NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO THE UNITED STATES,
CANADA, NEW ZEALAND, AUSTRALIA OR JAPAN OR ANY OTHER JURISDICTION WHERE TO DO
SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION.
12 December 2011
Baring Emerging Europe PLC
(the "Company")
Proposed capital return and adjustment to discount control mechanism
Introduction
The board of the Company has consulted with its advisers and certain major
shareholders and proposes, subject to obtaining necessary shareholder approval,
to undertake a tender offer (the "Tender Offer") to facilitate a return of
capital in respect of up to 20% of the Company's shares in issue. In addition,
the board proposes a change to the Company's discount control mechanism such
that it will target an ongoing rating for the Company narrower than 10%.
Tender Offer
Under the Tender Offer, shareholders (other than certain excluded overseas
shareholders) will be entitled to tender up to 20% of their holdings for
repurchase by the Company. Shareholders may have the opportunity to tender
additional shares beyond this basic entitlement, subject to the level of
participation in the Tender Offer by other shareholders. The tender price will
be the equivalent of 97% of the Company's prevailing net asset value per share
("NAV"), which in the board's opinion reflects an equivalent value in current
markets close to that which would be achieved upon liquidation of the Company.
Adjustment to discount control mechanism
The board also proposes to adopt a policy of seeking to limit the price at
which the Company's shares trade to a level significantly lower than a 10%
discount to NAV by making purchases of its shares in the market from time to
time. This will be in place of the current policy of seeking to limit the price
to a level lower than a 12% discount.
This will be in addition to the existing policy that if the average closing
mid-market price at which the Company's shares trade in the market in the
period of ninety days prior to the publication of the Company's results each
year represents a discount to NAV which exceeds the target discount, the
Company will, subject to the conditions outlined below, make a tender offer
available to all shareholders to repurchase up to 15% of the outstanding issued
share capital of the Company at a price equivalent to 95% of NAV or greater
(after taking account of any expenses including the costs of selling
investments in order to fund the repurchase). Any shares repurchased will, at
the discretion of the Company, either be held in treasury and may be issued at
a later date at or above net asset value, or may otherwise be cancelled.
In order to implement this adjusted policy, the board intends to seek
shareholder authority at the Company's annual general meeting each year to
repurchase up to 15% of its issued share capital. The timing of any tender
offer to repurchase shares under the policy will be at the discretion of the
Company. The making of any offer will be conditional upon the Company having
the required shareholder authority or such shareholder authority being
obtained, the Company having sufficient distributable reserves to effect the
repurchase and, having regard to its continuing financial requirements,
sufficient cash reserves to settle the relevant transactions with shareholders,
and the Company's continuing compliance with the Listing Rules and all other
applicable laws and regulations. The Company may require a minimum level of
participation in any tender offer to be met, failing which the tender offer may
be declared void.
Expected timetable
Further details of the proposals for the Tender Offer will be contained in a
circular which will be sent to the Company's shareholders as soon as
practicable in order to convene the general meeting of shareholders necessary
to approve the implementation of the Tender Offer.
It is intended that the general meeting of shareholders will be convened on the
same day as the Company's annual general meeting.
The board believes that the proposals enable shareholders wishing to realise
all or part of their investment in the Company to do so at a price close to
realisable value whilst at the same time providing a NAV uplift for continuing
shareholders together with a more robust discount policy. Equally, it is the
view of the board that these proposals maintain the integrity of the investment
portfolio and allow flexibility for investment performance to improve in the
medium term.
Enquiries:
Steven Bates
Baring Emerging Europe PLC - 0207 982 1260
William Simmonds
J.P. Morgan Cazenove - 0207 588 2828
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