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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Aber.GD.C&I | LSE:AFHI | London | Ordinary Share | GB0031100034 | INC SHS 1P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 100.50 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
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0 | 0 | N/A | 0 |
TIDMAFHI 28 June 2011 Aberforth Geared Capital & Income Trust plc (the "Company") Publication of Circular Highlights * The Company has reached agreement in principle with Aberforth Geared Income Trust plc ("AGIT") on the terms of the reconstruction and winding up of the Company, under which AGIT will act as a rollover option for investors in the Company. * Under the terms of the proposed reconstruction, Capital Shareholders and Income Shareholders (other than Overseas Holders) will be able to exchange some or all of their investment in the Company for ordinary shares in AGIT and/or to realise some or all of their investment in the Company for cash. * Among other benefits, the Proposals offer Shareholders who wish to realise some or all of their investment the potential opportunity to do so at close to NAV and more quickly than would be anticipated under a straightforward liquidation. * The Company expects to pay a final interim dividend to Income Shareholders of not less than 12p per Income Share, with any income received by the Company after the Effective Date being paid out to Income Shareholders by the Liquidators as capital by 30 September 2011. Introduction Further to the announcement made by the Company on 21 April 2011, the Company has reached agreement in principle with Aberforth Geared Income Trust plc (" AGIT") on the terms of the reconstruction and winding up of the Company, under which AGIT will act as a rollover option for investors in the Company. AGIT is a split capital investment trust which was launched in 2010 and is also managed by the Company's investment manager, Aberforth Partners LLP. Accordingly, the Company has today issued a circular (the "Circular") to its shareholders (the " Shareholders") in connection with recommended proposals for the winding up and reconstruction of the Company (the "Proposals"). Under the terms of the proposed reconstruction, Capital Shareholders and Income Shareholders (other than Overseas Holders) will be able to exchange some or all of their investment in the Company for ordinary shares in AGIT and/or to realise some or all of their investment in the Company for cash. Overseas Holders will, if the Proposals become effective, receive cash in respect of their holdings. Under the terms agreed with AGIT (but subject to the success of a placing and offer for subscription by AGIT to finance in part the portfolio acquisition), AGIT would acquire part or all of the Company's investments at bid prices, the consideration to be satisfied in part by the issue of New AGIT Ordinary Shares to Shareholders electing to roll over their investment into AGIT, with the balance being payable by AGIT to the Company in cash. Under the Proposals, Income Shareholders will be entitled to elect to receive an amount in cash which is equal to their entitlement under the Articles of Association on a straightforward winding up of the Company (being a maximum entitlement of 100p per Income Share plus their share of all the Company's undistributed revenue reserves and net current revenue). This being the case, in accordance with the Articles, Income Shareholders are not entitled to vote on the Proposals. Shareholders (other than, in each case, Overseas Holders) who do not make a valid election under the Proposals will be deemed to have elected for New AGIT Ordinary Shares. Accordingly, Shareholders who wish to receive New AGIT Ordinary Shares under the Proposals in respect of their entire holding of Shares need not submit a Form of Election. Overseas Holders will, if the Proposals become effective, receive cash in respect of their holdings. In determining the structure and timing of the Proposals, the Board has to balance the interests of the Capital Shareholders and the Income Shareholders. The Proposals enable the Company to remain substantially fully invested, and therefore generating dividend income, up to the proposed winding up date in August 2011. But for the Proposals, the Board would already have commenced the realisation of the Company's investments in advance of the final winding up date in December 2011 and this would have resulted in a significant reduction in the dividend income otherwise received by the Company. A straightforward liquidation of the Company (in the absence of a rollover alternative) would require the Company's investment portfolio to be realised in the market, potentially at a material cost, in advance of 31 December 2011, the date on which the