Proposal to cancel Preference Shares & IMS
5 November 2013
Rights and Issues Investment Trust Public Limited Company (the "Company")
Proposal for the cancellation and repayment of 5.5 per cent. Preference Shares and announcement of the Company's AIFMD strategy and 2nd IMS.
The Company announces a proposal to cancel all of the Company's Preference Shares of £1 each ("Preference Shares"). The cancellation of the Company's Preference Shares will be effected by a repayment in full of the capital paid up on the Preference Shares plus the fixed dividend payable on the Preference Shares which accrues up to 31 December 2013 together with a premium of 25p per Preference Share.
The Company currently has 200,000 Preference Shares in issue. These shares constitute a very small part of the Company's total share capitalisation by reference to market value. In addition, in certain circumstances these shares carry rights which may limit the Company's flexibility in pursuing its corporate objectives. For these reasons, your Board considers that the Company no longer requires the capital represented by the Preference Shares to carry out its objectives, and that the administration costs and the restrictions imposed by the Preference Shares have become disproportionate to the benefits accruing to the Company from such shares.
The proposal will require the separate approval of the holders of the Company's capital shares of 25p each, income shares of 25p each and Preference Shares (together the "Shareholders") respectively and, in relation to the reduction of capital represented by the Preference Shares, the sanction of the Court. Thus the proposal involves seeking authority for the cancellation of the Preference Shares and the repayment in full of the capital paid up on the Preference Shares and payment to the holders of the Preference Shares of the fixed dividend payable on the Preference Shares which accrues up to 31 December 2013 together with a premium of 25p per Preference Share from the Shareholders at separate class meetings of the capital shareholders, the income shareholders and the preference shareholders (the "Separate Class Meetings") and at a general meeting of the Company (the "General Meeting"). The Separate Class Meetings and the General Meeting will all be held at the offices of the Company at No. 1 Poultry, London EC2R 8JR from 12.15pm on 29 November 2013. Formal notices will be given in a circular to Shareholders to be posted tomorrow.
The repayment of Preference Shares is also subject to confirmation by the Court of the proposed reduction in the Preference Share capital of the Company. In order to provide the confirmation, the Court must be satisfied that creditors of the Company whose debts are outstanding on the effective date of the reduction are not prejudiced by the proposal. It is expected that, given the nature of the assets held by the Company and its creditors, the Court will be satisfied that the cancellation and repayment of the Preference Share capital will not prejudice the interests of the Company's creditors. The Company may however be required to give undertakings to the Court as to the use of that proportion of its assets which matches its liabilities.
The repayment of the Preference Shares will become effective on registration of the order of the court confirming the reduction of capital under section 648 of the Companies Act 2006. It is expected that this should occur by 15 January 2014. The Company intends to request that the listing of the Preference Shares be cancelled on the day after the Preference Shares are cancelled, which is expected to be 16 January 2014.
A copy of the circular will shortly be available from the:
· Company's website: www.rightsandissues.co.uk; and
· National Storage Mechanism: www.morningstar.co.uk/uk/NSM.
A copy of the circular will shortly be available to view at the registered office of the Company, No.1 Poultry London EC2R 8JR.
Alternative Investment Fund Managers Directive 2011/61/EU (the "AIFM Directive")
Rights and Issues Investment Trust plc also announces its strategy to ensure that the Company will comply with the AIFM Directive. The Company fulfils the requirements of a small registered UK AIFM as defined in the Alternative Investment Fund Managers Regulations 2013 (2013/1773) (the "AIFM Regulations"), and therefore has submitted an application to the Financial Conduct Authority (the "FCA") for entry on the register of small registered UK AIFMs in accordance with Regulations 10 and 11 of the AIFM Regulations. As the Company is a small registered UK AIFM, it will be required to report to the FCA on the main instruments in which it trades, its principal exposures and most important concentrations, in accordance with the AIFM Directive and all applicable rules and regulations implementing the AIFM Directive in the UK including without prejudice to the generality of the foregoing the AIFM Regulations and all relevant provisions of the FCA Handbook.
In order to comply with the requirements of a small registered UK AIFM, the Company will no longer be able to gear. This is not expected to disadvantage the Company, which has not utilised gearing in recent years.
Interim Management Statement
Rights and Issues Investment Trust PLC today issues its second interim management statement covering the ten months to 31st October 2013.
As has already been published, the unaudited net asset values at 31st October 2013 were:
25p Capital Shares 5126.8p (3848.1p at the 31st December 2012)
25p Income Shares 1240.0p (935.0p at the 31st December 2012)
The last four months have seen a significant rise in equity markets. The FTSE All Share Index has now risen by 16% in 2013. The Trust has maintained its solid performance with a 33% increase in total group equity funds to £115m as at 31st October.
For enquiries please contact:
Simon Knott, Rights and Issues Investment Trust plc, 0207 415 4131
This information is provided by RNS
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