Bonus Issue of Subscription S

RNS Number : 4226L

JPMorgan Asian Investment Tst PLC

09 January 2009

 



JPMorgan Asian Investment Trust plc

Bonus Issue of Subscription Shares

Introduction

Further to the announcement on 19 November 2008 by JPMorgan Asian Investment Trust plc (the 'Company') that the Board was proposing to make a bonus issue of Subscription Shares (the 'Bonus Issue') to existing Shareholders, the Board has today published a prospectus (the 'Prospectus') setting out details of the Bonus Issue and proposals in relation to the adoption of new Articles and a renewal of the Company's share repurchase and share issuance authorities (the 'Proposals').  

This announcement summarises the details and benefits of the Proposals and sets out the reasons for the Directors recommending that shareholders vote in favour of the Resolutions to be proposed at a General Meeting of the Company to be held on 4 February 2009.

All capitalised terms not defined in this Announcement shall have the meaning ascribed to them in the Prospectus.

The Proposals

The Proposals are as follows: 

The Bonus Issue

The Company is proposing to issue Subscription Shares to Qualifying Shareholders on the basis of one Subscription Share for every five Existing Ordinary Shares held on the Record Date. Fractions of Subscription Shares will not be allotted or issued and entitlements will be rounded down to the nearest whole number of Subscription Shares. The Subscription Shares will be issued by way of a bonus issue to Qualifying Shareholders.

Each Subscription Share will confer the right (but not the obligation) to subscribe for one Ordinary Share on any Business Day during the period from 1 April 2009 until 31 March 2014 (both dates inclusive), after which the rights under the Subscription Shares will lapse. Each Subscription Share will be capable of conversion into one Ordinary Share upon exercise of the Subscription Share Rights and on payment of the Conversion Price as set out below.

Notice of the exercise of the Subscription Share Rights may be given at any time from 1 April 2009 until 31 March 2014 (both dates inclusive) and the Ordinary Shares arising on conversion will be issued within five Business Days of the first Business Day of the calendar month following the month in which the relevant notices are received by the Registrar.

Qualifying Shareholders' entitlements will be assessed against the register of members on the Record Date, which is expected to be 5.00 p.m. on 3 February 2009. 

Subscription Shares will rank equally with each other and will not carry the right to receive any dividends from the Company. Subscription Shares do not carry the right to attend and vote at any general meeting of the Company. 

The Conversion Price will be equal to the NAV per Ordinary Share as at 5.00 p.m. on 2 February 2009, plus a percentage premium to such amount, rounded up to the nearest whole penny as follows: 

a)      if exercised on any day between and including 1 April 2009 and 31 March 2010 – a 1 per cent. premium to such NAV per Ordinary Share; 

b)      if exercised on any day between and including 1 April 2010 and 31 March 2012 – a 30 per cent. premium to such NAV per Ordinary Share; and 

c)      if exercised on any day between and including 1 April 2012 and 31 March 2014 – a 50 per cent. premium to such NAV per Ordinary Share.

The percentage premia applying upon exercise and the resulting Conversion Prices reflect the Board's confidence in the Company's medium to long term prospects and its hope that Qualifying Shareholders will be able to exercise their Subscription Share Rights and acquire Ordinary Shares on favourable terms in the future.

It is expected that an announcement setting out the Conversion Prices will be made on 3 February 2009.

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

• Qualifying Shareholders will receive readily tradable securities with financial value which they may convert into Ordinary Shares in order to benefit from the Company's future growth or realise for cash;
  
  
• Shareholders will receive securities which are qualifying investments for the purposes of the stocks and shares component of an ISA and permitted investments for the purposes of a SIPP; 
  
  
• on any exercise of the Subscription Share Rights, the capital base of the Company will increase, allowing operating costs to be spread across a larger number of Ordinary Shares and hence the total expense ratio to fall; and
  
  
• following the exercise of any Subscription Share Rights, the Company will have an increased number of Ordinary Shares in issue, which may in due course improve the liquidity in the market for its Ordinary Shares.  

Authority to repurchase shares

At the 2009 AGM the Company is proposing to renew its authority to make market purchases of Ordinary Shares representing up to 14.99 per cent. of the ordinary share capital which will then be in issue (subject to certain conditions). This authority will not take into account the potential issue of Ordinary Shares arising on the exercise of Subscription Share Rights.

