JPMorgan Chinese Inv Tst PLC
18 March 2008
JPMorgan Chinese Investment Trust plc
Bonus issue of Subscription Shares and proposed issue of up to 50 million New
The Company has today published a circular ('the Circular') with details of
recommended proposals for a bonus issue of Subscription Shares and the proposed
issue of up to 50 million New Ordinary Shares. Capitalised terms in this
announcement have the same meaning as set out in the Circular.
On 19 December 2007 the Board announced proposals to enlarge the Company through
a bonus issue of Subscription Shares and, subject to market conditions, an offer
for subscription. The Board is today publishing its Proposals for the Bonus
Issue, the potential future issue of up to 50 million New Ordinary Shares, the
adoption of new Articles of Association and a renewal of the Company's share
buy-back authority. The Company is also proposing to bring forward the
continuation vote that is due to be held at the 2008 AGM to the General Meeting
to be held in connection with the Proposals. The Board has determined that in
current market conditions it would not be appropriate to proceed with an offer
The Proposals to be considered by and voted on by Shareholders at the General
Meeting 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 Ordinary Shares. 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 without cost to Qualifying Shareholders.
Each Subscription Share will confer the right (but not the obligation) to
subscribe for one Ordinary Share on 15 May 2009 and at the end of each 12 month
period thereafter until 15 May 2013 when the rights under the Subscription
Shares will lapse. Each Subscription Share will be capable of conversion into
one Ordinary Share on notification to the Company in the thirty days preceding
15 May in any of the years 2009 to 2013 (inclusive) on payment of the Conversion
Price as set out below.
Holders of Subscription Shares will not be entitled to receive any dividends
from the Company.
The Conversion Price will be equal to the unaudited NAV per Ordinary Share as at
5 p.m. on 11 April 2008, plus a percentage premium to such amount, rounded up to
the nearest whole penny as follows:
(a) if exercised in May 2009 - a 1 per cent. premium to such NAV per Ordinary
(b) if exercised in May 2010 - a 10 per cent. premium to such NAV per Ordinary
(c) if exercised in May 2011, 2012 or 2013 - a 30 per cent. premium to such NAV
per Ordinary Share.
The percentage premiums applying at each exercise opportunity and the resulting
Conversion Prices reflect the Board's confidence in the Company's 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
The Directors believe the Bonus Issue of Subscription Shares will have the
• At no additional cost, 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 that have similar characteristics to
warrants, but unlike warrants are qualifying investments for the purposes of an
existing PEP and for the stocks and shares component of an ISA; and
• on any exercise of 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 the total expense ratio to fall.
The Company published a prospectus on 6 July 2006 relating to a proposed issue
of up to 50 million Ordinary Shares. This prospectus has now lapsed and the
Company has today issued a new prospectus which will enable it to make available
up to 50 million New Ordinary Shares in the future. The Company is also seeking
the authority to allot up to 50 million New Ordinary Shares and to allot these
shares without regard to statutory pre-emption rights.
The Board intends to make available up to 50 million New Ordinary Shares to be
issued from time to time, to existing Shareholders and to new investors, at the
discretion of the Directors and at times when the Directors consider it to be in
the best interests of existing Shareholders. Such issuance will be at a premium
to the Net Asset Value per Ordinary Share at the time of issue, in order to
cover the payment of any costs of the issue and the costs of investing the
proceeds of the issue.
The Directors consider that the issue of New Ordinary Shares will lead to:
• the Company being able to meet demand from Shareholders and new investors for
new Ordinary Shares at a reasonable premium to NAV per Ordinary Share;
• a broadening of the Shareholder base and an improvement in the liquidity of
the Ordinary Shares; and
• the Company's costs being spread over a greater number of Ordinary Shares,
which may result in the Company's total expense ratio being reduced.
Authority to repurchase shares
The Company is proposing to renew its authority to buy back up to 14.99 per
cent. of the issued Ordinary Share capital and to seek authority to buy back up
to 14.99 per cent. of the issued Subscription Share capital. 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 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.
Repurchases of Subscription Shares will be made at the discretion of the Board
and will only be made when market conditions are appropriate.
The Bonus Issue, if approved, will create Subscription Shares with a five year
life. In order that the Subscription Share Rights are not affected by the
Company's five yearly continuation vote schedule, it is proposed to bring
forward the 2008 continuation vote and hold the vote at the General Meeting to
be held in connection with the Proposals rather than at the Company's AGM later
in the year. This change will be reflected in the New Articles proposed to be
adopted at the General Meeting.
The Directors have considered the viability of the Company along with its
mandate and concluded that the investment outlook for the Greater China region
is positive over the medium to long term. The Directors also believe that the
continuing appointment of the present manager, JPMorgan Asset Management (UK)
Limited on the terms agreed is in the best interests of Shareholders and that
the Company should continue in its current form. If Resolution 3 is passed at
the General Meeting, the next continuation vote will be at the AGM in 2013.
New Articles of Association
If Resolution 1 is approved, new Articles of Association will be adopted to
replace the existing Articles of Association. The New Articles, as well as
providing for the rights attaching to the Subscription Shares, making some minor
technical changes and amending the provisions relating to the continuation vote,
will also incorporate a number of changes to reflect recent legal developments
in relation to electronic communication with shareholders, shareholder meetings
and resolutions, directors' indemnities, transfers of shares and directors'
conflicts of interest.
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 14 April 2008.
General Meeting 12.30 p.m on 14 April
Record date for Bonus Issue 15 April
Conversion Price of Subscription Shares announced 15 April
Dealings in Subscription Shares commence 8 a.m. on 16 April
JPMorgan Asset Management (UK) Limited
Richard Plaskett 020 7742 3422
Winterflood Investment Trusts
Jane Lewis 020 3100 0295
A copy of the Circular and Prospectus will be submitted shortly to the UK
Listing Authority and will be available for inspection at the UK Listing
Authority's Document Viewing Facility, which is situated at:
The Financial Services Authority
25, the North Colonnade
London E14 5HS
This information is provided by RNS
The company news service from the London Stock Exchange