Proposed Fundraising

RNS Number : 1525U

J.P. Morgan Private Equity Ltd

18 June 2009

 



NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, 
IN WHOLE OR IN PART OR IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, NEW ZEALAND, SOUTH AFRICA OR ANY JURISDICTION WHERE TO DO WOULD CONSTITUTE A VIOLATION OF APPLICABLE LAWS IN SUCH JURISDICTION

18 June 2009

Regulatory News Service
London Stock Exchange
London
EC4M 7LS

J.P. Morgan Private Equity Limited (the 'Company') -Proposed Fundraising and Warrant Issue

Further to the announcement made by the Company on 15 June 2009, the Board has today published a prospectus and circular (the 'Circular') in respect of an Open Offer and an issue of Warrants by way of a Bonus Issue. Terms used in this announcement have the same meaning as set out in the Circular.

The Open Offer

The Board is seeking the approval, at two separate Meetings, of the US$ Equity Shareholders as a class and Shareholders as a whole, to make an Open Offer for up to 100 million  US$ Equity Shares ('Open Offer Share') at an Issue Price of US$1.00 per share. Pursuant to the Open Offer, US$ Equity Shareholders will be invited to subscribe for Open Offer Shares on the basis of 36 Open Offer Shares for every 100 US$ Equity Shares held as at 5.00 p.m. on 17 June 2009. Qualifying Open Offer Shareholders may apply for any whole number of Open Offer Shares in excess of, equal to or less than their Open Offer Entitlement and, in cases of excess applications, will be satisfied only to the extent that corresponding applications by other Qualifying Open Offer Shareholders are not made or are made for less than their Open Offer Entitlement. 

The Open Offer Shares will consist of 19,789,304 US$ Equity Shares that are currently held in treasury by the Company and the issue of 80,210,696 new US$ Equity Shares. Subscriptions made pursuant to the Open Offer will be satisfied by way of the issue of new US$ Equity Shares first and then the sale of US$ Equity Share held in treasury.

While up to 100 million Open Offer Shares are being offered, the Company anticipates that approximately 50 million Open Offer Shares will be issued and/or sold in connection with the Open Offer. The Open Offer is not conditional on a minimum number of Open Offer Shares be subscribed for by Qualifying Open Offer Shareholders.

US$ Equity Shareholders and Shareholders are also being asked, at the Meetings, to grant an authority to the Company that will allow it to issue and/or sell (as applicable) any of the Open Offer Shares not subscribed for pursuant to the Open Offer at a discount to the prevailing Net Asset Value per US$ Equity Share. The authority, subject to all applicable laws and regulations, will allow the Company to issue and/or sell the remaining Open Offer Shares at a discount to the prevailing Net Asset Value per US$ Equity Share provided that such discount is not greater than an amount equal to 30 per cent. of the prevailing Net Asset Value per US$ Equity Share as at the date the offer to issue and/or sell is made. The authority will, if approved by US$ Equity Shareholders and Shareholders as a whole at the requisite Meetings, expire on 31 December 2009.

The Directors believe that, should the Open Offer and any subsequent sale and/or issue of the remaining Open Offer Shares prove successful, the authority to conduct such sales at a discount to the prevailing NAV per US$ Equity Share will provide the Company with a clear competitive advantage when compared to its peer group. The Directors believe that additional capital raised through the Open Offer and any subsequent sale and/or issue of the remaining Open Offer Shares during the current difficult economic environment will better position the Company to take advantage of what the Directors currently believe to be an attractive secondary market investment environment. The Directors, on the advice of the Manager, believe that should the Company issue and/or sell all or part of the available Open Offer Shares, the Company will be in a strong position to take advantage of new accretive investments while offering further protection for the balance sheet in the event that the global markets once again deteriorate. Moreover, the full issue and/or sale of Open Offer Shares under the proposed authority would only lead to a maximum dilution per US$ Equity Share of approximately 8.2 per cent. (based on the estimated Net Asset Value sourced from unaudited management accounts of US$1.44 per US$ Equity Share and the number of US$ Equity Shares in issue, excluding US$ Equity Shares held in treasury, as at 29 May 2009).

