Publication of a Prospectus

RNS Number : 6237Q

Nippon Active Value Fund PLC

28 October 2021

 

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED IN IT ARE NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO, THE UNITED STATES, AUSTRALIA, CANADA, JAPAN OR THE REPUBLIC OF SOUTH AFRICA OR ANY JURISDICTION IN WHICH THE SAME COULD BE UNLAWFUL.

LEI: 213800JOFEGZJYS21P75

28 October 2021

Nippon Active Value Fund plc

Publication of Prospectus and Circular

Further to the announcement on Friday 22 October 2021 of a proposed fundraise, Nippon Active Value Fund plc ("NAVF" or the "Company") has today published a Prospectus and Circular in connection with an Initial Placing, Offer for Subscription and Intermediaries Offer and a Placing Programme for up to 300 million Ordinary Shares and/or C Shares in aggregate. Capitalised terms used but not defined in this announcement shall have the meaning set out in the Circular.

1.  Introduction

The Board has today announced that:

i.  it proposes to raise additional capital by way of a placing, offer for subscription and intermediaries offer of up to 150 million C Shares or Ordinary Shares (the "Issue") and a placing programme (including the Issue) of up to 300 million Ordinary Shares and/or C Shares (the "Placing Programme", together with the Issue, the "Issuances"); and

ii.  applications will be made for all shares to be issued pursuant to the Issuances to be admitted to trading on the Specialist Fund Segment of the Main Market.

The Issuances are conditional on Shareholders' approval (the "Share Allotment Authorities"), which would (in addition to the existing authorities granted at the Company's last annual general meeting) grant the Board the authority to allot and issue up to 300 million Ordinary Shares and/or C Shares pursuant to the Issuances, which, prior to the conversion of any C Shares, represents approximately 290 per cent. of the voting rights of the Company's existing issued shares on a non-pre-emptive basis.

In the event that the Directors decide to proceed with an issue of Ordinary Shares, the issue price for the new Ordinary Shares will be determined by the Company and will be not less than the prevailing Net Asset Value per Ordinary Share at the time of announcement of the issue price plus a premium intended over the course of the Issue and the Placing Programme to cover the fixed costs of the Issue. In the event that the Directors decide to proceed with an issue of C Shares, the issue price for the C Shares will be £1.00.

The Issue is also conditional on:

i.  the Placing Agreement having become unconditional in all respects (save for the condition relating to First Admission) and not having been terminated in accordance with its terms prior to First Admission; and

ii.  First Admission becoming effective not later than 8.00 a.m. on 25 November 2021 or such later time and/or date as Shore Capital and the Company may agree (being not later than 8.00 a.m. on 31 January 2022).

Each placing under the Placing Programme will also be conditional on:

i.  in the case of New Ordinary Shares, the Placing Programme Price being determined by the Directors;

ii.  admission of the New Shares being issued pursuant to such issue to the Specialist Fund Segment;

iii.  the Placing Agreement becoming otherwise unconditional in respect of the relevant issue of New Shares in all respects and not having been terminated on or before the date of such Admission; and

iv.  a valid supplementary prospectus being published by the Company if such is required by the UK Prospectus Regulation.

As well as seeking the authorities required in connection with the Issuances, the Resolutions to be proposed at the General Meeting will also seek Shareholders' consent to purchase C Shares which may be issued pursuant to the Issue (the "Share Buyback Resolution"). The proposed Share Buyback Resolution will be in addition to the Company's existing buyback authority to make market purchases of its Ordinary Shares.

Further details of the Resolutions which will be proposed at the General Meeting and the background to the Resolutions are set out below.

2.  Company update

The Company's Ordinary Shares were first admitted to trading on the Specialist Fund Segment on 21 February 2020. On the IPO Admission Date, 103 million Ordinary Shares were issued at 100p per share. Rosenwald Capital was responsible for all IPO costs and the net proceeds of the Company's initial public offering were £103 million.

