Coats Regulatory News (COA)

25 Mar 2008 17:13

Close Brothers Aim Vct PLC25 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 revisedarrangements to merge the Ordinary Shares Fund and the D Shares Fund and Noticeof General Meeting and Separate Class Meetings by way of a Circular issued todayto all shareholders. The share capital of the Company comprises two classes of shares, OrdinaryShares (including shares arising from the earlier conversion of C Shares in May2004) and D Shares (which were created and issued in 2004 and 2005). The DShares were issued on the basis that the share classes would be merged and thatthe D Shares would be converted into Ordinary Shares with effect from 31 May2008 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 29February 2008. For the reasons given below, the Directors now believe that it would be moreappropriate to effect the merging of the two share classes by converting theOrdinary Shares into D Shares ("the Conversion") and then redesignating all ofthe D Shares into new Ordinary Shares ("New Shares"). The revised arrangements will involve an amendment to the Articles which, underthe Companies Act, requires the approval of Shareholders by way of a specialresolution at the General Meeting and by way of extraordinary resolutions at twoseparate class meetings. Notices convening the relevant meetings are set out inthe 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 toprovide liquidity for those Shareholders who wish to sell, at a discount ofaround 10 per cent to net asset value. The principal reason for amending theconversion process is because the unaudited NAV of an Ordinary Share, being60.05 pence at 29 February 2008, while the Ordinary Share price at 29 February2008 was 52 pence which is only just above its nominal value of 50 pence pershare. This is important because the Company is not authorised to buy in Sharesat less than their nominal value. Given the current uncertainty in the financialmarkets, there is a danger that a relatively small reduction in net asset valueor 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 was110.14 pence compared to a share price of 96 pence. Therefore, if the shareclasses are merged by way of the conversion of Ordinary Shares to D Shares, theBoard have considerably more confidence in the sustainability of the sharebuy-back programme. The existing Articles currently only allow a conversion fromD shares into Ordinary Shares. Consequently if the Ordinary Share price fallsbelow the nominal value of 50 pence, the Company would not be able to buy backits own shares, including the shares that would have been converted from DShares to Ordinary Shares. It is proposed that the Conversion will be effected as follows: (a) a number of the Ordinary Shares in each Shareholder'sholding of Ordinary Shares as at 31 May 2008 will be redesignated as D Shares inaccordance with the Conversion Ratio so that the total number of Shares soredesignated is in proportion to the ratio which the audited NAV of the OrdinaryShares Fund portfolio bears to the audited NAV of the D Shares Fund portfolio asat 29 February 2008; (b) the balance of the Ordinary Shares in eachShareholder's holding of Ordinary Shares will be redesignated as Deferred Sharesand will be purchased by the Company for an aggregate amount of 1p; (c) all of the D Shares will then be redesignated as NewShares and all of the assets and liabilities of the Company as at 31 May 2008will be merged into a single pool of assets and liabilities to which the holdersof the New Shares are exclusively entitled. The Company will use Deferred Shares to facilitate the merger of the OrdinaryShares and D Shares. These shares will be worthless and will be immediatelycancelled on Conversion and no share certificates will be issued. The Conversion will, if approved by Shareholders, take place on 31 May 2008 byreference to the relative audited net assets on 29 February 2008. Theconversion calculations will be certified by the Auditors as having beenperformed in accordance with the Articles of Association as being arithmeticallycorrect. 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 theConversion had taken place on that date it would have resulted in a holding of0.5452 New Shares for each Ordinary Share held. If the resolutions to implement the revised merger arrangements are not passedthen conversion will be effected in accordance with the existing arrangements.As explained above, this may result in the Company having difficulty insustaining liquidity in the Shares if the net asset value or the share price isat or below the nominal value. The Resolutions The Resolution to be proposed at the General Meeting will amend the Articles bysetting out the rights attached to the Deferred Shares, amending the existingconversion ratio in the Articles to allow the share classes to be merged by wayof the conversion of Ordinary Shares, redesignating the existing Ordinary Sharesas D Shares and Deferred Shares, authorising the Company to enter into acontract to buy-in the Deferred Shares, redesignating all of the D Shares as NewShares and finally deleting all references in the Articles to C Shares, D Sharesand Deferred Shares. The Resolutions to be proposed at the Separate Class Meetings will approve thepassing of the Resolution at the General Meeting and consent to any variation ofclass rights arising from that Resolution. General Meeting A notice convening a General Meeting of the Company to be held at 11.00 a.m. on22 April 2008 at 10 Crown Place, London EC2A 4FT was issued to shareholders inthe Circular today. At this meeting, a Resolution will be proposed to amend theArticles, redesignate Ordinary Shares as D Shares and Deferred Shares,repurchase the Deferred Shares and redesignate the D Shares as New Shares, allof which is necessary to effect the Conversion. Separate Class Meetings Notices convening Separate Class Meetings of the Ordinary Shareholders and DShareholders of the Company to be held at 11.15 a.m. and 11.30 a.m. respectivelyon 22 April 2008 were issued to shareholders in the Circular today. At thesemeetings, resolutions will be proposed to approve the Resolution to be proposedat the General Meeting and to consent to any variation of class rights resultingtherefrom. The quorum requirements for the Separate Class Meetings are for persons holdingnot less than one third of the paid up capital of the relevant share class to bepresent in person or by proxy. If the quorum is not present, the Separate ClassMeetings will be adjourned until 11.45 a.m. on 22 April 2007 in the case of theSeparate Class Meeting of Ordinary Shareholders and noon on that date in thecase of the D Shareholders. At the adjourned meeting those Shareholders presentwill constitute a quorum regardless of the number of Shares held. Recommendation The Board considers that the Resolutions to be proposed at the General Meetingand the Separate Class Meetings and the implementation of the Conversion on theterms referred to in the dispatched Circular are in the best interests of theCompany and its Shareholders as a whole. Accordingly, the Board recommend Shareholders to vote in favour of theResolutions to be proposed at the General Meeting and the Separate ClassMeetings. The Directors intend to vote in favour of all the Resolutions to be proposed atthe General Meeting and the Separate Class Meetings in respect of their ownbeneficial shareholdings, which as at 25 March 2008 totalled 131,913 OrdinaryShares and 14,235 D Shares (representing 0.45% of the issued Ordinary Sharecapital of the Company, 0.09% of the issued D Share capital of the Company and0.33% of the combined Share capital of the Company). 25 March 2008 For further information, please contact Andrew Buchanan and Kate Tidbury, CloseInvestments 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