shareholders) may elect to:
-- roll over all or part of their investment in the Company into
shares in TIGT (the "Rollover Option"); and/or
-- realise all or part of their investment in the Company for
cash following realisation by the Investment Manager of the
underlying investments (the "Cash Option").
Shareholders can make different Elections in respect of
different parts of their holdings. Overseas Shareholders will be
deemed to have elected for the Cash Option in respect of their
entire holding of Shares.
Assuming the Proposals are approved by Shareholders, the Company
will be placed into voluntary liquidation on 20 August 2012.
Benefits of the Proposals
The Directors believe that the Proposals will provide the
following benefits for Shareholders:
- the Proposals offer all Shareholders greater choice by giving
the opportunity of continuing their investment exposure in a
vehicle with a similar investment mandate without triggering a
charge to capital gains tax, offering a similar dividend yield and
lower total expense ratio than that currently offered by the
Company;
- Shareholders electing to receive shares in TIGT in respect of
their entitlements in the liquidation should expect to receive at
least 99.43 per cent. of NAV in market value (or 301.64 pence per
Share), or at least 98.33 per cent. of NAV (or 298.29 pence per
Share) if electing for cash in respect of their entitlements in the
liquidation (both on the basis of a cum income NAV per Share in the
Company of 303.36 pence on 29 June 2012) as more fully described
below in the section entitled "Illustrative financial effects of
the Proposals";
- the Proposals offer all Shareholders the option to elect in
full for cash at close to NAV, which will be satisfied through a
realisation of the portfolio;
- those Shareholders electing for the Rollover Option will
benefit from active share price discount mitigation due to the
operation of TIGT's discount and premium control policy which seeks
to ensure that its shares trade at close to net asset value through
a combination of share buy-backs coupled with the issue of new
shares at a small premium to net asset value where demand exceeds
supply; and
- those Shareholders electing for the Rollover Option will also
benefit from the Cash Contribution offered by the Rollover Manager
which will be allocated to the Rollover Pool and which will be an
amount equivalent to an estimated three months' worth of management
fees on the value of the portfolio that is transferred to TIGT.
Illustrative financial effects of the Proposals
As at 11 June 2012, the day prior to the announcement of the
Proposals, the Company's share price was 240p, representing a
discount to the NAV as at that date of 21.3%. On 29 June 2012, the
latest practicable date prior to the publication of this Circular,
the Company's share price was 281p, representing a discount to NAV
as at that date of 7.6%.
Had the Scheme been implemented on 29 June 2012 (the latest
practicable date before the publication of the Circular) on the
basis of a NAV per Share at that date of 303.36p and a TIGT FAV per
share at that date of 54.32p and assuming (for illustrative
purposes only) that: (i) the holders of 75 per cent. of the Shares
in issue elect for the Rollover Option and the remaining
Shareholders elect for the Cash Option; and (ii) the costs of the
Scheme payable by the Company total GBP508,000 (which exclude any
portfolio reorganisation costs and exclude a Liquidators' retention
of GBP50,000), a holder of 1,000 Shares who elects for the Rollover
Option would receive 5,447 TIGT Shares (with an aggregate NAV of
GBP2,959 and an aggregate market value of GBP3,016) and a holder of
1,000 Shares who elects for the Cash Option would receive
GBP2,982.
It should be emphasised that the figures above are given for
illustrative purposes only and should not be regarded as a forecast
of any of the metrics referenced, all of which will be calculated
as at the Calculation Date.
The choice between the options available under the Proposals
will be a matter for each Shareholder to decide and will be
influenced by his or her investment objectives and by his or her
personal, financial and tax circumstances. Accordingly,
Shareholders should, before making any Election, read carefully all
the information in the Circular and in the TIGT Prospectus.
Further details of the Proposals
Mechanics of the Scheme
The Directors intend that the Company should remain fully
invested until the First General Meeting, by which time
Shareholders' Elections will be known. The portfolio will then be
re-designed, having regard to the extent of the Elections for TIGT
Shares, so as largely to comprise securities which TIGT has
indicated that it wishes to receive which are in line with TIGT's
investment objective and policy. The Board estimates that
approximately 35 per cent. of the Company's portfolio mirrors that
of TIGT. Accordingly, it is not expected that significant
realignment will be required.