The net proceeds from the IPO have been used to acquire a portfolio of shareholdings in 20 companies, each of which is a Japanese company having its shares listed and traded on the Tokyo Stock Exchange. As at 30 June 2021, the net assets of the Company stood at £108.7 million and the net asset value per Ordinary Share stood at 105.5p. Both these measures have continued to advance since. The unaudited net asset value of the Company, as at the close of business on 25 October 2021 (being the latest practicable date prior to publication of this announcement) was £137.92 million, representing a Net Asset Value per Ordinary Share of 133.9 pence. The market price of the Ordinary Shares as at 25 October 2021 was 131.5p, representing a discount to NAV of 1.8 per cent.

The Company's intention is to look to achieve its results primarily through capital appreciation. As such, no specific dividend policy has been established and any distributions will be made entirely at the discretion of the Board. Notwithstanding the foregoing, the Company will make such distributions as may be required to ensure compliance with the rules relating to investment trusts.

The Company declared its inaugural interim dividend, in respect of the period from 22 October 2019 to 31 December 2020, of 0.85 pence per Ordinary Share, paid on 30 April 2021 to shareholders on the register at 9 April 2021.

3.  Reasons for the Issuances

The performance of the Company since IPO has demonstrated proof of the original concept. The Issuances should further enhance the effectiveness of the Company's investment strategy. Currently, no constraints on the ability of putting much larger amounts of capital to work are envisaged.

The proceeds of the Issuances will be used for investment in accordance with the Company's investment policy and to fund the Company's operational expenses. The intention is to invest the proceeds of the Issuances substantially within the universe of investment targets identified by the Investment Adviser. This will facilitate larger holdings and accelerate the process of engaging with management. It is probable that some further names, within the universe of suitable companies already identified, will be added over time.

4.  Details of the Issuances

Number of Ordinary Shares and/or C Shares

The Company intends to issue up to 150 million C Shares or Ordinary Shares pursuant to the Issue and up to 300 million New Ordinary Shares and/or C Shares pursuant to the Placing Programme, provided that such number of Ordinary Shares (including New Ordinary Shares) and C Shares issued pursuant to the Issuances may not exceed 300 million Shares in aggregate. The total number of Ordinary Shares and/or C Shares issued under the Issuances will be determined by the Company, Shore Capital and Rising Sun after taking into account demand for the New Shares and prevailing economic and market conditions.

The number of Ordinary Shares and/or C Shares available under the Issuances is intended to provide flexibility and should not be taken as an indication of the number of Shares to be issued. Any issues of Ordinary Shares and/or C Shares under the Issuances will be notified by the Company through an RNS announcement prior to the First Admission and each Subsequent Admission.

Any C Shares issued pursuant to the Issuances (the "Issued C Shares"):

i.  would not be entitled to any dividends payable in respect of the Ordinary Shares but on their conversion into New Ordinary Shares they would rank pari passu with the Ordinary Shares (save for any dividends or other distributions declared, made or paid on the Ordinary Shares by reference to a record date prior to the conversion of the Issued C Shares); and

ii.  would be entitled to any dividends payable in respect of the pool of assets attributable to the relevant tranche of Issued C Shares. It is intended that dividends would be declared on a tranche of Issued C Shares only in the event that there is material net income available for distribution to such tranche of Issued C Shares, but the level of dividends (if any) declared on such tranche of Issued C Shares would depend on the actual timing and terms of the deployment of proceeds in relation to such tranche of Issued C Share. In the event that any net income attributable to a tranche of Issued C Shares were not distributed as a dividend, such net income would be included in the value of such tranche of Issued C Shares when calculating the number of Ordinary Shares into which they convert.

Issue Price

The issue price for any C Shares pursuant to the Issuances will be 100p per C Share and the costs of the relevant issue of such C Shares will be paid out of the proceeds of such issue and accordingly will be borne indirectly by investors in the relevant tranche of C Shares.

In the event that the Directors decide to proceed with an issue of Ordinary Shares, the issue price for the new Ordinary Shares will be determined by the Company and will be not less than the prevailing Net Asset Value per Ordinary Share at the time of announcement of the issue price plus a premium intended, together with premia over the course of the Placing Programme, to cover the fixed costs of the Issue.

