Publication of Prospectus re C Share Issue

RNS Number : 9499V

Aberdeen Latin American Inc Fd Ltd

20 January 2012

 



NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, TO US PERSONS OR IN, INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, NEW ZEALAND OR THE REPUBLIC OF SOUTH AFRICA.

This announcement is an advertisement and not a prospectus.  This announcement does not constitute or form part of, and should not be construed as, any offer for sale or subscription of, or solicitation of any offer to buy or subscribe for, any securities in Aberdeen Latin American Income Fund Limited (the "Company") or securities in any other entity, in any jurisdiction, including the United States, nor shall it, or any part of it, or the fact of its distribution, form the basis of, or be relied on in connection with, any contract or investment decision whatsoever, in any jurisdiction.  This announcement does not constitute a recommendation regarding any securities.  Any investment decision must be made exclusively on the basis of the Prospectus published by the Company and any supplement thereto.

20 January 2012

ABERDEEN LATIN AMERICAN INCOME FUND LIMITED

PLACING AND OFFER FOR SUBSCRIPTION OF C SHARES

Introduction

The Directors are pleased to announce that the Company intends to raise up to £20.0 million, by way of a non-pre-emptive placing and offer for subscription of up to 20,000,000 C Shares at an issue price of 100p per C Share.  Prior to this announcement,  15 million C Shares had been conditionally placed by Canaccord Genuity at 100p per C Share pursuant to the Placing with certain institutional investors, private client fund managers and private client brokers.

Applications will be made to the UK Listing Authority for the C Shares issued pursuant to the Placing and Public Offer to be admitted to the premium segment of the Official List and to the London Stock Exchange for such C Shares to be admitted to trading on its Main Market.  It is expected that Admission will occur, and that dealings in the C Shares will commence, on Friday, 3 February 2012. 

Background to, and Benefits of, the Issue

Since the Company was launched on 16 August 2010:

·           the Company has satisfied its aim of providing Ordinary Shareholders with an initial yield of 4.25% on the original issue price of 100p per Ordinary Share, with dividends paid in respect of its first financial year covered 1.13 times by earnings; and

·           the Ordinary Shares have traded at an average premium of 3.5% (source: Datastream, 16 August 2010 to 18 January 2012).

The Directors believe that, notwithstanding recent market volatility, the longer term outlook for investment in Latin America remains positive.  Having consulted with a range of existing and prospective new investors in the Company, the Directors have concluded that there is an opportunity to grow the size of the Company substantially through an issue of C Shares.  The Directors believe that such an issue will have the following principal benefits:

·           the increase in the number of Ordinary Shares in issue following Conversion should enhance secondary market liquidity in the Ordinary Shares as a result of a larger and more diversified Ordinary Shareholder base;

·           the increase in the market capitalisation of the Ordinary Shares on Conversion should help to make the Company more attractive to a wider investor base;

·           the Company's fixed running costs will be spread across a wider capital base, thereby reducing its total expense ratio per Ordinary Share; and

·           as no Subscription Shares will be issued in conjunction with the Issue, the dilutive effect of the existing Subscription Shares on the NAV per Ordinary Share once that NAV exceeds 120p (being the exercise price of a Subscription Share) will be reduced as the ratio of Ordinary Shares to Subscription Shares will be increased on the conversion of C Shares.

The Directors believe that there are additional benefits for Ordinary Shareholders of raising substantial new capital through an issue of C Shares rather than a further issue of Ordinary Shares for cash as the assets representing the Net Issue Proceeds will be maintained, managed and accounted for as a separate pool of capital of the Company until substantially all of the assets representing the Net Issue Proceeds have been invested in accordance with the Company's existing investment policy.  In particular:

·           the use of C Shares will ensure that the NAV of the existing Ordinary Shares will not be diluted by the Issue Costs or the costs of investing the Net Issue Proceeds;

·           existing Ordinary Shareholders will not be exposed to the effects of the Company holding a substantial amount of net cash raised pursuant to the Issue pending its investment;

·           the existence of the C Shares will have no impact on the income profits attributable to the Ordinary Shares whilst the Net Issue Proceeds are being invested and, accordingly, there will be no negative impact on the dividends paid on the Ordinary Shares as a result of the Issue; and

·           once substantially all of the Net Issue Proceeds have been invested, the C Shares will convert into Ordinary Shares on a NAV to NAV basis and, as a result, the NAV of the Ordinary Shares will not be diluted by conversion of the C Shares.

