Issue of Equity

RNS Number:2947Q
Aberforth Smaller Companies Tst PLC
29 September 2003



Aberforth Smaller Companies Trust plc

Proposals for the participation of the Company in the reconstruction of
Aberforth Split Level Trust plc

Introduction

The board of Aberforth Split Level Trust plc ("ASLeT") today announced proposals
for a scheme of reconstruction of ASLeT in advance of its planned winding up in
June 2004. It was also announced that New ASCoT Shares would be offered as one
of the roll over options for ASLeT Shareholders under the terms of the Scheme.

ASLeT is also managed by Aberforth Partners ("Aberforth") and its investment
portfolio is virtually identical to that of Aberforth Smaller Companies Trust
plc ("ASCoT").  The ASLeT assets received by ASCoT under the Scheme will
therefore be compatible with its existing portfolio.

Under ASLeT's articles, the directors of ASLeT are required to put a resolution
to the ASLeT Shareholders to consider the winding up or reconstruction of ASLeT
no later than 30 June 2004. Following discussions between the boards of ASCoT
and ASLeT and their respective advisers, it is proposed that ASLeT should be
wound up pursuant to a scheme of reconstruction and that ASLeT Shareholders
should be offered the opportunity to roll over their investment in ASLeT into
New ASCoT Shares. Under the Scheme, ASLeT Shareholders are also being offered
the opportunity to roll their investment into units in a unit trust, Aberforth
UK Small Companies Fund, or to realise their investment in ASLeT under the
Realisation Option.

Benefits of the Proposals for ASCoT

The Proposals provide an opportunity to increase ASCoT's net assets in a cost
efficient manner not otherwise available to ASCoT in present market conditions.
Such an increase will enhance ASCoT's profile by consolidating its position as
the largest investment trust in its sector and one of the largest investment
trusts overall. In turn, the enhanced size and profile of ASCoT may make it more
attractive to investors and may increase liquidity in ASCoT Shares. Furthermore,
ASCoT will be established as Aberforth's leading quoted product for accessing
the recognised smaller companies expertise at Aberforth and disruption to
ASCoT's underlying investment portfolio will be minimised by potentially
significantly reducing the amount of ASLeT's overlapping portfolio that requires
realisation through the market.

ASCoT's participation as a roll over option under the Scheme will not result in
any dilution to the net asset value of the Existing ASCoT Shares because:

*      the New ASCoT Shares being issued pursuant to the Scheme will be issued 
       at a price that is not lower than the net asset value (including
       all revenue reserves and current net revenue) of an Existing ASCoT Share;

*      the consideration received by ASCoT for the issue of New ASCoT Shares 
       will consist of a portfolio of investments from ASLeT which will be
       valued at mid prices;

*      ASLeT will bear all costs reasonably incurred by ASCoT in connection with 
       the implementation of the Scheme, including the stamp duty payable; and

*      Aberforth has agreed to bear any costs which ASCoT may incur and, for any 
       reason, not be able to recover from ASLeT should no New ASCoT Shares be 
       issued pursuant to the Scheme.

The Scheme

Details of the Scheme

Under the terms of the Scheme, ASLeT will be put into members' voluntary
liquidation and ASLeT Shareholders may:

*        roll over their investment into New ASCoT Shares (the '' ASCoT Option'');
         or

*        roll over their investment into units in Aberforth UK Small Companies 
         Fund (the ''AFund Option''); or

*        receive cash through an orderly realisation of the assets representing 
         their investment (the ''Realisation Option''); or

*        select any combination of the above as suits each ASLeT Shareholder's 
         personal investment requirements.

The Company's participation as a roll over vehicle under the terms of the Scheme
is conditional, however, on the ASCoT Shareholders passing resolutions to
approve the Company's participation in the Scheme and authorising the issue of
New ASCoT Shares at the Extraordinary General Meeting of ASCoT and the New ASCoT
Shares being admitted to the Official List and to trading on the main market of
the London Stock Exchange.

Realisation Pool

In addition to the investments which ASCoT will acquire pursuant to the Scheme,
it is possible that ASCoT may seek to acquire further investments for cash from
ASLeT's  Realisation Pool.