The Directors also believe the Open Offer will have the following advantages:

• it will allow the Company to take advantage of the increased flow of secondary market investment opportunities expected to persist over the next 12 months provided in part by recent uncertain economic conditions;

• to potentially reduce the Company's long-term external borrowings;

• to potentially satisfy unfunded capital commitments to the Company's existing Private Equity Portfolio;

• to potentially allow the Company to broaden its Shareholder base which should improve liquidity in the market for its US$ Equity Shares; and

• the Cover for Issued ZDP Shares will be increased should such an issue occur.

The Bonus Issue

The Board is also seeking approval of US$ Equity Shareholders to issue Warrants by way of a Bonus Issue. It is proposed that Warrants will be issued on the basis of one Warrant for every six US$ Equity Shares held as at 17 August 2009. 

Each Warrant will confer the right (but not the obligation) to subscribe, for cash, for one US$ Equity Share at the Subscription Price on any Business Day during the period from 1 October 2009 until 30 June 2014 (both dates inclusive), after which the Subscription Rights under the Warrants will lapse. Each Warrant will be capable of conversion into one US$ Equity Share upon exercise of the Subscription Right and on payment of the Subscription Price as set out below.

Notice of the exercise of the Subscription Right may be given by Warrantholders at any time from 1 October 2009 until 30 June 2014 (both dates inclusive). The US$ Equity Shares issued pursuant to the exercise of Subscription Rights will be issued not later than 14 days after, and with effect from, the last day of the relevant calendar quarter in which the Subscription Notice was received by the Company. If a Warrantholder provides more than one Subscription Notice in any calendar quarter within the dates set out above, the Subscription Notices will be aggregated and the US$ Equity Shares to be issued pursuant to the exercise of the Subscription Rights will be issued at the same time.

  The Subscription Price will be determined by reference to the date on which the Subscription Notice is received by the Company as set out below:

Date Subscription Notice received

by the Company (inclusive)                             Relevant Subscription Price

1 October 2009 to 30 June 2010                         estimated NAV per US$ Equity Share as at 30 June 2009 plus an amount equal to 1 per cent. of the estimated NAV per US$ Equity Share as at 30 June 2009

1 July 2010 to 30 June 2011                                estimated NAV per US$ Equity Share as at 30 June 2009 plus an amount equal to 2 per cent. of the estimated NAV per US$ Equity Share as at 30 June 2009

1 July 2011 to 30 June 2012                                estimated NAV per US$ Equity Share as at 30 June 2009 plus an amount equal to 4 per cent. of the estimated NAV per US$ Equity Share as at 30 June 2009

1 July 2012 to 30 June 2013                                estimated NAV per US$ Equity Share as at 30 June 2009 plus an amount equal to 8 per cent. of the estimated NAV per US$ Equity Share as at 30 June 2009

1 July 2013 to 30 June 2014                                estimated NAV per US$ Equity Share as at 30 June 2009 plus an amount equal to 10 per cent. of the estimated NAV per US$ Equity Share as at 30 June 2009

The relevant Subscription Price shall be payable in full in cash upon subscription.

The percentage premia applying upon exercise and the resulting Subscription Prices will be based on the Manager's estimate of the NAV per US$ Equity Share as at 30 June 2009 and will not be subject to amendment, including, in the event that such estimate is later adjusted following an audit of the Company's accounts. The Company will notify Shareholders, through the publication of a supplementary prospectus, of the actual Subscription Prices once the estimated NAV per US$ Equity Share as at 30 June 2009 has been calculated.

The percentage premia applying upon exercise and the resulting Subscription Prices reflect the Board's confidence in the Company's prospects and its hope that Qualifying Bonus Issue Shareholders will be able to exercise their Subscription Rights and acquire US$ Equity Shares on favourable terms in the future.

