Circular Publication & Shareholder Meeting Notices

Fair Oaks Income Limited

10 April 2026

 

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION.

10 April 2026

FAIR OAKS INCOME LIMITED
(the "Company")

(Incorporated in Guernsey under The Companies (Guernsey) Law, 2008, as amended, with registered number 58123 and registered as a Registered Closed-ended Collective Investment Scheme with the Guernsey Financial Services Commission)

PUBLICATION OF CIRCULAR AND NOTICES OF SHAREHOLDER MEETINGS

Further to the Company's announcement on 19 March 2026, the Company announces that it has today published a circular (the "Circular") setting out recommended proposed changes to the Company's capital structure, pricing, reporting and valuation currency (the "Proposals").

The Circular contains notices convening the two shareholder meetings to be held on 30 April 2026.

Capitalised terms used in this announcement shall have the same meanings given to them in the Circular unless otherwise defined herein.

Background

The Board has undertaken a review, in conjunction with the Investment Adviser, of the Company's reporting framework, capital structure and dividend policy in light of the evolution of the portfolio and developments in the CLO market. Since launch, the Company's portfolio has become predominantly euro‑denominated and more diversified across CLO debt and equity investments, leading the Board to conclude that the Company's existing U.S. dollar reporting and dividend framework is no longer optimally aligned with the underlying asset base and introduces additional operational complexity and hedging costs. Following engagement with Shareholders holding a significant proportion of the Ordinary Shares, which indicated broad support for consequential changes, the Company announced on 19 March 2026 its intention to propose changes to its currency framework and capital structure, with the Proposals intended to better align the Company with its portfolio and support its long‑term strategy.

Overview of the Proposals

1.   Currency Conversion

Over recent years the Company's portfolio has become predominantly Euro-denominated, for example representing c.90% of the portfolio as at 28 February 2026[1].

The Board believes that transitioning the Company's reporting and dividend currency from U.S. Dollars to Euros will better reflect the underlying composition of the portfolio, simplify the Company's operations, and eliminate the costs associated with hedging Euro portfolio exposures into US dollars (estimated to be 40bps per annum, plus the benefit of not being required to retain cash for potential margin calls).

In conjunction with the change of reporting and dividend currency, the Board believes it appropriate to propose a redenomination of the Ordinary Shares from U.S. Dollars to Euros.

Shareholders are being requested to approve the Conversion Resolution at the Extraordinary General Meeting of the Company to be held on 30 April 2026 proposing the re-denomination of the Existing Ordinary Shares from U.S. Dollars to Euros.

The number of Existing Ordinary Shares in issue on the Conversion Date will remain the same and only the currency denomination of the Existing Ordinary Shares will change from U.S. Dollars to Euros following the successful passing of the Currency Resolution. The effect of which will be that whereas, pre-conversion, the Ordinary Shares were denominated in U.S. Dollars as ordinary shares of no par value with their share price quoted in U.S.Dollars, following conversion the shares will be denominated in Euros as ordinary shares of no par value with their share price quoted in Euros.

2.   Share Consolidation

The second element of the Proposals is that the Shareholders are requested to approve the Consolidation Resolution. The purpose of the Consolidation Resolution is to consolidate the Converted Ordinary Shares to Consolidated Ordinary Shares on a 1-for-10 consolidation basis i.e. 1 Consolidated Ordinary Share for every 10 Converted Ordinary Shares. By way of illustration, the current number of issued Ordinary Shares (excluding those held in treasury by the Company) of 387,230,049 would reduce to 38,723,004.9 Consolidated Ordinary Shares.

The objective of the Consolidation Resolution is to improve trading dynamics, liquidity and market perception.

3.   Proposal in respect of fractions of shares post Share Consolidation

Following the successful passing of the Consolidation Resolution, a number of Ordinary Shareholders will hold a fractional number of Consolidated Ordinary Shares and this section sets out the proposed treatment of such fractions.

To address this, the Company proposes Resolution 1 as a special resolution of the Shareholders at the EGM seeking their approval to amend the Articles to allow the Directors to make such arrangements as they think fit to deal with fractions of shares, the result of any consolidation or sub-division of shares now and in the future, whether by selling such Ordinary Shares in the market, by way of redemption or otherwise.