Following the Calculation Date, the Company will divide its
assets (comprising cash and securities) into three distinct pools:
the Liquidation Pool, the Cash Pool and the Rollover Pool. The
Company will set aside cash and other assets in the Liquidation
Pool in an amount which it considers sufficient to provide for all
current and future, actual and contingent liabilities of the
Company, including a retention (estimated at GBP50,000) in respect
of unascertained and unknown liabilities. The division of assets as
between the Rollover Pool and the Cash Pool will be on the basis of
the value attributable to Elections for the Rollover Option and the
Cash Option respectively.
The Company holds one illiquid unquoted holding in Tennants
Consolidated Limited which is currently valued at GBP80,000. This
will be attributed with nil value for the purposes of calculating
the Albany FAV and will be allocated to the Liquidation Pool. The
proceeds arising from the sale of this investment will be
distributed to all Shareholders as a Liquidation Distribution
immediately prior to the closure of the liquidation.
On the Effective Date, or as soon as possible thereafter, the
Liquidators will distribute the value of the Cash Pool to
Shareholders who have elected for the Cash Option and will transfer
the Rollover Pool to TIGT in exchange for TIGT Shares which will be
issued to the Liquidators and renounced in favour of the
Shareholders who have elected for the Rollover Option. The Transfer
of the Rollover Pool will be carried out in accordance with the
terms of the Transfer Agreement, further details of which are set
out in the Circular.
Overseas Holders
Overseas Holders who wish to receive the Rollover Option in
respect of their entitlement under the Scheme should contact the
Company directly if they are able to demonstrate, to the
satisfaction of the Directors and the TIGT Directors, that they can
be issued TIGT Shares without breaching any relevant securities
laws. Overseas Holders will otherwise be deemed to have elected for
cash in respect of their entire holding of Shares. Overseas Holders
should refer to the Circular for further details.
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. TIGT Shares are eligible for inclusion within a SIPP
or the stocks and shares component of an ISA. Accordingly, where
Shares are held within a SIPP or an ISA, any TIGT Shares obtained
pursuant to the Scheme in respect of those Shares can be retained,
subject to the specific terms applicable to the relevant SIPP or
ISA
Costs of the Proposals
The Company and TIGT have agreed to each bear their own costs in
relation to the Proposals. The fixed costs payable by the Company
are expected to be approximately GBP508,000. These costs will be
reflected in the Albany FAV and borne by all Shareholders through
the Liquidation Pool. This estimate of costs excludes the
Liquidators' retention (estimated at GBP50,000) and does not take
account of any dealing costs which will be incurred by the Company
in disposing of assets in order to meet Elections made and in
redesigning the portfolio to meet the requirements of TIGT
(although TIGT has agreed to pay the Stamp Duty Costs on the
transfer of the Rollover Pool). The cash and assets to meet such
costs will be appropriated to the Liquidation Pool. These costs, to
the extent that they have not been paid or accrued for, will be
deducted from the net assets of the Company when calculating the
Albany FAV.
Shareholders who elect for the Rollover Option will benefit from
the Cash Contribution from the Rollover Manager which will be
equivalent to an estimated three months' worth of management fees
on the value of the portfolio that is transferred to TIGT. The Cash
Contribution has been offered to reduce the costs of the Proposals
for those Shareholders who elect for the Rollover Option.
Proposed interim dividends
The Directors propose that the Company should pay an interim
dividend of 5 pence per Share in respect of the period ending 19
August 2012 to Shareholders on the Register at 6:00 p.m. on 27 July
2012. This dividend will be paid prior to, and is not dependent on,
the implementation of the Proposals. The Record Date for the
Interim Dividend is 27 July 2012 and the Shares will go ex dividend
on 25 July 2012.
