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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Investec H.I.T. | LSE:ICH | London | Ordinary Share | GB0030197460 |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 31.50 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
TIDMICH TIDMINH 25 February 2009 Investec High Income Trust PLC Investec High Income Securities PLC PROPOSED VOLUNTARY WINDING-UP OF Investec High Income Trust plc ("THE COMPANY") AND Investec High Income Securities plc ("THE SUBSIDIARY") The Company announced on 14 January 2009 that given the substantial reduction in assets following the maturing of the bank debt and the planned winding up of the Subsidiary and the repayment of its zero dividend preference shares in March 2009, the most sensible strategy to adopt was to wind up the Company and that, accordingly, a resolution would be put to shareholders on 20 March 2009 proposing to wind up the Company. A circular has now been sent to shareholders in the Company and the Subsidiary outlining the proposals relating to the liquidation of the Companies. Background to and reasons for the Proposals The Company was incorporated on 28 February 2001. It was launched in March 2001 as an investment company with the objective of generating a high and growing level of income with the potential for capital growth from a portfolio principally invested directly or indirectly in equities. The Subsidiary was incorporated on 28 February 2001 as an investment company. It is a special purpose subsidiary formed solely to issue the ZDP Shares and lend the proceeds of such issue to the Company. The Subsidiary's ZDP Shares carry an entitlement to be redeemed at a fixed price of 195.54p per ZDP Share, such amount representing an accrued capital entitlement for the period to 20 March 2009. Pursuant to a Subscription Agreement dated 22 March 2001, in consideration of a loan made to the Company by the Subsidiary, the Company agreed to ensure that the Subsidiary would have sufficient assets on 20 March 2009 to satisfy the final capital entitlements of ZDP Shareholders. Once the ZDP Shareholders' entitlements are repaid there will be a relatively small pool of assets remaining. It is not efficient to manage such a small pool of assets and accordingly, as previously indicated in the interim report and accounts of the Company for the six month period to 30 September 2008, in the circumstances the Board considers that the best course of action is to place the Company into liquidation. The Proposals It is proposed that the Subsidiary and the Company be placed into members' voluntary liquidation on 20 March 2009 and that Laura Waters and Richard Setchim of PricewaterhouseCoopers LLP be appointed liquidators of the Company and the Subsidiary. The payment of fees to the Directors will cease from that point and no payments for loss of office will be made. Under the Proposals, the Subsidiary and the Company will be wound up by means of a members' voluntary liquidation in accordance with their respective Articles and pursuant to the provisions of section 84(l)(b) of the Insolvency Act 1986. The winding up of each of the Company and the Subsidiary will become effective immediately upon the passing of the Resolutions to be proposed at the General Meeting of each company. As at the close of business on 19 February 2009, the unaudited net assets of the Company, after accounting for the final capital entitlement of the ZDP Shareholders, were GBP10,040,000. At this date, the Company had GBP10,602,000 in liquid assets, and GBP16,914,000 in cash. The Company currently has sufficient assets to enable it to transfer, on or before 20 March 2009, enough cash to the Subsidiary to enable the Subsidiary to satisfy payment of the ZDP Shareholders' entitlements. If Shareholders vote in favour of the Proposals, on the liquidation of the Company and the Subsidiary, the Liquidators will set aside sufficient liquid assets in a Liquidation Fund to meet the Company's and the Subsidiary's liabilities including the costs of the Proposals. The Liquidation Fund will include a Retention which will be set at an amount that the Liquidators consider sufficient to meet any unascertained and unknown liabilities of the Company and the Subsidiary. This Retention is currently expected not to exceed GBP50,000. The expenses, including VAT, incurred in relation to the Proposals (including all printing costs, postage costs, professional advice and the Liquidators' fees) are currently estimated to amount to approximately GBP90,000 (equivalent to approximately 0.003p per Share). The Liquidators intend to satisfy the ZDP Shareholders' entitlement in accordance with the Subsidiary's Articles as soon as practicable after the Subsidiary is placed into liquidation. It is intended that ZDP Shareholders will receive their entitlement of 195.54p per ZDP Share in the week commencing 23 March 2009. Once this entitlement is paid, it is not anticipated that there will be any other assets in the Subsidiary available for