Conditions of the Issue

The Issue, which has not been underwritten, is conditional on (among other things):

·           not less than 15,000,000 C Shares being issued, at the Issue Price, under the Placing and Public Offer;

·           the Placing and Offer Agreement becoming unconditional and not being terminated in accordance with its terms at any time prior to Admission; and

·           Admission occurring by 8.00 a.m. on Friday, 3 February 2012 (or such later date as the Company, the Investment Manager and Canaccord Genuity may agree, being in any event not later than Friday, 17 February 2012).

Expected Timetable

2012

Placing and Public Offer open                                                                                                     Friday, 20 January

Record date for participation in Placing and Public Offer
by Shareholders on priority basis                                                                        5.00 p.m. on Friday, 20 January

Latest time and date for receipt of applications under
the Public Offer                                                                                                      3.00 p.m. on Friday, 27 January

Latest time and date for receipt of commitments
under the Placing                                                                                                12 noon on Tuesday, 31 January

Result of Placing and Public Offer announced                                                               Wednesday, 1 February

Admission of C Shares to premium segment of Official List
and to trading on London Stock Exchange's Main Market                             8.00 a.m. on Friday, 3 February

CREST stock accounts in respect of C Shares
issued in uncertificated form credited                                                                                        Friday, 3 February

Share certificates in respect of C Shares
issued in certificated form despatched                                              Week commencing Monday, 6 February

Prospectus

The prospectus relating to the Company prepared in accordance with the Prospectus Rules in connection with the Issue and the applications for Admission (the "Prospectus") has been submitted to the National Storage Mechanism and will shortly be available for inspection at: www.hemscott.com/nsm.do.  

The Prospectus will also shortly be available at www.latamincome.co.uk.  

Copies of the Prospectus may be collected, free of charge, during normal business hours up to Friday, 3 February 2012 from the Company's registered office at No. 1 Seaton Place, St Helier, Jersey JE4 8YJ, and from Aberdeen Asset Managers Limited, Bow Bells House, 1 Bread Street, London EC4M 9HH.  Alternatively, copies of the Prospectus can be requested by calling 0500 00 00 40 before the Public Offer closes.

Shareholder Circular

The Prospectus is not being posted to Shareholders.  However, the Company is posting a circular to Shareholders today advising them of the Placing and Offer for Subscription.  A copy of that circular has been submitted to the National Storage Mechanism and will shortly be available for inspection at: www.hemscott.com/nsm.do.

Enquiries

Chris Whittingslow/Sue Inglis	Canaccord Genuity Limited	020 7050 6528/ 020 7050 6779
Gary Jones	Aberdeen Asset Managers Limited	020 7463 6295

Notes

Canaccord Genuity Limited is acting for Aberdeen Latin American Income Fund Limited and no one else in connection with the matters referred to in this announcement and will not be responsible to anyone other than Aberdeen Latin American Income Fund Limited for providing the protections afforded to clients of Canaccord Genuity Limited or for providing advice in relation to the matters referred to in this announcement.

This announcement does not constitute or form part of any offer or invitation to sell, or any solicitation of any offer to purchase, any shares offered by the Company.  Any decision to apply for C shares pursuant to the Placing or Offer for Subscription should be made only on the basis of the information contained in the Prospectus.

Words and expressions defined in the Prospectus have the same meanings when used in this announcement.

Neither the National Storage Mechanism website nor the Company's website nor the content of any website accessible from hyperlinks on those websites (or any other website) is (or is deemed to be) incorporated into, or forms (or is deemed to form) part of this announcement.

 

END

 

 

PDIBUGDBBSDBGDG