Dividends

Under the Scheme, in calculating the number of New ASCoT Shares to which an
ASLeT Shareholder electing for the ASCoT Option is entitled, the net asset value
of an ASCoT Share will include all ASCoT's revenue reserves and current net
revenue up to the ASCoT Calculation Date. Accordingly, ASLeT Shareholders who
acquire New ASCoT Shares shall be entitled to any dividends or distribution paid
by ASCoT with reference to a record date after the date of issue of the New
ASCoT Shares (including the dividend referred to below).

Whether or not the Proposals become effective, it is anticipated that the
Company's next dividend will be the final dividend for 2003 which, in the
absence of unforeseen circumstances, is anticipated to be 6.6p (as compared with
6.2p in the previous year) and is expected to be payable in March 2004. This is
an estimate calculated on the basis of certain assumptions, is for illustrative
purposes only and does not represent a forecast of profits.

FUTURE BOARD STRUCTURE

It is the Board's objective that it should be at the forefront of good corporate
governance. For that reason, it is the Board's wish to go beyond the current
minimum requirements of the Association of Investment Trust Companies and The
Combined Code by having all Directors seek re-election each year, rather than
every three years or after a specified term.

In addition, the Board wishes to alert Shareholders to some changes which, in
the absence of unforeseen circumstances, it expects to make to its composition,
including the appointment of Hamish Buchan, who is currently a director of
ASLeT.

By the time of the 2005 annual general meeting (which is expected to be held in
February of that year), William Hughes will have served Shareholders as Chairman
for 14 years; since ASCoT's inception. Mr Hughes will not seek re-election at
that 2005 annual general meeting and it is anticipated that David Shaw will then
assume the role of Chairman.

Keith Miller will not seek re-election at the annual general meeting expected to
be held in February 2004, having served Shareholders for 13 years; since ASCoT's
inception.

During 2004 a further independent Director will be sought in order to ensure the
Board comprises no less than five and no more than six members.

Extraordinary General Meeting

The Proposals require the approval of Shareholders. Accordingly, an
Extraordinary General Meeting of the Company will be held at 10.00 am on
Wednesday, 29 October 2003 at 14 Melville Street, Edinburgh EH3 7NS.

Dealings

Applications have been made to the UK Listing Authority for the New ASCoT Shares
to be admitted to the Official List and to the London Stock Exchange for the New
ASCoT Shares to be admitted to trading. If the Scheme becomes effective and all
the conditions of Issue are satisfied, it is expected that the New ASCoT Shares
will be admitted to the Official List on, and that the first day of dealings in
such shares on the London Stock Exchange will be, Tuesday, 11 November 2003.


Expected Timetable For The Company


Latest time for receipt of forms of proxy for use in relation          10.00 am on Monday, 27 October
to the Extraordinary General Meeting                                   2003

Extraordinary General Meeting                                          10.00 am on Wednesday, 29 October
                                                                       2003

ASCoT Calculation Date                                                 5.00 pm on Friday, 7 November 2003

Effective Date for implementation of the Scheme                        Monday, 10 November 2003

New ASCoT Shares issued and dealings commence in New ASCoT             Tuesday, 11 November 2003
Shares

New ASCoT Shares issued in uncertificated form credited to             Tuesday, 11 November 2003
stock accounts in CREST of ASLeT Shareholders entitled thereto

Certificates for New ASCoT Shares despatched                           Monday, 17 November 2003

Expected Timetable For The Scheme

First extraordinary general meeting of ASLeT to approve the            Wednesday, 29 October 2003
Scheme and announcement of the result of elections

Second extraordinary general meeting of ASLeT to put ASLeT into        Monday, 10 November 2003
liquidation and Effective Date of the Scheme


Enquiries:
David Warnock                      0131 220 0733
Aberforth Partners



David Ross                         0131 220 0733
Aberforth Partners



Gordon Young                       0131 220 0733
Aberforth Partners



David Holland                       0131 220 0733
Aberforth Partners



END

Capitalised words and expressions used in this announcement shall bear the same
meanings as in the prospectus, a copy of which will available in full from 30
September 2003 at the document viewing facility of the UK Listing Authority.






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            The company news service from the London Stock Exchange
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