In connection with the Consolidation, the Board proposes to make arrangements for such fractions to be aggregated, and the Ordinary Shares representing such fractions sold for the best price reasonably obtainable. Given the small economic value of such fractional entitlements (based on the market price of the Consolidated Ordinary Shares at 6pm on the date immediately prior to the date of publication of the Circular), the Board is of the view that the distribution of proceeds of such sale to individual Ordinary Shareholders would result in disproportionate costs to the Company and accordingly the net proceeds of such sale shall be retained for the benefit of the Company.

Additional information regarding the Proposals is set out below. Shareholders should read the whole of the Circular and, in particular, the letter from the Chair set out on page 5 to 11, which contains the associated risks and the recommendation from the Board that Shareholders vote in favour of the Resolutions to be proposed at the EGM which are set out on pages 15 and 17.

A copy of the Circular (incorporating the Notices of the Class Meeting and the Extraordinary General Meeting) will be available for inspection on the Company's website at www.fairoaksincome.com and on the National Storage Mechanism from the date of the Circular.

Expected Timetable

Publication of the Circular and the Notice of the Extraordinary General Meeting and separate Class Meeting	10 April 2026
Date and latest time for receipt of white Forms of Proxy for use at the Extraordinary General Meeting	1 p.m. on 28 April 2026
Date and latest time for receipt of blue Forms of Proxy for use at the Class Meeting	1:15 p.m. on 28 April 2026
Extraordinary General Meeting	1 p.m. on 30 April 2026
Class Meeting	1:15 p.m. on 30 April 2026
Announcement of the results of the Meetings	30 April 2026
Conversion Date	30 April 2026
Record date for Share Consolidation	6 p.m. on 30 April 2026
Consolidation Date	30 April 2026
Trading in Consolidated Ordinary Shares commences	8:00 a.m. on 1 May 2026
Expected date for updating CREST accounts (where applicable)	1 May 2026
Expected date by which new share certificates are to be despatched to certificated Shareholders	15 May 2026

Notes:

(i)           The times and dates set out in the timetable above and mentioned throughout the Circular are indicative only and may be adjusted by the Company without further notice. Any changes will be notified to Shareholders through an RIS.

(ii)        References to times are to Guernsey time unless otherwise stated.

LEI: 2138008KETEC1WM5YP90

For further information:

Fair Oaks Income Limited

Email: [e-mail]

Web: www.fairoaksincome.com

Fair Oaks Capital Limited

Investor Relations                                                                                                                        

DDI: [phone]

Email: [e-mail]

Apex Fund and Corporate Services (Guernsey) Limited

Email:  [e-mail]

Deutsche Numis

Nathan Brown, Investment Banking

DDI: [phone]

Email: [e-mail]

Panmure Liberum

Chris Clarke, Investment Banking

DDI: [phone]

Email: [e-mail]

Fair Oaks Income Limited

Fair Oaks Income Limited is a registered closed-ended investment company incorporated in Guernsey. The Company was admitted to trading on the Specialist Fund Market of the London Stock Exchange (now the Specialist Fund Segment of the Main Market of the London Stock Exchange) on 12 June 2014.

The investment policy of the Company is to invest (either directly and/or indirectly through FOIF II LP and FOMC LP) in US and European CLOs or other vehicles and structures which provide exposure to portfolios consisting primarily of US and European floating-rate senior secured loans and which may include non-recourse financing.

ADDITIONAL INFORMATION

LETTER FROM THE CHAIR

Introduction

The purpose of the circular ("Circular") is to provide you with information on certain proposed changes to the Company's capital structure, pricing, reporting and valuation currency (the "Proposals") and to explain why the Directors consider them to be in the best interests of the Company and the Shareholders as a whole, and to recommend that you vote in favour of the Resolutions to be proposed at the Extraordinary General Meeting and the separate Class Meeting, notices of which are set out in the Circular.

Background

Together with the information set out below, we draw your attention to the RNS announcement made by the Company on 19 March 2026.

The Board has undertaken a review, in conjunction with the Investment Adviser, of the Company's reporting framework, capital structure and dividend policy in light of the evolution of the portfolio and the broader CLO market.

