FORESIGHT SOLAR & INFRASTRUCTURE VCT PLC ORD 1P Foresight Solar & Infrastructure Vct Plc : Announcement Of Posting Of Circula...

 
TIDMFTSV 
 
 
   Foresight Solar & Infrastructure VCT plc ("Company") 
 
   Announcement of Posting of Circular and opening of Tender Offer 
 
   Further to the announcement of 8 December 2016, the board of the Company 
("Board") is pleased to announce the publication of a circular to 
Shareholders containing details of a tender offer. 
 
   In November 2016, Ordinary Shareholders were invited to complete and 
return a Binding Indication of Preference form ("BIP Form"), indicating 
whether, they preferred to sell either all or half of their Ordinary 
Shares back to the Company or, instead, to retain their holding and 
continue to benefit from a tax-free dividend income stream. 
 
   The forms have now been collated and in order to give effect to the 
wishes of the respondents, the Company is now seeking Shareholder 
approval to conduct a tender offer to buy back a maximum of 30% of the 
Ordinary Shares in issue, being 11,487,258 Shares (the "Tender Offer"). 
The Tender Offer will allow the Company to return funds to Ordinary 
Shareholders who now wish to exit from their investment, in full or in 
part, as soon as possible, while allowing those Shareholders who wish to 
continue to hold their Shares to do so. The Board feels that the 30% 
limit is appropriate and should allow Shareholders who have indicated 
their desire to sell their Shares to do so whilst also providing some 
'headroom' to accommodate those Shareholders who were unable to respond 
to the previous communication but also wish to exit some or all of their 
investment 
 
   The Tender Offer is available to all Shareholders on the register at the 
Record Date and is subject to the passing of the Resolution to be 
proposed at the General Meeting to be held at 10:30 a.m. on 4 May 2017. 
 
   As the number of Ordinary Shares which may be repurchased pursuant to 
the Tender Offer is limited to a maximum of 30% of the Company's issued 
Ordinary Shares, in the event that Tender Forms are returned for a 
greater number of Shares than can be repurchased, Shareholders who 
returned their completed BIP Forms indicating they wish to sell some or 
all of their Shares will be given first priority. 
 
   Where Shareholders who did not return their BIP Form, or who indicated 
on their BIP Form that they wished to retain their Shares, return a 
Tender Form indicating that they wish to sell their Shares, their wishes 
will be accommodated as far as possible up to the Tender Offer limit of 
30% of the Ordinary Shares. Where such applications would exceed this 
limit, all such Shareholders applications shall be scaled back pro-rata 
to the number of Shares tendered. 
 
   The Tender Offer will be undertaken at the Tender Price, which will be 
calculated based on the most recently announced NAV per Ordinary Share 
prior to the Tender Date, adjusted for the estimated costs of the Tender 
Offer. 
 
   Summary Timetable 
 
 
 
 
Record Date for Tender Offer                                 Close of business 
                                                                 on 2 May 2017 
Latest time and date for receipt of forms of proxy         10.30 a.m. on 2 May 
 for the General Meeting                                                  2017 
Latest time and date for receipt of Tender Forms and        1.00 p.m. on 2 May 
 TTE Instructions                                                         2017 
Tender Offer closes                                         1.00 p.m. on 2 May 
                                                                          2017 
General Meeting of the Company                             10.30 a.m. on 4 May 
                                                                          2017 
Announcement of the results of the General Meeting          8.00 a.m. on 8 May 
 and take up level under the Tender Offer                                 2017 
Settlement date for the Tender Offer: cheques dispatched,       by 12 May 2017 
 assured payments made through CREST 
CREST accounts credited for revised holdings of Ordinary        by 12 May 2017 
 Shares 
Dispatch of balance share certificates for unsold               by 12 May 2017 
 Ordinary Shares 
 
 
   Performance Incentive Payment 
 
   The prospectus published by the Company in 2010 in respect of the 
original Ordinary Share offer included details of the performance 
incentive arrangements the Company had entered into with Foresight, its 
investment manager. In summary, Foresight is entitled to receive 20% of 
distributions in excess of 100p (per Ordinary Share issued and remaining 
in issue) until distributions reach 130p (per Ordinary Share issued and 
remaining in issue) and 30% of distributions above that level. 
 
   At the time of publication, it was envisaged that, if the Company's 
Ordinary Share fund achieved these targets, this incentive would become 
payable shortly after the five-year minimum holding period following a 
share buyback for those wishing to exit at that point combined with an 
'enhanced buyback' for those wishing to remain invested. The effect, 
irrespective of the outcome of these corporate actions, would have been 
for Foresight to receive its performance fee based on any outperformance 
at that date on all the Ordinary Shares in issue. The total amount of 
the potential performance fee, based on a Total Return of 135.3p (using 
figures as at 31 December 2016) would have been approximately GBP2.9 
million, as is currently accrued in the accounts of the Company (the 
"Performance Incentive Payment"). As at 31 December 2016, the Total 
Return attributable to Ordinary Shares, prior to payment of the 
Performance Incentive Payment was 135.3p and, immediately after it is 
paid, will be 127.7p. 
 
   In the meantime, however, the VCT regulations have been changed to 
prevent the issue of new shares pursuant to an 'enhanced buyback'. 
Whilst this change has had no impact on the quantum of the performance 
incentive due to Foresight, it does delay the time at which it is 
triggered. 
 