Company's bank borrowings are due to be repaid. Under the Proposals, it is anticipated that substantially all of the investments of the Company will be transferred to AGIT at significantly lower cost to Capital Shareholders than would be the case under a straightforward liquidation. In addition, Income Shareholders are expected to receive their fixed capital entitlement, which is expected to be 100p (either in cash or in the form of New AGIT Ordinary Shares), and the final dividend payments sooner than would be the case under a straightforward liquidation ahead of a planned winding up date of 31 December 2011. It is estimated that the costs of realising the Company's investment portfolio by way of a straightforward liquidation (in addition to the relevant fixed costs) would be in excess of three per cent. of the Company's net assets. On this basis, it is estimated that a straightforward liquidation could result in a reduction in the NAV per Capital Share of 7.1 per cent. On the basis of the respective values of the assets of the Company and of AGIT as at 23 June 2011 and on the assumption that AGIT raises sufficient cash under the AGIT Placing and Offer to acquire the Company's entire investment portfolio, the costs of the Proposals which are to be incurred by the Company would be expected to represent a reduction in the NAV per Capital Share of less than one per cent. Information on Aberforth Geared Income Trust plc AGIT is a split capital investment trust which invests in a diversified portfolio of small UK quoted companies. Aberforth is also the investment manager of AGIT. At the date of this announcement, AGIT had 45,000,000 AGIT Ordinary Shares and 30,000,000 AGIT ZDP Shares in issue. The NAV per AGIT Ordinary Share at 23 June 2011 was 113.0p and the NAV per AGIT ZDP Share was 107.8p. Its aggregate market capitalisation at that date was GBP85.1 million and it had unaudited net assets attributable to all Shareholders (with current year income) of GBP83.2 million. AGIT has a planned life lasting until 30 June 2017. Benefits of the Proposals The Directors consider that the Proposals have the following benefits for Shareholders participating in the Scheme: * they offer Shareholders the opportunity to roll over their investments in a tax efficient manner (without incurring an immediate liability to UK capital gains tax) into AGIT Ordinary Shares; * they enable Shareholders to maintain their exposure to a diversified portfolio of small UK quoted companies through a closed-ended investment vehicle without incurring significant reinvestment costs or portfolio reorganisation costs; * they enable Shareholders who elect for the Rollover Option to continue to benefit from the management expertise of Aberforth; * they offer Shareholders who wish to realise some or all of their investment the potential opportunity to do so at close to NAV and more quickly than would be anticipated under a straightforward liquidation; * they avoid the need to realise all of the Company's small cap investment portfolio in the market, to the extent that all or part of it is transferred to AGIT under the Proposals, thereby saving potential realisation costs which would otherwise be borne by Capital Shareholders; and * the Proposals would enable the Company to remain substantially fully invested and geared up to the Effective Date and to generate income on its portfolio for the benefit of Income Shareholders. Costs and expenses Under the Proposals, the Company will bear all of its own and AGIT's costs in relation to the Proposals net of any premium on the issue of new AGIT ZDP Shares under the AGIT Placing and Offer. On the basis of the respective values of the assets of the Company and of AGIT as at 23 June 2011 and on the assumption that AGIT raises sufficient cash under the AGIT Placing and Offer to acquire the Company's entire investment portfolio, it is estimated that the costs of the Company (which would be borne entirely by the Capital Shares) would be GBP223,000 in aggregate (amounting to 2.1p per Capital Share). It should be emphasised that these figures are given for illustrative purposes only and should not be regarded as a forecast of the actual costs which will be borne by Capital Shareholders under the Proposals. If AGIT does not raise sufficient cash under the AGIT Placing and Offer to acquire the Company's entire investment portfolio, then Capital Shareholders who elect for the Cash Option will bear the costs of realising the remaining part of the investment portfolio which is not acquired by AGIT. If the Proposals do not become effective, the Company will bear abort costs estimated at approximately GBP210,000 (including irrecoverable VAT) (amounting to 2.0p per Capital Share). Proposed interim dividend The Directors propose that, subject to the approval of the Scheme at the