Since launch, both the Company's portfolio and the underlying CLO market have evolved materially. The portfolio is now predominantly Euro-denominated and more diversified across CLO debt and equity positions. The Board believes it is appropriate that the Company's structure evolves accordingly, ensuring that reporting, capital allocation and distributions are aligned with the underlying asset base and the long-term interests of Shareholders.

Following engagement with holders of a significant percentage of the Ordinary Shares regarding the conclusions of this review, which indicated broad support for the proposed consequential changes, the Company announced on 19 March 2026 certain proposed changes which are detailed below.

On 19 March 2026 the Company also announced a revised dividend policy for the Ordinary Shares. Further information on this revision, which is not subject to Shareholder approval, is included below.

Proposals

The Directors propose to convene an Extraordinary General Meeting of the Shareholders and a separate Class Meeting of the Ordinary Shareholders to recommend the Proposals as set out below.

4.   Currency Conversion

Over recent years the Company's portfolio has become predominantly Euro-denominated, for example representing c.90% of the portfolio as at 28 February 2026[2].

The Board believes that transitioning the Company's reporting and dividend currency from U.S. Dollars to Euros will better reflect the underlying composition of the portfolio, simplify the Company's operations, and eliminate the costs associated with hedging Euro portfolio exposures into US dollars (estimated to be 40bps per annum, plus the benefit of not being required to retain cash for potential margin calls).

In conjunction with the change of reporting and dividend currency, the Board believes it appropriate to propose a redenomination of the Ordinary Shares from U.S. Dollars to Euros.

Shareholders are being requested to approve the Conversion Resolution proposing the re-denomination of the Existing Ordinary Shares from U.S. Dollars to Euro.

The number of Existing Ordinary Shares in issue on the Conversion Date will remain the same and only the denomination of the Existing Ordinary Shares will change from USD to EUR following the Currency Conversion. The effect of which will be that whereas, pre-conversion, the shares were denominated in USD as ordinary shares of no par value with their share price quoted in USD, following conversion the shares will be denominated in EUR as ordinary shares on no par value with their share price quoted in EUR.

5.   Share Consolidation

The second element of the Proposals is that the Shareholders are requested to approve the Consolidation Resolution. The purpose of the Consolidation Resolution is to consolidate the Converted Ordinary Shares to Consolidated Ordinary Shares on a 1-for-10 consolidation basis i.e. 1 Consolidated Ordinary Share for every 10 Converted Ordinary Shares. By way of illustration, the current number of issued Ordinary Shares (excluding those held in treasury by the Company) of 387,230,049 would reduce to 38,723,004.9 Consolidated Ordinary Shares.

The objective of the Consolidation Resolution is to improve trading dynamics, liquidity and market perception.

6.   Proposal in respect of fractions of shares post Share Consolidation

Following Consolidation, a number of Ordinary Shareholders will hold a fractional number of Consolidated Ordinary Shares and this section sets out the proposed treatment of such fractions.

To address this, the Company proposes Resolution 1 as a special resolution of the Shareholders seeking their approval to amend the Articles to allow the Directors to make such arrangements as they think fit to deal with fractions of shares, the result of any consolidation or sub-division of shares now and in the future, whether by selling such Ordinary Shares in the market, by way of redemption or otherwise.

In connection with the Consolidation, the Board proposes to make arrangements for such fractions to be aggregated, and the Ordinary Shares representing such fractions sold for the best price reasonably obtainable. Given the small economic value of such fractional entitlements (based on the market price of the Consolidated Ordinary Shares at 6pm on the date immediately prior to the date of publication of the Circular) the Board is of the view that the distribution of proceeds of such sale to individual Ordinary Shareholders would result in disproportionate costs to such Company and accordingly the net proceeds of such sale shall be retained for the benefit of the Company.

Treatment of Treasury Shares on Conversion and Consolidation

Any Treasury Shares that are held by the Company on Conversion will be treated in the same manner as the Existing Ordinary Shares and be converted.

Any Treasury Shares that are held by the Company on the Consolidation Date will be treated in the same manner as Consolidated Ordinary Shares and be consolidated.