   Enhanced buybacks were typically structured so that a shareholder might 
subscribe for a number of shares ('Substitution Shares") equal in number 
to the number of his existing shares and to finance his subscription a 
Shareholder would be invited to sell his existing shares back to the VCT 
at their current net asset value. The Shareholder would then claim 
additional VCT relief of up to 30% of the amount of his new subscription 
and, under the terms of the performance incentive arrangements the 
amount paid by the Company to buyback the exiting shares would rank as a 
distribution triggering an entitlement to performance incentive fees to 
the extent that the amount paid, when added to previous dividends 
exceeded the 100p and 130p hurdles mentioned above. 
 
   The Board considers that Foresight, as the Company's manager, has 
performed well in bringing the Company to the point where Ordinary 
Shareholders can be offered a major liquidity event in excess of the 
performance targets originally set. As such, we are recommending that, 
as part of the arrangements for the Tender Offer, Ordinary Shareholders 
approve an amendment to the Company's performance incentive agreement so 
that Foresight become entitled to a full payment of its performance fee 
as if the original intention of effecting a corporate action for 
continuing Ordinary Shareholders as well as a share buyback for those 
who wish to exit were still capable of being implemented. Accordingly, 
it is proposed to amend the performance incentive arrangements so that 
the definition of what constitutes a 'distribution' is extended to 
include the amount which could have been returned to each Ordinary 
Shareholder had an enhanced buyback been effected on the same date as 
the share buyback. 
 
   The most recently announced NAV of an Ordinary Share is 101.7p (which 
takes into account a 7.6p per Ordinary Share accrued Performance 
Incentive Payment to the Manager) and, assuming no significant event 
occurs prior to the buyback of the Ordinary Shares from those who wish 
to exit, this NAV when added to dividends paid in the past (see table 
below) this will amount to a Total Return for continuing shareholders of 
135.3p per Ordinary Share (reducing to 127.7p once the Performance 
Incentive Payment is made) which is in excess of the hurdle of 100p. 
Therefore, it is proposed that in addition to the performance fee which 
will become payable in respect of the Total Return in respect of the 
Ordinary Shares bought back from those wishing to exit, subject to the 
approval of Shareholders, a performance fee payment should be made to 
Foresight in respect of the continuing Shareholders equal to 20% of the 
excess Total Return (NAV plus distributions paid in the past) above 100p 
per share and 30% of the excess above 130p per share. This additional 
payment is estimated to amount to be GBP2.17 million in total but will 
be adjusted for any intervening change of the NAV per Ordinary Share and 
will be paid on the same date on which performance fee payment is made 
following the buyback. 
 
 
 
 
Foresight Solar & Infrastructure VCT - Ordinary Share 
 Dividend history to financial period ended 30 September 
 2016 
                                Amount of Dividend 
Date of dividend             (pence per Ordinary Share) 
31 October 2012                                         2.5 
12 April 2013                                           2.5 
25 October 2013                                         3.0 
4 April 2014                                            3.0 
14 November 2014                                        3.0 
10 April 2015                                           3.0 
13 November 2015                                        3.0 
8 April 2016                                            3.0 
18 November 2016                                        3.0 
 
  Total                   26.0 
 
 
   As part of discussions on this matter, the Board has negotiated to 
replace the existing hurdle with a new growth hurdle before any further 
performance incentive payments are due, subject to the approval by 

Shareholders of the variation noted above. If this is implemented, the 
Total Return threshold of 130p per Ordinary Share will no longer be a 
fixed target but will increase by a simple 5% per annum going forward: 
136.5p for the Company's financial year ending 30 June 2018, 143p for 
the year ending 30 June 2019 and so on. 
 
   For example, and assuming the total return per Ordinary Share following 
the close of the Tender Offer stands at 130p exactly, should a 
distribution be made during the year ending 30 June 2018 which results 
in a Total Return of 133p being achieved, no performance incentive 
payment will be made to the Manager. However, if a distribution is made 
during the same year which results in a Total Return of 138p being 
achieved, the Manager will be entitled to a performance incentive 
payment equal to 30% of the 1.5p per share by which the increased hurdle 
is beaten. 
 
   The Manager is regarded as a related party of the Company under the 
Listing Rules. Therefore, the entering into of the amended performance 
incentive agreement constitutes a related party transaction for the 
purpose of the Listing Rules and requires Shareholders' approval. 
 
   A copy of the Circular will be shortly available for inspection on both 
the Foresight Group LLP website (www.foresightgroup.eu) as well as at 
the National Storage Mechanism (www.morningstar.co.uk/uk/nsm). 
 
   For further information, please contact: 
 
   Gary Fraser 
 
   Foresight Group LLP 
 
   Telephone: [phone] 
 
   This announcement is distributed by Nasdaq Corporate Solutions on behalf 
of Nasdaq Corporate Solutions clients. 
 
   The issuer of this announcement warrants that they are solely 
responsible for the content, accuracy and originality of the information 
contained therein. 
 
   Source: Foresight Solar & Infrastructure VCT plc via Globenewswire 
 
 
  http://www.foresightgroup.eu/ 
 

(END) Dow Jones Newswires

March 22, 2017 18:48 ET (22:48 GMT)

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