The Directors believe the Bonus Issue of Warrants will have the following advantages:

• the Warrants, which will be issued free of subscription cost to Qualifying Bonus Issue Shareholders, may be realised for cash (through secondary sales in the market) or, alternatively, converted (upon exercise of the Subscription Right and the payment of the Subscription Price) into US$ Equity Shares in order to benefit from the Company's future growth;

• on any exercise of the Subscription Rights, the capital base of the Company will increase allowing operating costs to be spread across a larger number of US$ Equity Shares and the total expense ratio to fall;

• the Company will broaden its Shareholder base which should improve liquidity in the market for its US$ Equity Shares; and

• the Cover for Issued ZDP Shares will be increased on the exercise of Subscription Rights attaching to the Warrants and the subsequent issue of US$ Equity Shares.

The Meetings

The Circular contains notices convening the Meetings to be held at 11.00 a.m. and 11.05 a.m., respectively, on 16 June at St. Martins House, Le Bordage, St. Peter Port, Guernsey GY1 1BP.

Copies of the following documents are available for inspection at the offices of Herbert Smith LLP, Exchange House, Primrose Street, London EC2A 2HS and at the registered office of the Company during normal business hours of any business day (Saturdays and public holidays excepted) until 20 August 2009:

• the Memorandum and Articles of Incorporation of the Company;

• the revised Memorandum and Articles of Incorporation of the Company to be considered at the Meetings;

• the audited report and accounts of the Company for the period to 30 June 2006 and the financial years to 30 June 2007 and 30 June 2008;

• the unaudited financial statements for the period from 30 June 2007 to 31 December 2007 and for the period from 30 June 2008 to 31 December 2008; and

• the Circular.

The full text of the new Articles of Incorporation will be also be available for inspection at the place of the Meetings for at least 15 minutes prior to, and during the Meetings.

Copies of the Circular have been submitted to the FSA and will shortly be available for viewing from the Document Viewing Facility, UK Listing Authority, The Financial Services Authority, 25 The North Colonnade, Canary Wharf, London E14 5HS.

In addition, a full copy of the Circular is available on the Company's website (through the 'Investor Information' and 'Reports' and 'Shareholder Documents' links through http://jpelonline.com or http://jpelonline.co.uk).

Further copies of the Circular may be obtained, free of charge, from the registered office of the Company and from:

J.P. Morgan Asset Management, 20 Finsbury Street, London EC2Y 9AQ

Or J.P. Morgan Cazenove, 20 Moorgate, London EC2R 6DA

Expected Timetable

Open Offer Record Date	close of business on 17 June
Publication of Prospectus and Circular	18 June
Existing US$ Equity Shares marked 'ex' by the London Stock Exchange	expected to be before 8.00 a.m. on 19 June
Open Offer Entitlements and Excess CREST Open Offer Entitlements credited to the stock accounts of Open Offer Qualifying CREST Shareholders in CREST	8.00 a.m. on 19 June
Recommended latest time and date for requesting withdrawal of Open Offer Entitlements and Excess CREST Open Offer Entitlements from CREST (i.e. if Open Offer Entitlements are in CREST and the Qualifying Open Offer Shareholder wishes to convert them into certificated form)	4.30 p.m. on 9 July
Recommended latest time for depositing an Application Form with the CREST Courier and Sorting Service (i.e. where a Qualifying Open Offer Shareholder wishes to hold the Open Offer Entitlement set out in an Application Form as Open Offer Entitlements and Excess CREST Open Offer Entitlements in CREST)	3.00 p.m. on 10 July
Latest time and date for splitting Application Forms (to satisfy bona fide market claims only)	3.00 p.m. on 13 July
Latest time and date for receipt of the Form of Proxy for the US$ Equity Share Separate General Meeting.	11.00 a.m. on 14 July
Latest time and date for receipt of the Form of Proxy for the Extraordinary General Meeting.	11.05 a.m. on 14 July
Latest time and date for acceptance, payment in full and submission of Application Forms (in respect of Open Offer Qualifying Non-CREST Shareholders) and USE Instructions and Open Offer CREST Investor Letters (in respect of Open Offer Qualifying CREST Shareholders) to the Receiving Agent	11.00 a.m. on 15 July
US$ Equity Share Separate General Meeting	11.00 a.m. on 16 July
Extraordinary General Meeting	11.05 a.m. on 16 July
Announcement of results of the Open Offer	17 July
Listing of the Open Offer Shares issued pursuant to the Open Offer (that are not Open Offer Shares held in treasury) on the London Stock Exchange	8.00 a.m. 21 July
Open Offer Shares in uncertificated form expected to be credited to accounts in CREST	8.00 a.m. on 21 July
Despatch of definitive share certificates for the Open Offer Shares in certificated form	Week commencing 27 July
Bonus Issue Record Date for the calculation of Warrants to be issued to Qualifying Bonus Issue Shareholders pursuant to the Bonus Issue	close of business on 17 August
Subscription Price of the Warrants set based on the US$ Equity Share NAV as at 30 June 2009	18 August
Supplementary prospectus stating the Subscription Price published	18 August
Admission of the Warrants to the Official List and dealings in the Warrants commence	20 August
Crediting of CREST accounts of Qualifying Bonus Issue Shareholders in respect of the Warrants	20 August
Warrant certificates despatched	Week commencing 24 August

