Circ re Proposed Winding Up

RNS Number:6994L
Edinburgh UK Small Co Track Tst PLC
07 November 2006

Edinburgh UK Smaller Companies Tracker Trust PLC

7 November 2006


Introduction

On 3 October 2006 the Board of Edinburgh UK Smaller Companies Tracker Trust PLC
announced proposals for the voluntary winding-up of the Company ("the Proposals").

The Board has today written to Shareholders detailing the Proposals and
convening the necessary extraordinary general meeting to approve the same.


Background to, and summary of, the Proposals

At the time of the Company's tender offer announced in September 2005, the Board
noted that notwithstanding the commitment to return up to 20 per cent. of the
Company's share capital by way of an annual tender offer, it was aware that some
Shareholders would benefit from the ability to exit a larger proportion of their
holding in the Shares than might otherwise be available under the tender offer.
It stated that it was the Board's intention to put proposals to Shareholders
which would allow them to exit all of their holding in shares in the Company for
cash before the end of 2006.

Over the last few months the Board has conducted a review of the alternatives
available for the future of the Company. The Board has considered a variety of
possible alternatives available to it, including making available a successor
vehicle into which some of the Company's assets could be transferred.

The Board has made contact, through the Company's broker and Manager, with
Shareholders holding a majority of the Company's Shares to obtain their views.
As a result the Board has concluded that proposals should be put to Shareholders
providing for a simple voluntary winding-up of the Company. In reaching this
conclusion, the Directors were mindful of the feedback they have received from
Shareholders, the costs that would be associated with offering a successor
vehicle and the potential tax implications for both institutional and private
shareholders.


The Proposals

Under the Proposals, the Company will be put into liquidation by means of a
voluntary winding-up pursuant to the provisions of section 84(1)(b) Insolvency
Act 1986. The winding-up of the Company will become effective immediately upon
the passing of the special resolution put at the EGM.

After payment of all known liabilities, the Liquidators have indicated that an
amount estimated to be sufficient to meet all the unknown liabilities of the
Company will be required to be retained by the Company. Whilst the final amount
is not yet determinable, the retention is likely to be not less than #50,000.
The Liquidators have also indicated that they anticipate being in a position to
distribute the majority of the net cash proceeds arising from the liquidation of
the Company to Shareholders no later than 21 December 2006, following
realisation of the Company's portfolio, assuming that the liquidation of the
Company is approved at the EGM on 30 November 2006. The remainder of the cash
proceeds, including the Liquidators' retention, will be distributed after paying
the costs of the Company's liquidation and settling all other liabilities of the
Company. The precise timing of this second and any further distribution will
depend upon the Liquidators establishing that the Company has no outstanding
liabilities.


Portfolio Realisation Process

The Liquidators (or the Manager on the Liquidators' behalf) will seek to
undertake an orderly realisation of the Company's portfolio and thereby maximize
the cash value returned to Shareholders under the winding-up. To assist with
this process the Manager may take steps to commence the realisation of some of
the portfolio prior to the Effective Date. It is intended that assets will be
realised such that cash payments in respect of the initial liquidation
distribution can be made to Shareholders no later than 21 December 2006.

For illustrative purposes only, on the basis of the unaudited Net Asset Value as
at 3 November 2006 (being the last practicable date prior to the date of this
announcement) of 295.72 pence per Share the Directors estimate that the amount
of initial distribution would be approximately 294.90 pence per Share (after
taking account of the liquidation expenses payable by the Company and the
retention made by the Liquidators but excluding portfolio realisation costs).

The estimated entitlement noted above is provided for illustrative purposes only
and the actual entitlement will depend on the realised net asset value at the
time of the liquidation.


Composition of the Portfolio

It is the Board's intention that, from the date of this announcement until the
Effective Date, the daily announcement of Net Asset Value will include an
indication of the proportion of the portfolio held in UK equities and the
proportion held in cash. As at 3 November 2006 (the latest practicable date
prior to the date of this announcement), 98.7 per cent. of the Company's
portfolio was held in UK equities, and 1.3 per cent. in cash.


Interim Dividend

The Board has announced an interim dividend of 2.5 pence per Share in respect of
the year ending 31 March 2007 to be paid on 27 November 2006 to Shareholders on
the register at the close of business on 17 November 2006. It is not the current
intention of the Directors to pay any further dividend in respect of the period
from 1 April 2006 to the Effective Date although further dividends will be paid
to the extent required to enable the Company to retain its investment trust
status.


Notice of Extraordinary General Meeting

The Proposals require the approval of Shareholders at the EGM. At the
Extraordinary General Meeting, a special resolution will be proposed for the
members' voluntary winding-up of the Company, to appoint the proposed
Liquidators and fix their remuneration, and instruct the Company Secretary to
hold the books of the Company to the Liquidators' order. A second resolution,
which is conditional on the passing of the first resolution, is being proposed
as an extraordinary resolution to confer appropriate powers on the Liquidators
at the EGM. Each of the Resolutions will require the approval of a majority of
three quarters of the votes cast.


Action proposed if Resolutions not Passed

If the Resolutions to be proposed at the EGM are not approved by the
Shareholders the Company will not be wound up. Shareholders should note that the
Company does not currently comply with certain Listing Rules requirements
regarding the level of shares in public hands. Accordingly, if the Company is
not wound up, the listing of the Ordinary Shares may be suspended and then
cancelled which will have a negative impact on the tax status of the Company. In
this event the Board will review the options available and will write to
Shareholders as soon as practicable.

Copies of the Circular have been submitted to the UK Listing Authority and will
shortly be available for inspection at the UK Listing Authority's Document
Viewing Facility which is situated at:


Financial Services Authority
25 The North Colonnade
Canary Wharf
London
E14 5HS

Tel. no. 020 7066 1000







EXPECTED TIMETABLE
                                                                    2006
Latest time for receipt of the Letter of Direction from Aberdeen    5.00 p.m. on 23 November
Plan Participants

Date from which it is advised that dealings in Shares should only   24 November
be for cash settlement and immediate delivery of documents of title

Latest time for receipt of forms of proxy for the Extraordinary     11.30 a.m. on 28 November
General Meeting

Company's register of members closes                                5.00 p.m. on 29 November

Listing of Shares suspended                                         7.30 a.m. on 30 November

Extraordinary General Meeting                                       11.30 a.m. on 30 November

Effective Date and appointment of Liquidators                       30 November

Expected first cash distribution to Shareholders                    No later than 21 December


Terms used in this announcement shall, unless the context otherwise requires,
bear the meaning given to them in the Circular issued by Edinburgh UK Smaller
Companies Tracker Trust PLC dated 7 November 2006.


Enquiries

Gary Jones                                           0131 313 6393

Aberdeen Asset Managers Limited

David Benda/Kathryn Standley                         020 7621 5557

Winterflood Investment Trusts




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