TIGT has declared an interim dividend in respect of the quarter
ended 30 June 2012 of 0.5p per TIGT Share which is expected to be
paid on 27 July 2012. TIGT also expects to declare a further
interim dividend in respect of the period ended 20 August 2012
which is expected to be paid in October 2012. TIGT Shares issued to
Shareholders electing for the Rollover Option will not carry an
entitlement to receive these interim dividends but will rank
equally with the existing TIGT Shares for future dividends. In
particular the TIGT Directors expect to declare a fifth interim
dividend for the period from 21 August 2012 to 30 September 2012
which is also expected to be paid in October 2012 which
Shareholders electing for the Rollover Option will be entitled to
receive. It is the TIGT Directors' intention, barring unforeseen
circumstances, that the aggregate amount of the fourth and fifth
interim dividends will be 0.525p per TIGT Share.
Expected Timetable
2012
----------------------------------------------------- -----------------------
Ex dividend date for the Interim Dividend 25 July
----------------------------------------------------- -----------------------
Record date for the Interim Dividend 12:30 p.m. on 27
July
----------------------------------------------------- -----------------------
Time and date from which it is advised that 8:00 a.m. on 3 August
dealings in Shares
should only be for cash settlement and immediate
delivery of
documents of title
----------------------------------------------------- -----------------------
Payment of the Interim Dividend 7 August
----------------------------------------------------- -----------------------
Latest time and date for receipt of blue Forms 12:30 p.m. on 7 August
of Proxy for the
First General Meeting
----------------------------------------------------- -----------------------
Latest time and date for receipt of Forms of 1:00 p.m. on 7 August
Election or TTE
instructions from Shareholders
----------------------------------------------------- -----------------------
Record Date for the Scheme(1) 6:00 p.m. on 7 August
----------------------------------------------------- -----------------------
First General Meeting 12:30 p.m. on 9 August
----------------------------------------------------- -----------------------
Latest time and date for receipt of pink Forms 12:30 p.m. on 16
of Proxy for the August
Second General Meeting
----------------------------------------------------- -----------------------
Calculation Date close of business
on 16 August
----------------------------------------------------- -----------------------
Amendment to the Official List and dealings 8:00 a.m. on 17 August
in Reclassified
Shares commence on the London Stock Exchange(2)
----------------------------------------------------- -----------------------
Last day for registration of transfers in the 17 August
Register
----------------------------------------------------- -----------------------
Dealings in Reclassified Shares suspended 7:30 a.m. on 20 August
----------------------------------------------------- -----------------------
Second General Meeting 12:30 p.m. on 20
August
----------------------------------------------------- -----------------------
Effective Date for implementation of the Proposals 20 August
and
commencement of the liquidation of the Company
----------------------------------------------------- -----------------------
Admission to listing of the TIGT Shares issued 8:00 a.m. on 21 August
pursuant to
the Scheme
----------------------------------------------------- -----------------------
TIGT Shares issued in uncertificated form pursuant 21 August
to the
Scheme credited to CREST accounts of Shareholders
entitled thereto
----------------------------------------------------- -----------------------
CREST payments made in respect of cash entitlements week ending 24 August
----------------------------------------------------- -----------------------
Cheques despatched to Shareholders in respect week ending 24 August
of cash entitlements
----------------------------------------------------- -----------------------
Definitive certificates in respect of TIGT week commencing 27
Shares issued in August
certificated form pursuant to the Scheme despatched
to Shareholders
entitled thereto
----------------------------------------------------- -----------------------
Cancellation of listing of the Reclassified 8.00 a.m. on or after
Shares 19 September
----------------------------------------------------- -----------------------
1 Reclassified Shares are a technical requirement of the Scheme
and will be created if the Scheme Resolution to be proposed at the
First General Meeting is passed and becomes effective.
Each of the times and dates in the above expected timetable
(other than in relation to the General Meetings) may be extended or
brought forward in which case details of the revised time(s) and/or
date(s) will be notified to Shareholders by an announcement through
a Regulatory Information Service provider. Save where otherwise
provided, all references to times in this announcement are to
London times.
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 7742 4000
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
Albany 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 Albany 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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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Albany (LSE:ABNY)
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