First Meeting, the Company should pay a final interim dividend to Income Shareholders on the Register at the close of business on 29 July 2011. This dividend, which is expected to be not less than 12p per Income Share, will represent as near as practicable (to the extent expected to be received in cash prior to the Effective Date) the entire revenue reserves and net current revenue of the Company and will be paid prior to the implementation of the Proposals. The Shares will go ex dividend on 27 July 2011. It is expected that the dividend will be announced on 25 July 2011. It is expected that any income received by the Company after the Effective Date will be paid out to Income Shareholders by the Liquidators as capital by 30 September 2011. General Meetings As noted above, in accordance with the Articles, Income Shareholders are not entitled to vote on the Proposals. The implementation of the Proposals will, therefore, require Capital Shareholders to vote in favour of resolutions to be proposed at general meetings of the Company (the "General Meetings") which have been convened for 10.00 a.m. on 25 July 2011 and 4.30 p.m. on 9 August 2011. The notices convening the General Meetings, which set out in full the terms of the resolutions which are to be proposed, are set out in the Circular. The General Meetings will be held at the offices of Aberforth Partners LLP, 14 Melville Street, Edinburgh EH3 7NS. EXPECTED TIMETABLE All references are to UK time. 2011 Latest time and date for receipt of forms of 10.00 a.m. on Thursday, 21 July proxy for the First Meeting Time and date from which it is advised that 8.00 a.m. on Monday, 25 July dealings in Shares should only be for cash settlement and immediate delivery of documents of title First Meeting 10.00 a.m. on Monday, 25 July Proposed final interim dividend announced Monday, 25 July Ex-dividend date for the Shares Wednesday, 27 July Latest time and date for receipt of Forms of 1.00 p.m. on Wednesday, 27 July Election or TTE instructions from Shareholders Record Date for the Scheme the close of business on Wednesday, 27 July Shares disabled in CREST 7.30 a.m. on Thursday, 28 July Record date for the proposed final interim the close of business on dividend Friday, 29 July Calculation Date the close of business on Wednesday, 3 August Latest time and date for receipt of forms of 4.30 p.m. on Friday, 5 August proxy for the Second Meeting Payment of the proposed final interim by Monday, 8 August dividend Amendment to the Official List and dealings 8.00 a.m. on Monday, 8 August in Reclassified Shares commence on the London Stock Exchange Dealings in Reclassified Shares suspended 7.30 a.m. on Tuesday, 9 August Second Meeting 4.30 p.m. on Tuesday, 9 August Effective Date for implementation of the Tuesday, 9 August Proposals and commencement of the liquidation of the Company Admission to listing of the New AGIT Ordinary 8.00 a.m. on Wednesday, 10 Shares and of the new AGIT Shares to be August issued pursuant to the AGIT Placing and Offer New AGIT Ordinary Shares issued in 8.00 a.m. on Wednesday, 10 uncertificated form credited to CREST August accounts of Shareholders under the Scheme AGIT Ordinary Shares issued in uncertificated 11.00 a.m. on Wednesday, 10 form credited to CREST accounts of new AGIT August Shareholders under the Placing and Offer CREST payments made in respect of cash Thursday, 11 August entitlements of Shareholders under the Scheme Cheques despatched to Shareholders in respect Thursday, 11 August of cash entitlements under the Scheme Definitive certificates in respect of New week commencing Monday, 15 AGIT Ordinary Shares issued in certificated August form pursuant to the Scheme despatched to Shareholders entitled thereto Cancellation of listing of the Reclassified 9 August 2012 Shares Each of the times and dates in the above expected timetable (other than in relation to the Meetings) may be extended or brought forward without further notice. If any of the above times and/or dates changes, the revised time(s) and /or date(s) will be notified to Shareholders by an announcement through a Regulatory Information Service provider. Words and expressions defined in the Circular have the same respective meanings in this announcement. Enquiries: Aberforth Partners LLP David Ross 0131 220 0733 John Evans Alan Waite Dickson Minto W.S. Douglas Armstrong 020 7628 4455 A copy of the Circular has been submitted to the National Storage Mechanism and will shortly be available for inspection at http://www.hemscott.com/nsm.do For the avoidance of doubt, the Register will remain open until the Effective Date. Reclassified Shares are a technical requirement of the Scheme and will be created if the resolution to be proposed at the First Meeting is passed and becomes effective. END
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