The Company is excluded from voting on any of the Resolutions in respect of Treasury Shares. 

Share Rights

The effect of the Currency Conversion and the Consolidation will mean that, each Shareholder's proportionate interest in the Company's issued Ordinary Shares will remain substantially the same.

Other than the proportional rebalancing of the voting rights across the share classes of the Company (see the section marked Outcome of the Consolidation below) the rights attached to the Consolidated Ordinary Shares remain unchanged following the Conversion and Consolidation.

Outcome of the Consolidation

As a result of the Consolidation the number of Consolidated Ordinary Shares in issue shall reduce tenfold from 387,230,049 Ordinary Shares to 38,723,004 Consolidated Ordinary Shares. As at the date of the Circular there are 19,444,815 Realisation Shares in issue. It should be noted that Realisation Shares also carry the right to vote at General Meetings.

Prior to the Consolidation the percentage split of proportional voting rights between the Ordinary Shares and the Realisation Shares in the Company was as follows:

Ordinary Shares:                    387,230,049    95.22% of total voting rights  

Realisation Shares                  19,444,815      4.78% of total voting rights

Following Consolidation the split of voting rights between the Ordinary Shares and the Realisation Shares in the Company will be as follows:

Ordinary Shares:                    38,723,004*     66.57% of total voting rights  

Realisation Shares                  19,444,815      33.43% of total voting rights

*0.9 of an Ordinary Share rounded down redeemed on Consolidation.

Absent any adjustment, the Consolidation would therefore reduce the total voting rights in the Company of the Ordinary Shares by approximately 29%.

In order to address this, the Directors propose to amend the voting rights attached to the Consolidated Ordinary Shares so as to grant, on a poll, 10 (ten) votes per Consolidated Ordinary Share, while any Realisation Shares remain in issue.  When no Realisation Shares remain in issue, for example following the redemption of all remaining Realisation Shares, the voting rights attached to the Consolidated Ordinary Shares shall revert, on a poll, to 1 (one) vote per Consolidated Ordinary Share. 

The variation of the voting rights attaching to the Consolidated Ordinary Shares constitutes a variation of the rights attaching to those Consolidated Ordinary Shares which must be approved by a special resolution of the holders of the Ordinary Shares and the Class Resolution proposes to address this. 

The effect of the Class Resolution will be that the total voting rights of the Shareholders will revert to the position prior to the Consolidation, as set out below.

Class of Shares	Shares in issue	Total votes per class	Proportional Voting Rights
Consolidated Ordinary Shares	38,723,004	387,230,040	95.22%
Realisation Shares	19,444,815	19,444,815	4.78%

The Realisation Shares

It is intended the that the Realisation Shares will continue to be redeemed over time, which will result in a further increase in the Ordinary Shares' total voting rights in the Company.

Revised dividend policy for Ordinary Shares 

The Company's existing dividend policy is to pay fixed quarterly dividends of 2 US cents per Ordinary Share, currently representing an annual dividend yield of 16.9% based on the last published NAV and 17.9% based on the current share price[3].

The Board believes that, in light of the evolution of the Company's portfolio, a revised dividend policy is more appropriate, and in particular highlights:

·    As older, seasoned positions amortise or are exited, future distributions by the Company will increasingly be supported by new investments with attractive risk-adjusted returns consistent with current market conditions. The Investment Adviser has provided to the Board a prospective target return (known as an IRR) on new transactions of 12-14% per annum;

·    A more significant percentage of the portfolio is currently invested in CLO debt and mezzanine tranches, generating more stable and predictable income streams relative to CLO equity securities. As at 28 February 2026, 38% of the portfolio was invested in CLO debt and mezzanine tranches;

·    Certain distributions from the portfolio, including the initial distributions from newer CLOs, are conservatively classified as returns of principal rather than income;

·    Returns across CLO equity and debt are cyclical and the current level of fixed dividend may constrain the Investment Adviser's flexibility to make investment decisions consistent with the objective of delivering attractive long-term shareholder returns.

