Issue of Circular
ANNOUNCEMENT
FORESIGHT 4 VCT PLC ("THE COMPANY")
17 DECEMBER 2010
RECOMMENDED PROPOSALS TO RENEW AND INCREASE THE AUTHORITY TO ISSUE AND
REPURCHASE SHARES, TO AMEND AND ADOPT NEW ARTICLES OF ASSOCIATION AND APPROVE
REVISED PERFORMANCE INCENTIVE ARRANGEMENTS.
SUMMARY
The board of directors of the Company ("Board"), which is managed by Foresight
Group LLP, is pleased to advise that they are today writing to shareholders with
proposals to increase the authority to issue shares in connection with an offer
for subscription to be launched jointly with Foresight 3 VCT plc to raise up to,
in aggregate, £20 million.
The Board also proposes to take the opportunity to renew and increase the
general authorities to issue and repurchase shares, to amend and adopt new
articles of association to reflect the new provisions of the Companies Act 2006
("CA 2006"), as amended by the Companies (Shareholders' Rights Regulations)
2009, as well as propose revised performance incentive arrangements for
Foresight Group LLP.
These proposals require the approval of shareholders and is being sought at an
Extraordinary General Meeting of the Company to be held at 3.00 pm on 11 January
2011 at the offices of Martineau, 35 New Bridge Street, London EC4V 6BW.
THE JOINT OFFER AND RENEWAL OF GENERAL SHARE ISSUE AND REPURCHASE AUTHORITIES
The Company intends to launch a joint offer with Foresight 3 in January 2011 to
raise up to £20 million in aggregate ("Offer") through the issue of new ordinary
shares of 1p each in the Company ("Shares") and new shares in Foresight 3.
Foresight Group continues to experience general investor interest and strong
dealflow and further funds are sought to enable investment in the attractive
opportunities arising. The Board believes that this continues to be an
advantageous time in the UK economic cycle to be making venture capital
investments in smaller companies.
In order to launch the joint offer, shareholders will need to authorise the
Board to issue shares (having disapplied pre-emption rights) pursuant to the
joint offer. The Company also proposes to renew and increase its general
authorities to issue (having disapplied pre-emption rights) and repurchase
shares (in particular, to take into account the expected enlarged share capital
of the Company following the joint offer).
NEW ARTICLES
The Board also proposes to take this opportunity to amend and adopt new Articles
which incorporate changes to the current Articles to reflect the new provisions
introduced by the CA 2006 that came into force between 2007 and 2009, as amended
by the Shareholders' Rights Regulations, and to make certain clarifying and
conforming changes.
REVISED PERFORMANCE INCENTIVE ARRANGEMENTS
The Board believes that the existing performance incentive arrangements do not
incentivise Foresight Group or reflect its performance over the last few years.
It is, therefore, proposed to replace the existing arrangements with a new
performance incentive arrangement to more appropriately incentivise Foresight
Group and better align the performance interests of the investment manager with
those of the shareholders.
The revised arrangements would entitle Foresight Group to a payment equal to 15
per cent. of a dividend paid to Shareholders, subject to the net asset value
plus cumulative dividends paid per Share following the date of the Extraordinary
General Meeting exceeding 100.0p per Share ("High Watermark"), both immediately
before and immediately after the performance related incentive fee is paid.
After each distribution is made to Shareholders where a performance incentive
fee is paid to Foresight Group, the High Watermark required to be achieved by
the Company to trigger a further performance incentive fee increases by a per
Share amount equivalent to the aggregate amount of the dividend paid less the
15 per cent. performance fee paid to Foresight Group.
The performance incentive fee may be satisfied by either a cash payment or the
issue of Shares (or by a combination of both) ultimately at the Board's
discretion. Any new Shares to be issued to Foresight Group would be calculated
by dividing the performance fee cash equivalent amount by the latest net asset
value per Share after adding the cumulative dividends to be paid.
The Board believes that this performance incentive fee structure will better
align the interests of Foresight Group and Shareholders as Foresight Group will
only receive a payment following Shareholders having received a dividend payment
and if a minimum total return hurdle is maintained.
Foresight Group is (in its capacity as investment manager of the Company, being
a closed-ended investment fund) regarded as a 'related party' of the Company
under the Listing Rules. The revised performance incentive arrangements
constitute, therefore, a related party transaction requiring the approval of
shareholders pursuant to the Listing Rules.
FORESIGHT GROUP LLP
Foresight Group LLP was founded in 1984 by Bernard Fairman and Peter English and
has now grown into a team of 32 people. Foresight Group LLP is an alternative
asset manager with a strong 25 year track record and specific expertise in
environmental infrastructure, solar energy and private equity. The team has over
200 years of collective investment experience and offers entrepreneurial
managers capital and hands-on expertise to create long-term value and generate
higher returns for shareholders. Foresight offers private, high net-worth and
institutional investors access to a number of investment opportunities and a
complete management service.
FURTHER INFORMATION
Shareholders will receive a copy of a circular convening the Extraordinary
General Meeting to be held on 11 January 2011 at which shareholders will be
invited to approve resolutions in connection with the proposals. A copy of the
circular for the Company has also been submitted to the UK Listing Authority and
will be shortly available for inspection at the National Storage Mechanism which
is located at:
http://www.hemscott.com/nsm.do
For further information, please contact:
Investment Manager/Company Secretary
Gary Fraser
Foresight Group LLP/Foresight Fund Managers Limited
Telephone: 01732 471 800
Solicitors to the Company
Martineau
Kavita Patel
Telephone: 0800 763 2000
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Foresight 4 VCT PLC via Thomson Reuters ONE
[HUG#1473934]
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