If the Bonus Issue is approved by Shareholders, the Company is proposing to replace the authority to repurchase Ordinary Shares to be voted on at the 2009 AGM with an authority to repurchase up to 14.99 per cent. of the ordinary share capital in issue following the implementation of the Bonus Issue and following the exercise of any of the Subscription Share Rights prior to the relevant date of repurchase. 

In order to allow the Company to repurchase Subscription Shares, the Company is also seeking authority at the General Meeting to repurchase up to 14.99 per cent. of the issued subscription share capital. At the Annual General Meetings to be held in 2010 and beyond it is expected that authorisation for repurchases of both Ordinary Shares and Subscription Shares will be sought.

Repurchases of Ordinary Shares will be made at the discretion of the Board, and will only be made in the market at prices below the prevailing NAV per Ordinary Share as and when market conditions are considered by the Board to be appropriate and in accordance with the Listing Rules. Ordinary Shares repurchased might not be cancelled but rather held as treasury shares and may be subsequently re-issued at a premium. Purchases of Ordinary Shares to be held in treasury will be made in accordance with the Listing Rules and the Companies (Acquisitions of Own Shares) (Treasury Shares) Regulations 2003 (as amended). The Company does not have authority to reissue Ordinary Shares from treasury at a discount to NAV and therefore any reissue of Ordinary Shares from treasury would be at above the prevailing NAV.

The price at which purchases through the market are carried out will not exceed the higher of (i) 5 per cent. above the average of the middle market quotations (as derived from the Official List) for the 5 consecutive dealing days ending on the dealing day immediately preceding the date on which the purchase is made and (ii) the higher of the price quoted for (a) the last independent trade of, or (b) the highest current independent bid for, any number of Ordinary Shares on the trading venue where the purchase is carried out.

Repurchases of Subscription Shares will be made at the discretion of the Board and will only be made when market conditions are considered by the Board to be appropriate and in accordance with the Listing Rules. Any Subscription Shares purchased by the Company shall be cancelled and shall not be held in treasury for re-issue or resale.  

Share issues and authority

Shareholder resolutions were passed at the AGM held on 2 February 2007 granting the Board authority to (i) issue new Ordinary Shares and (ii) issue new Ordinary Shares or Ordinary Shares held in treasury other than by a pro rata issue to existing Shareholders for cash. Each of these authorities was for up to an aggregate nominal amount of £2,018,214 (representing 8,072,856 Ordinary Shares, being approximately 5 per cent. of the then issued ordinary share capital). These authorities do not take into account the potential issue of Ordinary Shares arising on the exercise of Subscription Share Rights following the Bonus Issue.

If the Bonus Issue is approved by Shareholders, the Company is proposing to renew its authority to (i) issue new Ordinary Shares and (ii) issue new Ordinary Shares (or Ordinary Shares held in treasury) for cash on a non-pre-emptive basis. The number of Ordinary Shares over which these authorities will be sought will be up to an aggregate nominal amount of £4,875,179 (representing 19,500,715 Ordinary Shares) or, if less, 10 per cent. of the Company's total ordinary share capital in issue following implementation of the Bonus Issue and the exercise of any of the Subscription Share Rights prior to the relevant time. These authorities, if granted, will lapse at the conclusion of the AGM of the Company to be held in 2010.

Share issues pursuant to these authorities would only be undertaken at prices which are at a premium to the prevailing Net Asset Value per Ordinary Share.

In the year to 30 September 2008 the Company did not issue any Ordinary Shares. Since 30 September 2008 and up to the date of this announcement no further Ordinary Shares have been issued. 

New Articles of Association

At the 2009 AGM the Company is proposing to adopt the Interim Articles of Association to incorporate certain minor and technical changes as well as a number of changes to reflect recent legal developments, including the Companies Act 2006 coming into force.

In order to implement the Bonus Issue the Company will be required to adopt the New Articles. The New Articles are required to be adopted so that the rights attaching to the Subscription Shares are provided for. No other amendments are being made and, if Resolution 1 is passed, the Company's articles will be identical to the Interim Articles of Association as proposed to be adopted at the 2009 AGM, save for the incorporation of the Subscription Share Rights.