The issue price of any New Ordinary Shares issued pursuant to the Placing Programme will be calculated by reference to the last published cum income Net Asset Value of each existing Ordinary Share together with a premium intended to at least cover the costs and expenses of the placing pursuant to the Placing Programme (including, without limitation, any placing commissions), such costs and expenses being estimated at approximately one per cent. of the amounts raised. The Directors will determine the Placing Programme Price on the basis described above so as to cover the costs and expenses of each placing of New Ordinary Shares under the Placing Programme and thereby avoid any dilution of the Net Asset Value of the existing Ordinary Shares held by Shareholders. By way of illustration, assuming a last published cum income NAV of 120p per Ordinary Share, the Placing Programme Price per New Ordinary Share would be expected to be at least 121.6p, and the expenses indirectly borne by an investor in such New Ordinary Shares would be at least 1.6p per Ordinary Share.

Effect of the Issuances on existing share capital

If C Shares are issued pursuant to the Issue, assuming that 150 million C Shares are issued, existing Shareholders who do not participate in the Issue will suffer an immediate dilution in voting rights of approximately 59.3 per cent. Existing Shareholders will not suffer any dilution in the proportion of Ordinary Shares held by them until the conversion of those C Shares into Ordinary Shares. The dilution of a Shareholder's holding at that point will be determined by the conversion ratio applied at that time.

If Ordinary Shares are issued pursuant to the Issue, assuming that 150 million Ordinary Shares are issued, existing Shareholders who do not participate in the Issue will suffer an immediate dilution of 59.3 per cent.

Assuming that 150 million Ordinary Shares are issued pursuant to the Issue and a further 150 million Ordinary Shares are issued under the Placing Programme, a Shareholder holding shares representing one per cent. of the Company's Ordinary Shares following the Issue, who does not participate in the Placing Programme, would, following the completion of the Placing Programme, hold Ordinary Shares representing approximately 0.6 per cent. of the Company's issued Shares.

The Placing Agreement

Pursuant to the terms of the Placing Agreement, Shore Capital has agreed, subject to certain conditions, to use its reasonable endeavours to procure subscribers for the New Shares to be made available in the Initial Placing and each placing under the Placing Programme. The Placing Agreement is conditional upon, inter alia, the Share Allotment Authorities being duly passed at the General Meeting.

The Placing Agreement contains warranties from the Company and the Investment Adviser in favour of Shore Capital in relation to, inter alia, the accuracy of the information contained in the Prospectus. In addition, the Company has agreed to indemnify Shore Capital in relation to certain liabilities it incurs arising out of the proper performance by Shore Capital of its duties under the Placing Agreement. Shore Capital may terminate the Placing Agreement (in respect of its own obligations) in certain circumstances, including for a material breach of the warranties referred to above.

General

The Issue and Placing Programme will both be non-pre-emptive (although no New Shares will be issued in the event that the Share Allotment Authorities are not passed at the General Meeting).

The expected timetable, including timing of the closing of each Subsequent Placing, is subject to change at the discretion of the Company and Shore Capital.

Any Ordinary Shares or C Shares will, when issued, be subject to the Company's Articles. Any Ordinary Shares would be credited as fully paid and would rank pari passu in all respects with the existing Ordinary Shares in issue in the capital of the Company, including the right to receive all future dividends and distributions declared, made or paid on or in respect of such Ordinary Shares where the record date falls after the date of issue of such Ordinary Shares.

Any C Shares issued pursuant to the Issuances would not be entitled to any dividends payable in respect of the Ordinary Shares but on their conversion into New Ordinary Shares would rank pari passu with the Ordinary Shares then in issue (save for any dividends or other distributions declared, made or paid on the Ordinary Shares by reference to a record date prior to the conversion of the C Shares).

Admission

Applications will be made to the London Stock Exchange for the Ordinary Shares and C Shares to be issued pursuant to the Issue and for the New Shares to be issued from time to time pursuant to the Placing Programme or on conversion of the C Shares to be admitted to the Specialist Fund Segment.

5.  Company's authority to purchase its own Shares

At the annual general meeting of the Company held on 12 May 2021, the Company was authorised to make market purchases of up to 14.99 per cent. of the Ordinary Shares in issue as at the date of the annual general meeting, equating to a maximum of 15,439,700 Ordinary Shares. This authority will expire at the end of the Company's annual general meeting to be held in 2022 or, if earlier, on the expiry of 15 months from the date the authority was granted, being 12 August 2022.

