Doc re. Share conversion
Close Brothers Aim Vct PLC
25 March 2008
Close Brothers AIM VCT PLC
Revised arrangements to merge share classes
The Directors of Close Brothers AIM VCT PLC (the 'Company') announce the revised
arrangements to merge the Ordinary Shares Fund and the D Shares Fund and Notice
of General Meeting and Separate Class Meetings by way of a Circular issued today
to all shareholders.
The share capital of the Company comprises two classes of shares, Ordinary
Shares (including shares arising from the earlier conversion of C Shares in May
2004) and D Shares (which were created and issued in 2004 and 2005). The D
Shares were issued on the basis that the share classes would be merged and that
the D Shares would be converted into Ordinary Shares with effect from 31 May
2008 calculated by reference to the respective audited Net Asset Value ('NAV')
of the Ordinary Shares and the D Shares as at the close of business on 29
February 2008.
For the reasons given below, the Directors now believe that it would be more
appropriate to effect the merging of the two share classes by converting the
Ordinary Shares into D Shares ('the Conversion') and then redesignating all of
the D Shares into new Ordinary Shares ('New Shares').
The revised arrangements will involve an amendment to the Articles which, under
the Companies Act, requires the approval of Shareholders by way of a special
resolution at the General Meeting and by way of extraordinary resolutions at two
separate class meetings. Notices convening the relevant meetings are set out in
the Circular being sent to shareholders today.
Merger of the Ordinary Shares Fund and the D Shares Fund
The Company has an active policy of purchasing shares in the market, in order to
provide liquidity for those Shareholders who wish to sell, at a discount of
around 10 per cent to net asset value. The principal reason for amending the
conversion process is because the unaudited NAV of an Ordinary Share, being
60.05 pence at 29 February 2008, while the Ordinary Share price at 29 February
2008 was 52 pence which is only just above its nominal value of 50 pence per
share. This is important because the Company is not authorised to buy in Shares
at less than their nominal value. Given the current uncertainty in the financial
markets, there is a danger that a relatively small reduction in net asset value
or the share price would preclude the Company from purchasing its shares.
By contrast, the unaudited net asset value per D Share at 29 February 2008 was
110.14 pence compared to a share price of 96 pence. Therefore, if the share
classes are merged by way of the conversion of Ordinary Shares to D Shares, the
Board have considerably more confidence in the sustainability of the share
buy-back programme. The existing Articles currently only allow a conversion from
D shares into Ordinary Shares. Consequently if the Ordinary Share price falls
below the nominal value of 50 pence, the Company would not be able to buy back
its own shares, including the shares that would have been converted from D
Shares to Ordinary Shares.
It is proposed that the Conversion will be effected as follows:
(a) a number of the Ordinary Shares in each Shareholder's
holding of Ordinary Shares as at 31 May 2008 will be redesignated as D Shares in
accordance with the Conversion Ratio so that the total number of Shares so
redesignated is in proportion to the ratio which the audited NAV of the Ordinary
Shares Fund portfolio bears to the audited NAV of the D Shares Fund portfolio as
at 29 February 2008;
(b) the balance of the Ordinary Shares in each
Shareholder's holding of Ordinary Shares will be redesignated as Deferred Shares
and will be purchased by the Company for an aggregate amount of 1p;
(c) all of the D Shares will then be redesignated as New
Shares and all of the assets and liabilities of the Company as at 31 May 2008
will be merged into a single pool of assets and liabilities to which the holders
of the New Shares are exclusively entitled.
The Company will use Deferred Shares to facilitate the merger of the Ordinary
Shares and D Shares. These shares will be worthless and will be immediately
cancelled on Conversion and no share certificates will be issued.
The Conversion will, if approved by Shareholders, take place on 31 May 2008 by
reference to the relative audited net assets on 29 February 2008. The
conversion calculations will be certified by the Auditors as having been
performed in accordance with the Articles of Association as being arithmetically
correct.
A worked example, based on 29 February 2008 unaudited Net Asset Values (NAVs)
published on the Regulatory News Service on 3 March 2008, shows that if the
Conversion had taken place on that date it would have resulted in a holding of
0.5452 New Shares for each Ordinary Share held.
If the resolutions to implement the revised merger arrangements are not passed
then conversion will be effected in accordance with the existing arrangements.
As explained above, this may result in the Company having difficulty in
sustaining liquidity in the Shares if the net asset value or the share price is
at or below the nominal value.
The Resolutions
The Resolution to be proposed at the General Meeting will amend the Articles by
setting out the rights attached to the Deferred Shares, amending the existing
conversion ratio in the Articles to allow the share classes to be merged by way
of the conversion of Ordinary Shares, redesignating the existing Ordinary Shares
as D Shares and Deferred Shares, authorising the Company to enter into a
contract to buy-in the Deferred Shares, redesignating all of the D Shares as New
Shares and finally deleting all references in the Articles to C Shares, D Shares
and Deferred Shares.
The Resolutions to be proposed at the Separate Class Meetings will approve the
passing of the Resolution at the General Meeting and consent to any variation of
class rights arising from that Resolution.
General Meeting
A notice convening a General Meeting of the Company to be held at 11.00 a.m. on
22 April 2008 at 10 Crown Place, London EC2A 4FT was issued to shareholders in
the Circular today. At this meeting, a Resolution will be proposed to amend the
Articles, redesignate Ordinary Shares as D Shares and Deferred Shares,
repurchase the Deferred Shares and redesignate the D Shares as New Shares, all
of which is necessary to effect the Conversion.
Separate Class Meetings
Notices convening Separate Class Meetings of the Ordinary Shareholders and D
Shareholders of the Company to be held at 11.15 a.m. and 11.30 a.m. respectively
on 22 April 2008 were issued to shareholders in the Circular today. At these
meetings, resolutions will be proposed to approve the Resolution to be proposed
at the General Meeting and to consent to any variation of class rights resulting
therefrom.
The quorum requirements for the Separate Class Meetings are for persons holding
not less than one third of the paid up capital of the relevant share class to be
present in person or by proxy. If the quorum is not present, the Separate Class
Meetings will be adjourned until 11.45 a.m. on 22 April 2007 in the case of the
Separate Class Meeting of Ordinary Shareholders and noon on that date in the
case of the D Shareholders. At the adjourned meeting those Shareholders present
will constitute a quorum regardless of the number of Shares held.
Recommendation
The Board considers that the Resolutions to be proposed at the General Meeting
and the Separate Class Meetings and the implementation of the Conversion on the
terms referred to in the dispatched Circular are in the best interests of the
Company and its Shareholders as a whole.
Accordingly, the Board recommend Shareholders to vote in favour of the
Resolutions to be proposed at the General Meeting and the Separate Class
Meetings.
The Directors intend to vote in favour of all the Resolutions to be proposed at
the General Meeting and the Separate Class Meetings in respect of their own
beneficial shareholdings, which as at 25 March 2008 totalled 131,913 Ordinary
Shares and 14,235 D Shares (representing 0.45% of the issued Ordinary Share
capital of the Company, 0.09% of the issued D Share capital of the Company and
0.33% of the combined Share capital of the Company).
25 March 2008
For further information, please contact Andrew Buchanan and Kate Tidbury, Close
Investments Limited
020 7426 4139
Karen Wagg, Polhill Communications
0207 655 0540
This information is provided by RNS
The company news service from the London Stock Exchange
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