distribution to the Company as the only Ordinary Shareholder in the Subsidiary. Under section 107 of the Insolvency Act 1986, the Liquidators have a statutory duty to pay the Company's liabilities before distributing surplus assets to the Company's Shareholders. As part of that duty, the Liquidators must advertise to ascertain whether the Company has any creditors, as provided under Rules 4.182A and 11.2 of the Insolvency Rules 1986. In practice this advertisement for creditors' claims requires one month's notice. Accordingly, it is intended that on the expiry of the creditors' claims period, the Liquidators will make an initial distribution to Ordinary Shareholders in the Company. Accordingly, the Liquidators intend to make an initial and main liquidation distribution to the Company's Shareholders in the week commencing 27 April 2009. Assuming no change in the net asset value of the Company, the Board estimates that, after allowing for the provisions detailed above and the VAT recoveries referred to below, the first cash distribution will be approximately 35.9p per Ordinary Share in the Company. Reclaim of VAT on management fees A test case (the "AIC case") was brought by the Association of Investment Companies (the "AIC") and JPMorgan Fleming Claverhouse Investment Trust plc with regard to the VAT treatment of fees relating to the management of investment trusts. Unlike the position regarding UK authorised unit trusts and UK open-ended investment companies, fees relating to the management of the assets of investment trusts were subject to value added tax at the standard rate. The AIC and JPMorgan Fleming Claverhouse Investment Trust plc won their case against HM Revenue & Customs ("HMRC") to establish that investment trusts are and should previously have been exempt from VAT on management fees. In view of this, managers can make a claim to HMRC for repayment of overpaid VAT which they have charged to investment trusts. HMRC will only refund to managers the net VAT which the manager paid to HMRC, i.e. the VAT charged to investment trusts less related VAT incurred by the manager, which the manager would previously have deducted on the basis that its fees were subject to VAT. As a result, Investec Investment Management Limited has agreed to pay the Company GBP294,000 by way of repayment of VAT paid under a mistake of law and this amount (less any appropriate provision for corporation tax) will be included in the initial distribution to Shareholders in the Company. To the extent that the total amount Investec Investment Management Limited is able to recover from HM Revenue and Customs in respect of VAT paid under a mistake of law by the Company (inclusive of interest) exceeds GBP294,000, such excess will be paid into the Liquidation Fund. The Subsidiary did not incur such investment management fees and is not subject to such recoveries. Third and Final Dividend In order to ensure the Company's continuing compliance with section 842 of the Income and Corporation Taxes Act 1988 and thus the retention of its investment trust status for the period up to the date on which the Liquidators are appointed, the Board has declared a final interim dividend on the Ordinary Shares of the Company of 1.24p per Ordinary Share of the Company. This dividend will be paid on 19 March 2009 to Shareholders on the Register as at 27 February 2009. Arrangements with the Company's and Subsidiary's service providers Assuming the Proposals proceed, all arrangements with the Company's and Subsidiary's service providers will be terminated upon the Company and Subsidiary being placed into liquidation or when any services being performed in connection with the Proposals have been completed. No compensation is payable in connection with the termination of these contracts. Dealings, settlement and cancellation of listing The Registers will be closed and the Shares will be disabled in CREST at the close of business on 18 March 2009 and, to be valid, all transfers must be lodged before that time. The last day for trading in the Shares on the London Stock Exchange for normal settlement (in order to enable settlement prior to the Record Date) will be 13 March 2009. As from 16 March 2009, dealings should be for cash settlement only and will be registered in the normal way if the transfer, accompanied by documents of title, is received by the Registrar by 5.00 p.m. on 18 March 2009. The Record Date, being the date for determining which Shareholders are entitled to receive liquidation distributions, is the close of business on 18 March 2009. Transfers received by the Registrar after 5.00 p.m. on 18 March 2009 will be returned to the person lodging them. Dealings in Shares on the London Stock Exchange will be suspended at 7.00 a.m. on 20 March 2009 and, at the same time, the listing on the Official List will be suspended. Shareholders should be aware that, should the Proposals be implemented, the listing of the Shares on the Official List will be cancelled with effect from March 2010. It is intended that