The Company has not utilised its authority to purchase any of its own Ordinary Shares.

Resolution 3 in the Notice of General Meeting, which will be proposed as a special resolution, will authorise the Company to make market purchases of up to 22,499,999 C Shares or, if fewer, such amount as is equal to 14.99 per cent. of the C Shares in issue on First C Share Admission. Any C Shares purchased pursuant to such authority will be cancelled.

The maximum price that may be paid by the Company for its own C Shares shall be the higher of (i) 5 per cent. above the average of the middle market quotations for a C Share for the five business days immediately before the day on which that C Share is contracted to be purchased and (ii) the higher of the price of the last independent trade and the highest current independent bid on the trading venue where the purchase is carried out (in each case exclusive of any expenses). The minimum price which may be paid for each C Share shall be £0.10 (exclusive of any expenses).

The authority conferred by Resolution 3 will expire at the earlier of the annual general meeting to take place in 2022 and 18 months from the date the Resolution is passed. The Board intends to use the authority to manage any share price discount to NAV in circumstances where the Board considers this to be appropriate.

6.  Risks associated with the Issuances

The risks associated with an investment in the Company and its investment strategy are set out in the Prospectus.

For existing Shareholders however, there are particular risks associated with the authorities sought by the Company as outlined in the Circular. These are as follows:

The Company intends to issue New Shares on a non-pre-emptive basis, which will dilute Shareholders' equity

If Resolutions 1 and 2 are passed, the Company expects to issue New Shares on a non-pre-emptive basis. Existing holders of Shares will, if they are not able to participate in the relevant issue of New Ordinary Shares or C Shares pro rata to their existing holdings or at all, have the percentage of voting and economic rights they hold in the Company diluted.

Delays in deployment of the proceeds of the Issue

The Company is aiming to have invested substantially all of the proceeds of the Issue within six months from the date of First Admission but there can be no guarantee that this will be achieved. Depending on the availability of attractive investee companies that fit within the Company's investment policy and investment strategy and the ability to successfully acquire positions in such investee companies at an appropriate price, it may take the Company more than six months to invest the proceeds of the Issue. There can be no assurance as to how long it will take for the Company to invest the proceeds of the Issue and the longer the period the greater the likelihood that the Company's NAV, revenues and returns to Shareholders will be materially adversely affected.

It may be difficult for Shareholders to realise their investment and a liquid market in the C Shares or Ordinary Shares may fail to develop

The price at which the Shares are traded and the price at which investors may realise their investment will be influenced by a large number of factors, some specific to the Company and its investments and some which may affect companies generally. Admission of the New Shares to trading should not be taken as implying that there is or will be a liquid market for the Shares. Consequently, the share price may be subject to greater fluctuation on small volumes of trading of Shares and the Shares may be difficult to sell at a particular price. The market price of the Shares may not reflect their underlying Net Asset Value.

While the Directors retain the right to effect repurchases of Ordinary Shares and are seeking the right to effect repurchases of C Shares in the manner described in this announcement, they are under no obligation to use such powers or to do so at any time and Shareholders should not place any reliance on the willingness of the Directors so to act. Shareholders wishing to realise their investment in the Company may therefore be required to dispose of their Shares in the market. There can be no guarantee that a liquid market in the Shares will be maintained or that the Shares will trade at prices close to their underlying NAV. Accordingly, Shareholders may be unable to realise their investment at such Net Asset Value or at all.

The number and class of Shares to be issued pursuant to the Issue or the Placing Programme is not yet known, and there may be a limited number of holders of C Shares. Limited numbers and/or holders of Shares may mean that there is limited liquidity in the Shares which may affect (i) an investor's ability to realise some or all of his investment and/or (ii) the price at which such investor can effect such realisation and/or (iii) the price at which the Shares trade in the secondary market.

7.  The General Meeting

In order to implement the Issue and the Placing Programme, the General Meeting will be held at 1st Floor, Senator House, 85 Queen Victoria Street, London, EC4V 4AB at 2.00 p.m. on 12 November 2021, at which the Resolutions will be proposed.