Enquiries

J.P. Morgan Cazenove Limited
Angus Gordon Lennox 
[phone]

HSBC Management (Guernsey) Ltd 
[phone]

J.P. Morgan Private Equity Limited
Gregory Getschow / Troy Duncan 
[phone]

Peregrine Communications
Anthony Payne / Paul Mungo / Max Hilton
[phone]

DISCLAIMER

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, 
IN WHOLE OR IN PART IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN OR ANY OTHER JURISDICTION WHERE TO DO WOULD CONSTITUTE A VIOLATION OF APPLICABLE LAWS IN SUCH JURISDICTION

This announcement and the information contained herein is not for release publication or distribution, directly or indirectly, in whole or in part in or into the United States, Australia, Canada or Japan or any other jurisdiciton where to do so would constitute a violation of applicable laws in such jurisdiction. This announcement does not constitute or form part of an offer to sell, purchase, exchange or subscribe for any securities or the solicitation of such an offer to or from any person including any US person (as defined in Regulation S under the Securities Act, 'US Person') or person in the United States of America or any other jurisdiction. The Company has not been and will not be registered under the United States Investment Company Act of 1940, as amended (the 'Investment Company Act') and investors will not be entitled to the benefit of that Act. The securities referred to in this announcement have not been and will not be registered under the United States Securities Act 1933, as amended (the 'Securities Act'), and may not be offered or sold or otherwise transferred within the United States or to, or for the account or benefit of US Persons. Securities may not be offered or sold in the United States absent registration or an exemption from registration.  The securities referred to in this announcement are being offered and sold only to non-US persons outside the United States.

This announcement is an advertisement and not a prospectus and does not constitute or form part of any offer, solicitation or invitation to purchase or subscribe for any securities in any jusrisdiction.  Investors must not subscribe for any securities referred to in this announcement except on the basis of the information contained in the Circular.

This communication is directed only at (i) persons outside the United Kingdom, or (ii) persons having professional experience in matters relating to investments who fall within the definition of 'investment professionals' in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 or (iii) high net worth bodies corporate, unincorporated associations and partnerships and trustees of high value trusts as described in Article 49(2) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005. Any investment or investment activity to which this communication relates is only available to and will only be engaged in with such persons and persons within the United Kingdom who receive this communication (other than persons falling within (ii) and (iii) above) should not rely on or act upon this communication.

The release, publication or distribution of this announcement into jurisdictions other than the United Kingdom may be restricted by law. Persons to whom this announcement is made available should therefore inform themselves about and observe any such restrictions. No action has been taken by the Company that would permit the offer or sale of any securities or possession or distribution of this announcement in any jurisdiction where action for that purpose is required. Any failure to comply with any such restrictions may constitute a violation of the laws of such jurisdictions.

All statements other than statements of historical fact in this announcement are forward-looking statements. By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors that in many cases are beyond the Company's control because they relate to events and depend on circumstances that may or may not occur in the future. Undue reliance should not be placed on any forward-looking statements. Forward-looking statements are not guarantees of future performance and the Company's actual results, financial condition, prospects and the development of the markets in which it invests may differ materially from those expressed or implied by the forward-looking statements in this announcement. Forward-looking statements speak only as of their date. The Company does not undertake, and expressly disclaims, any obligation to update any forward-looking statements, whether as a result of new information, future developments or otherwise.

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