The New Articles will be on display at the registered office of the Company from the date of this document until the end of the General Meeting.

Continuation Vote

Under the Company's Articles of Association, the Company is required to propose a continuation vote as an ordinary resolution at every third Annual General Meeting. If a continuation vote is not passed the Directors are required to convene a general meeting within four months of the relevant Annual General Meeting at which proposals for the winding up or other reconstruction of the Company will be considered.

The last continuation vote took place in February 2008 and the next is due at the Annual General Meeting to be held in 2011, when all or some of the Subscription Shares may still be outstanding. Subscription Shares do not carry the right to attend and vote at any general meeting of the Company, including any meeting convened to consider a continuation vote. In the event that the continuation vote is not passed and the Company is wound up or restructured, the entitlement of Subscription Shareholders will be calculated in accordance with the rights attaching to the Subscription Shares. Broadly, this means that if the Net Asset Value per Ordinary Share is higher than the applicable Conversion Price (and any associated costs), Subscription Shareholders will receive the value of the difference in the winding up or reconstruction.  

Admission and dealings

The Subscription Shares will be in registered form and may be issued either in certificated or uncertificated form. No temporary documents of title will be issued. Pending despatch of definitive certificates, transfers of Subscription Shares in certificated form will be certified against the Company's share register. All documents or remittances sent by or to Shareholders will be sent through the post at the risk of the Shareholder.

Applications will be made to the UK Listing Authority for the Subscription Shares to be admitted to the Official List and to the London Stock Exchange for such Shares to be admitted to trading on its main market. It is expected that Admission will occur, and that dealings will commence, in respect of the Subscription Shares on 5 February 2009. On Admission, the Subscription Shares will confer rights to subscribe for new Ordinary Shares representing, in aggregate, up to 20 per cent. of the then issued ordinary share capital of the Company.

Overseas Shareholders

The issue of the Subscription Shares to persons who have a registered or mailing address in countries outside of the EEA (being the 27 member states of the European Union, plus  Iceland, Liechtenstein and Norway) may be affected by the law or regulatory requirements of the relevant jurisdiction. 

The Board will allot any Subscription Shares due under the Bonus Issue to Overseas Shareholders to a market maker who will sell such Subscription Shares promptly at the best price obtainable. The proceeds of sale will be paid to the Overseas Shareholders entitled to them save that entitlements of less than £5 per Overseas Shareholder will be retained by the Company for its own account. Any Shareholder who is in any doubt as to his position should consult an appropriate independent professional adviser without delay.

Taxation 

Shareholders should note that Subscription Shares are qualifying investments for the stocks and shares component of an ISA, but that exercise of Subscription Share Rights may affect the annual subscription limit available for further investment into an ISA in the relevant year.  Shareholders who are in any doubt about their tax position or who may be subject to tax in a jurisdiction other than the United Kingdom should consult their professional adviser.

General Meeting

The Proposals are conditional on, amongst other things, the approval by Shareholders of the Resolutions to be proposed at a General Meeting of the Company which has been convened for 4 February 2009.

Timetable

	2009
Latest time and date for receipt of Voting Instruction Forms from Plan Participants	12.45 p.m. on 28 January
Latest time and date for receipt of Forms of Proxy	12.45 p.m. on 2 February
Conversion Prices of Subscription Shares calculated	Close of business on 2 February
Conversion Prices of Subscription Shares announced	3 February
Record date for Bonus Issue	3 February
General Meeting	12.45 p.m. on 4 February
Dealings in Subscription Shares commence	8.00 a.m. on 5 February
Expected date for crediting of Subscription Shares to CREST accounts	5 February
Despatch of share certificates in respect of Subscription Shares	week commencing 9 February

Notes: 

(1)     The times and dates set out in the Expected Timetable of Principal Events may be adjusted by 
          the Company, in which event details of the new times and dates will be notified, as required, to 
          the UK Listing Authority and the London Stock Exchange and, where appropriate, to 
          Shareholders. 

(2)     All references to time in this document are to London time

Enquiries

Cenkos Securities

Will Rogers    020 7397 1920

JPMorgan Asset Management (UK) Limited

Simon Crinage                           020 7742 3445

Richard Plaskett                         020 7742 3422

 

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