Resolution 1 - Authority to allot Shares

Resolution 1 will, if passed, grant the Directors the authority to allot up to 300 million Ordinary Shares and/or C Shares (which represents approximately 290 per cent. of the existing issued shares) in connection with the Issuances. The authority granted by this Resolution is in addition to the Directors' existing authority to allot (in aggregate) up to 10,300,000 Ordinary Shares (which was granted at the Company's last annual general meeting) and will lapse on the date on which the Placing Programme closes.

If Resolution 1 is passed, the Directors intend to exercise the authority in connection with the Issuances.

The Company does not hold any shares in treasury.

Resolution 1 is an ordinary resolution. This means that, for Resolution 1 to be passed, a majority of the votes cast in person or by proxy must be in favour of the Resolution.

Resolution 2 - Disapplication of pre-emption rights in respect of the Issuances

Resolution 2 will, if passed, grant the Directors the authority to allot the Ordinary Shares and/or C Shares pursuant to the Issuances, over which they were granted authority pursuant to Resolution 1, for cash on a non-pre-emptive basis. Resolution 2 is conditional on Resolution 1 being passed and is in addition to the Directors' existing authority to allot (in aggregate) up to 10,300,000 Ordinary Shares for cash on a non-pre-emptive basis (which was granted at the Company's last annual general meeting).

The Directors do not intend to exercise any authority granted by Resolution 2 to issue Ordinary Shares at an issue price below the Company's last published Net Asset Value.

Resolution 2 is a special resolution. This means that, for Resolution 2 to be passed, at least three-quarters of the votes cast in person or by proxy must be in favour of the Resolution.

Resolution 3 - Authority to purchase C Shares

Resolution 3 is conditional on First C Share Admission and will, if passed, grant the Directors the authority to make market purchases of up to 22,499,999 C Shares or, if fewer, 14.99 per cent. of the C Shares in issue on First C Share Admission.

Resolution 3 is a special resolution. This means that, for Resolution 3 to be passed, at least three-quarters of the votes cast in person or by proxy must be in favour of the Resolution.

If approved, the authority granted pursuant to Resolution 3 will be in addition to the Company's existing buyback authority to make market purchases of its Ordinary Shares granted at the Company's annual general meeting on 12 May 2021.

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

Prospectus and Circularpublished	28 October 2021
InitialPlacing,OfferforSubscriptionandIntermediariesOfferopens	28 October 2021
GeneralMeeting	2.00 p.m. on 12 November 2021
FormofNewShares to be allottedpursuanttotheIssueannounced	On or around 12 November 2021
Latest time and date for receipt of Application Forms under the Offer for Subscription and payment in full or settlement of the relevant CREST instruction	1.00 p.m. on 18 November 2021
Latest time and date for receipt of Initial Placing orders	12.00 p.m. on 22 November 2021
Latest time and date for receipt of applications from Intermediaries in respect of the Intermediaries Offer	12.00 p.m. on 22 November 2021
Results of the Initial Placing, Offer for Subscription and Intermediaries Offer announced	23 November 2021
First Admission of the New Shares to be issued pursuant to the Issue to the Specialist Fund Segment and dealings commence	8.00 a.m. on 25 November 2021
CREST accounts credited in respect of New Shares issued in uncertificated form	As soon as practicable after 8.00 a.m. on 25 November 2021
Certificates despatched in respect of New Shares issued in certificated form	Week commencing 29 November 2021
Placing Programme opens	29 November 2021
Placing Programme closes	24 October 2022

1  References to times above and in this announcement generally are to London times unless otherwise specified.

2  All times and dates in the expected timetable and in this announcement may be adjusted by the Company in consultation with Shore Capital. Any material changes to the timetable will be notified via an RIS.

ILLUSTRATIVE STATISTICS

Issue price per C Share	100p
Target number of New Shares to be issued by the Company	150 million
Target gross proceeds from the Issue	£150 million
Estimated Net Asset Value per C Share on Admission	98p

1  The estimated Net Asset Value per Ordinary Share will depend on the performance of the Company's portfolio. The Issue Price per Ordinary Share will be announced via an RIS.

2  The Directors have reserved the right, in consultation with Shore Capital, to increase the size of the Issue by up to 150 million New Shares if overall demand exceeds 150 million New Shares. Any such increase will be announced through an RNS announcement.