Under the revised dividend policy for the Ordinary Shares, the Company would establish a target base level of income with potential for enhanced distributions by:

·    Establishing a target base quarterly dividend of 1.00 EUR per Ordinary Share[4], which is equivalent to an annualised dividend yield of c.10% of the NAV as at 28 February 2026. This is intended to provide holders of Ordinary Shares with a clear and sustainable foundation for dividends while maintaining appropriate flexibility in the management of portfolio cash flows, including the ability to supplement distributions over the course of the year.

·    Providing the potential for surplus portfolio income received above this target base level to be distributed to holders of Ordinary Shares, typically through an enhanced fourth quarterly dividend. By way of illustration, the Investment Adviser's income projection, based on current portfolio composition and prevailing market conditions, estimates total net income return on the Ordinary Shares in respect of the current year ending 31 December 2026 of 12.0% to 12.5% of NAV as at 28 February 2026[5] .

It is intended that dividends on Ordinary Shares for the current year ended 31 December 2026 will be declared at a level consistent with the revised dividend policy set out above, and therefore that the above package of corporate changes will take effect before the declaration of the Company's first quarterly dividend which is expected in early May 2026. 

Capital allocation

The Board will retain the ability to allocate surplus capital in the manner it considers most beneficial to Shareholders, including through an ongoing commitment to the share buyback programme should the Ordinary Shares trade at a material discount to NAV, reinvestments when attractive investment opportunities arise, and potentially to dividends.

The Investment Adviser will continue to reinvest 25% of its quarterly fees into Ordinary Shares when the Ordinary Shares trade at a discount to NAV, providing an ongoing signal of confidence in the portfolio and strategy.

Risks in relation to the Proposals

Although the Currency Conversion is proposed in the context of the Company's increased Euro‑linked investment activity, the Company's investment policy remains flexible and does not require the Company to maintain any particular level of exposure to the Euro or to any other currency. As a result, the Company's underlying portfolio may from time to time be significantly exposed to non‑Euro currencies. Accordingly, the proportion of the Company's assets denominated in or exposed to Euro relative to other currencies may vary, potentially materially, over time.

The Consolidation is proposed with the objective of improving trading dynamics, liquidity and market perception, but there is no guarantee that such outcomes will result in practice.

Shareholders should be aware that if they hold 9 (nine) or fewer Converted Ordinary Shares on the Consolidation Date, following the consolidation and the implementation of the proposals in relation to fractional entitlements, they will cease to be Shareholders and they will not receive any Consolidated Ordinary Shares under the Consolidation.

The Extraordinary General Meeting and the Class Meeting

The Extraordinary General Meeting will be held at 1 Royal Plaza, Royal Avenue, St Peter Port, Guernsey GY1 2HL on 30 April 2026 at 1p.m., at which Resolutions 1, 2 and 3 will be put to Shareholders.

The Class Meeting will be held at 1 Royal Plaza, Royal Avenue, St Peter Port, Guernsey GY1 2HL on 30 April 2026 at 1:15p.m., at which the Class Resolution will be put to Ordinary Shareholders.

Notices of the Extraordinary General Meeting and the Class Meeting are set out at the end of the Circular.

The full text of the Resolutions is set out in the notices of the Extraordinary General Meeting and the Class Meeting at the end of the Circular.

Resolution 1 requires a majority of not less than 75% of the votes cast by members entitled to vote and present in person or by proxy at the Extraordinary General Meeting to be cast in favour for it to be passed. Resolutions 2 and 3 require a simple majority of the votes cast by members entitled to vote and present in person or by proxy at the Extraordinary General Meeting to be cast in favour in order for it to be passed.

The resolution proposed at the Class Meeting requires a majority of not less than 75% of the votes cast by holders of Ordinary Shares entitled to vote and present in person or by proxy at the Class Meeting to be cast in favour in order for it to be passed.

In order to ensure that a quorum is present at the Extraordinary General Meeting, it is necessary for at least two Shareholders entitled to vote to be present, whether in person or by proxy (or, if a corporation, by a representative).

In order to ensure that a quorum is present at the Class Meeting, it is necessary for at least two Shareholders entitled to vote to be present, whether in person or by proxy (or, if a corporation, by a representative).