the ZDP Shareholders will be paid their cash entitlement (of 195.54p per ZDP Share) in the week commencing 23 March 2009. The Liquidators intend to make the initial distribution to Ordinary Shareholders in the week commencing 27 April 2009 or as soon as practicable thereafter. The Liquidation Fund The Liquidators will distribute the balance of the Liquidation Fund by one or more further distributions, after paying the costs of liquidation and settling all tax and other liabilities of the Company and the Subsidiary, to Ordinary Shareholders of the Company once any realisations in respect of the VAT reclaim have been received. On the basis of current information, the timing and quantum of any further distributions will depend upon the VAT recovery mentioned above and the receipt by the Liquidators of confirmation from the tax authorities that the Company has no outstanding liabilities. General Meetings The implementation of the Proposals will require Shareholders to vote in favour of the Resolutions at the General Meetings, which have been convened for 10.00 a.m. and 10.05 a.m. on 20 March 2009. The General Meetings will be held at the offices of Investec Investment Management Limited, Woolgate Exchange, 25 Basinghall Street, London EC2V 5HA. The Resolutions will require the approval of 75 per cent. or more of the votes cast at each General Meeting, whether in person or by proxy. The Proposals are conditional upon the passing of Resolution 1 at the General Meeting of the Company and the Subsidiary respectively. In accordance with the Articles of the Company, all Shareholders in the Company present in person or by proxy and entitled to vote shall, upon a show of hands, have one vote and, upon a poll, shall have one vote in respect of every Share held. The Articles of the Subsidiary are drafted in such a manner that in practice the Resolution being put to Shareholders for its winding-up will be passed. In accordance with the Articles of the Subsidiary, Shareholders in the Subsidiary present in person or by proxy and entitled to vote and who vote in favour of the Resolutions shall collectively have such total number of votes on a poll as is more than the number of votes which are required to be cast on such poll for the Resolutions to be carried. The quorum requirement for each General Meeting is at least two Shareholders present in person or by proxy (or, in the case of a corporation, by a duly appointed representative) and entitled to vote. If Resolution 1 is not passed at the General Meeting of the Company, the Company will continue as an investment company in its current form but will continue to be obliged to ensure that the Subsidiary, which will go into liquidation in any event as described above, has sufficient assets on 20 March 2009 to satisfy the final capital entitlements of ZDP Shareholders. Recommendation The Board unanimously recommends Shareholders to vote in favour of the Resolutions to be proposed at the General Meetings. The Directors intend to vote in favour of the Resolutions in respect of their own beneficial holdings of Shares (amounting to 396,000 Ordinary Shares in the Company representing approximately 1.41 per cent. of the issued share capital of the Company and 40,000 ZDP Shares in the Subsidiary representing approximately 0.56 per cent. of the issued share capital of the Subsidiary, in each case as at the date of this announcement). Expected Timetable Payment of third and final Interim 19 March 2009 Dividend Latest time and date for receipt of 10.00 a.m. on 18 March 2009 Forms of Proxy for use at the General Meeting of the Company Latest time and date for receipt of 10.05 a.m. on 18 March 2009 Forms of Proxy for use at the General Meeting of the Subsidiary Registers close and Record Date for 5.00 p.m. on 18 March 2009 Shareholder entitlements in respect of the liquidations Suspension of Shares from trading on 7.00 a.m. on 20 March 2009 the London Stock Exchange and suspension of the listing for the Shares on the Official List General Meetings of the Company and 10.00 a.m. and 10.05 a.m. on 20 March the Subsidiary respectively 2009 Appointment of Liquidator in respect 20 March 2009 of the Company and the Subsidiary Expected distribution to ZDP Week Commencing 23 March 2009 Shareholders* Expected first distribution to Week commencing 27 April 2009 Ordinary Shareholders* Cancellation of listing March 2010 This announcement does not contain all the information which is contained in the Circular and Shareholders should read the Circular to make an informed decision on the proposals. Enquiries Martin Slade Authorised Representative of the Company Secretary, Investec Investment Management Limited 020 7597 2000 Notes A copy of the Circular will be submitted shortly to the UK Listing Authority and will be available for inspection at the UK Listing Authority's Document Viewing Facility, which is situated at: The Financial Services Authority 25 The North Colonnade Canary Wharf London E14 5HS END
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