ILLUSTRATIVE PLACING PROGRAMME STATISTICS

Maximum number of Ordinary and/or C Shares	300 million (inclusive of any New Shares issued pursuant to the Initial Placing, Offer for Subscription and Intermediaries Offer)
Placing Programme Price per New Ordinary Share	Not less than the last published cum income Net Asset Value per Ordinary Share at the time of issue plus a premium intended to at least cover associated issue costs (which are estimated at 1.3 per cent. of the gross proceeds of the relevant Subsequent Placing under the Placing Programme)
Placing Programme Price per C Share	100p
Enquiries:
Shore Capital Robert Finlay / Rose Ramsden (Corporate) Adam Gill / Matthew Kinkead (Sales) Henry Willcocks / Fiona Conroy (Corporate Broking)		020 7408 4050
PraxisIFM Fund Services (UK) Limited Tom Daish / Sylvanus Cofie		020 4513 9260
Media Enquiries Alex Gorokhov		020 3040 0892

A copy of this announcement will be available on the Company's website at www.nipponactivevaluefund.com . Neither the content of the Company's website, nor the content on any website accessible from hyperlinks on its website for any other website, is incorporated into, or forms part of, this announcement nor, unless previously published by means of a recognised information service, should any such content be relied upon in reaching a decision as to whether or not to acquire, continue to hold, or dispose of, securities in the Company.

This announcement is a financial promotion and is not intended to be investment advice. The content of this document, which has been prepared by, and is the sole responsibility of, the directors of Nippon Active Value Fund plc, has been approved by Shore Capital Stockbrokers Limited solely for the purposes of section 21(2)(b) of the Financial Services and Markets Act 2000 (as amended). Shore Capital Stockbrokers Limited is authorised and regulated by the Financial Conduct Authority (Firm Registration No. 124784). Registered in England and Wales No. 01850105. Registered Office: Cassini House, 57 St James's Street London SW1A 1LD. Shore Capital Stockbrokers Limited operates under the Companies Act 2006 and is not regulated as a collective investment scheme by the Financial Conduct Authority.

This announcement is an advertisement and does not constitute a prospectus relating to the Company and does not constitute, or form part of, any offer or invitation to sell or issue, or any solicitation of any offer to subscribe for, any shares in the Company in any jurisdiction 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 or act as any inducement to enter into, any contract therefor. Copies of the prospectus are available from https://www.nipponactivevaluefund.com/.

Recipients of this announcement who are considering acquiring New Shares are reminded that any such acquisition must be made only on the basis of the information contained in the Prospectus which may be different from the information contained in this announcement. The subscription for New Shares is subject to specific legal or regulatory restrictions in certain jurisdictions. Persons distributing this announcement must satisfy themselves that it is lawful to do so. The Company assumes no responsibility in the event that there is a violation by any person of such restrictions.

This announcement may not be published, distributed or transmitted by any means or media, directly or indirectly, in whole or in part, in or into the United States. This announcement does not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States. The securities mentioned herein have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the " US Securities Act ") or with any securities regulatory authority of any state or other jurisdiction of the United States and will not be offered, sold, exercised, resold, transferred or delivered, directly or indirectly, in or into the United States or to, or for the account or benefit of, any US person (as defined under Regulation S under the US Securities Act). The Company has not been, and will not be, registered under the U.S. Investment Company Act of 1940, as amended.

Neither this announcement nor any copy of it may be: (i) taken or transmitted into or distributed in any member state of the European Economic Area, Canada, Australia, Japan or the Republic of South Africa or to any resident thereof. Any failure to comply with these restrictions may constitute a violation of the laws of any such jurisdiction. The distribution of this announcement in other jurisdictions may be restricted by law and the persons into whose possession this document comes should inform themselves about, and observe, any such restrictions.

Shore Capital and Corporate Limited and Shore Capital Stockbrokers Limited (together " Shore Capital "), which are authorised and regulated by the Financial Conduct Authority in the United Kingdom, are acting only for the Company in connection with the matters described in this announcement and are not acting for or advising any other person, or treating any other person as their client, in relation thereto and will not be responsible for providing the regulatory protection afforded to clients of Shore Capital or advice to any other person in relation to the matters contained herein. Neither Shore Capital nor any of their directors, officers, employees, advisers or agents accepts any responsibility or liability whatsoever for this announcement, its contents or otherwise in connection with it or any other information relating to the Company, whether written, oral or in a visual or electronic format.