Resolutions 1, 2 and 3 are conditional upon each other and are also conditional upon the passing of resolution proposed at the Class Meeting, meaning that Resolutions 1, 2 and 3 must be passed at the Extraordinary General Meeting and the Class Resolution must be passed at the separate Class Meeting in order for each of Resolutions 1, 2, 3 and the Class Resolution to come into effect. Should any of Resolutions 1, 2 and 3 or the Class Resolution fail, the Proposals will not come into effect.

The Proposals are solely in relation to the Existing Ordinary Shares (ISIN: GG00BNNLWT35; Trading code: FAIR) and there are no proposals at this time in respect of the Realisation Shares (ISIN: GG00BSWVSD56; Trading code: FA17).

The Consolidated Ordinary Shares will have a new ISIN of GG00BS874H38 and their trading code will remain as FAIR.

On completion of the Conversion and Consolidation new share certificates will be issued to holders of Ordinary Shares in accordance with the timetable set out in the Circular. All previous share certificates will be void thereafter.

Following the Currency Conversion and the Consolidation the Shares shall remain at all times and continue to be known as the "Ordinary Shares". The use of each of (i) Converted Ordinary Shares and (ii) Consolidated Ordinary Shares is solely for use in the Circular to differentiate between the various stages of the Proposals and there will be no renaming or redesignation of any shares in the Company.

Shareholders who are unsure about the tax consequence of the Proposals should consult their own professional tax advisers without delay.

Action to be taken in respect of the Extraordinary General Meeting and the Class Meeting

Please submit your vote by proxy electronically using MUFG Corporate Markets' Investor Centre app or by accessing the web browser at https://uk.investorcentre.mpms.mufg.com/ or in hard copy form. In order to be valid, proxy appointments must be submitted using the Investor Centre or in hard copy form to MUFG Corporate Markets at PXS 1, Central Square, 29 Wellington Street, Leeds LS1 4DL, in each case, by no later than 1 p.m. on 28 April 2026 in respect of the Extraordinary General Meeting and by no later than 1:15 p.m. on 28 April 2026 in respect of the Class Meeting, or 48 hours before any adjourned meeting.

If you hold your Shares in uncertificated form (i.e. in CREST), you may appoint a proxy for the Extraordinary General Meeting and the Class Meeting by completing and transmitting a CREST Proxy Instruction in accordance with the procedures set out in the CREST Manual issued by Euroclear so that it is received by the Registrar (under CREST Participation ID RA10) by no later than 1 p.m. on 28 April 2026 in respect of the Extraordinary General Meeting and by no later than 1:15 p.m. on 28 April 2026 in respect of the Class Meeting. The time of receipt will be taken to be the time from which the Registrar is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST.

If you are an institutional investor, you may also be able to appoint a proxy electronically via the Proxymity platform, a process which has been agreed upon by the Company and approved by the Registrar. For further information regarding Proxymity, please go to www.proxymity.io. 

Shareholders are strongly urged to appoint the Chair of the relevant Meeting as their proxy to vote on their behalf. If you appoint someone else (other than the Chair of the relevant Meeting) to be your proxy, this may result in your vote not being counted if your proxy is unable to attend the relevant Meeting.

The appointment of a proxy will not prevent Shareholders from attending the Extraordinary General Meeting or the Class Meeting and voting in person should they so wish.

Shareholders are invited to direct any questions to the Company Secretary by emailing [e-mail].

Recommendation

The Board considers that the Proposals are in the best interests of the Company and its Shareholders as a whole. Accordingly, the Board unanimously recommends that Shareholders vote in favour of the Resolutions to be proposed at each of the Extraordinary General Meeting and the Class Meeting.

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[1] Source Intex. Portfolio currency based on NAV as at 28 February 2026 and currency denominations of all CLO investments, excluding cash.

[2] Source Intex. Portfolio currency based on NAV as at 28 February 2026 and currency denominations of all CLO investments, excluding cash.

[3]  Based on Ordinary Share NAV as at 28 February 2026 and share price as at 8 April 2026.

[4] Assuming the Currency transition is implemented but prior to the proposed Share Consolidation.

[5] Projection of future income based on current estimates and market conditions which may vary in the future, cannot be guaranteed, and is not a forecast of profits.

 

END