Establishment Inv. Trust PLC (The) Update on continuation of the Company (9704V)

TIDMET.

RNS Number : 9704V

Establishment Inv. Trust PLC (The)

12 April 2019

This announcement contains inside information

12 April 2019

The Establishment Investment Trust plc (the "Company" or "EIT")

LEI: 213800I9IT25LOQ1UW49

Update on continuation of the Company

The board of the Company (the "Board") and investment manager announced on 20 November 2018 that they will not recommend that shareholders vote in favour of continuation of the Company in its current form when the continuation vote is put forward at the next Annual General Meeting and invited proposals to be submitted for alternative plans for the Company's future.

The Board received a pleasing number of proposals and, following a review of the options available, the Board today announces that it intends to put forward proposals (the "Proposals") to put the Company into voluntary liquidation and to offer shareholders the option of electing for any or a combination of:

-- the default option of rolling some or all of their investment into new shares at formula asset value ("FAV") to be issued by Henderson International Income Trust plc ("HINT"), and/or

-- rolling some or all of their shares into shares to be issued by VT Garraway Asian Centric Global Growth Fund; and/or

   --      receiving cash at net asset value less costs. 

Certain members of The Thornton family, and trustees of Thornton family trusts, whose aggregate holdings amounting, in aggregate, to 7,581,964 ordinary shares in EIT, equivalent to 37.9 per cent. of the Company's issued share capital, have indicated their support for the Proposals.

HINT is a closed-ended investment trust that seeks to provide shareholders with a growing total annual dividend, paid quarterly, as well as capital appreciation. It is designed to help UK investors diversify their equity income streams by investing in a focused and internationally diversified portfolio of 50-80 companies outside the UK. HINT invests in undervalued companies that are out of favour which pay investors a dividend income whilst they wait for value to be realised. Ben Lofthouse is the lead fund manager.

VT Garraway Asian Centric Global Growth Fund (the "Garraway Fund") is a proposed new open-ended investment company which aims to provide shareholders with capital growth and income over the longer term. It will invest in a diversified global portfolio of equities, combining both developed and emerging markets exposure; along with the flexibility to invest in government bonds and precious metal ETFs. A quarterly dividend will be paid. The fund management team will be Malcolm Schembri, Tim Hall, Darran Goodwin and Henry Thornton. Henry is presently at Blackfriars Asset Management, the Company's outgoing investment manager and will be joining Garraway Capital Management as a fund manager, responsible for Asian equities.

Each of the Company, HINT and the Garraway Fund will bear its own costs in respect of the Proposals save that EIT will cover the cost of posting the HINT prospectus, and the particulars relating to the Garraway Fund, to EIT shareholders. New shares in HINT to be issued on a FAV for FAV basis (with FAV being the net asset value per share (including current year income) as at the calculation date less any costs in relation to the proposals not accrued). In addition, HINT's manager will contribute 18 months of management fees on the funds that roll over from EIT to HINT (the "Contribution"). The Contribution will be used first to defray HINT's costs with any balance being passed to EIT as a contribution to its costs (for the benefit of the HINT rollover pool). The Contribution will be calculated once the shareholder elections are known and the portion which equates to HINT's costs will be deducted from the next quarterly management fee invoice to HINT. Any balance will then be paid to EIT.

The Board has signed heads of terms with the boards of both HINT and the Garraway Fund. The Proposals have been agreed in principle and will be effected by way of a scheme of reconstruction of EIT under section 110 of the Insolvency Act 1986, resulting in the voluntary liquidation of EIT and a tax efficient rollover of assets of EIT into HINT or the Garraway Fund. The transaction would be subject to, inter alia, regulatory consent and approval from shareholders of EIT and HINT. EIT shareholders who do not make an election will be deemed to have elected to receive their entitlements in new shares to be issued by HINT. Neither the option to roll into HINT nor into the Garraway Fund are subject to a minimum rollover amount.

A circular convening a general meeting to seek approval for the proposals is expected to be sent to EIT shareholders in due course. In the meantime, further updates will be provided as appropriate.

Enquiries:

   Henry Willcocks / Robert Finlay                                                020 7601 6100 

Shore Capital

Broker

Anthony Lee

   PraxisIFM Fund Services (UK) Limited                                      020 7653 9690 

Company Secretary

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April 12, 2019 02:00 ET (06:00 GMT)