This announcement includes statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "anticipates", "expects", "intends", "may", "will", or "should" or, in each case, their negative or other variations or comparable terminology. These forward-looking statements relate to matters that are not historical facts regarding the Company's investment strategy, financing strategies, investment performance, results of operations, financial condition, prospects and dividend policies of the Company and the instruments in which it will invest. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements. These factors include, but are not limited to, changes in general market conditions, legislative or regulatory changes, changes in taxation regimes or development planning regimes, the Company's ability to invest its cash in suitable investments on a timely basis and the availability and cost of capital for future investments.

The Company expressly disclaims any obligation or undertaking to update or revise any forward-looking statements contained herein to reflect actual results or any change in the assumptions, conditions or circumstances on which any such statements are based unless required to do so by FSMA, the Prospectus Regulation Rules made under Part VI of the FSMA or the Financial Conduct Authority or other applicable laws, regulations or rules.

Information to Distributors- UK Product Governance

Solely for the purposes of the product governance requirements of Chapter 3 of the FCA Handbook Product Intervention and Product Governance Sourcebook (the " UK Product Governance Requirements "), and/or any equivalent requirements elsewhere to the extent determined to be applicable, and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any manufacturer (for the purposes of the UK Product Governance Requirements and/or any equivalent requirements elsewhere to the extent determined to be applicable) may otherwise have with respect thereto, the Shares the subject of the Issue and Placing Programme have been subject to a product approval process, which has determined that such Shares are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each defined in Chapter 3 of the FCA Handbook Conduct of Business Sourcebook; and (ii) eligible for distribution through all permitted distribution channels (the " Target Market Assessment ").

Notwithstanding the Target Market Assessment, distributors should note that: the price of the Shares may decline and investors could lose all or part of their investment; the Shares offer no guaranteed income and no capital protection; and an investment in the Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to any contractual, legal or regulatory selling restrictions in relation to the Issue or the Placing Programme. Furthermore, it is noted that, notwithstanding the Target Market Assessment, Shore Capital will only procure investors who meet the criteria of professional clients and eligible counterparties.

For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of Chapters 9A or 10A respectively of the FCA Handbook Conduct of Business Sourcebook; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the Shares.

Each distributor is responsible for undertaking its own target market assessment in respect of the Shares and determining appropriate distribution channels.

UK PRIIPs Regulation

In accordance with the UK version of Regulation (EU) No. 1286/2014 on key information documents for packaged retail and insurance-based investment products, which is part of UK law by virtue of the European Union (Withdrawal) Act 2018, as amended (the " UK PRIIPs Regulation "), a key information document (the " KID ") in respect of an investment in the Shares has been prepared by the Company and is available to investors at www.nipponactivevaluefund.com. If a new class of C Shares is issued under the Placing Programme, the Company will make available a key information document in relation to such class of C Shares as required under the UK PRIIPs Regulation.

If you are distributing Ordinary Shares, it is your responsibility to ensure that the KID is provided to any clients that are "retail clients".

The Company is the only manufacturer of the Ordinary Shares for the purposes of the UK PRIIPs Regulation and none of Shore Capital, Rising Sun Management Ltd. (" RSM ") or International Fund Management Limited (" IFM ") are manufacturers for these purposes. None of Shore Capital, RSM or IFM makes any representations, express or implied, or accepts any responsibility whatsoever for the contents of the KID prepared by the Company nor accepts any responsibility to update the contents of the KID in accordance with the UK PRIIPs Regulation, to undertake any review processes in relation thereto or to provide the KID to future distributors of Ordinary Shares. Each Shore Capital, RSM and IFM and their respective affiliates accordingly disclaim all and any liability whether arising in tort or contract or otherwise which it or they might have in respect of the key information documents prepared by the Company. Investors should note that the procedure for calculating the risks, costs and potential returns in the KID are prescribed by laws. The figures in the KID may not reflect actual returns for the Company and anticipated performance returns cannot be guaranteed.

 

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