Publication of Circular (2398X)

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RNS Number : 2398X

Longbow Growth and Income VCT

10 February 2012

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA, JAPAN OR south africa OR any jurisdiction in which the same could be unlawful. the information contained herein does not constitute an offer of securities for sale in any jurisdiction, including in the united states, CANADA, australia, japan OR south africa.

10 February 2012

LONGBOW GROWTH AND INCOME VCT PLC

PUBLICATION OF CIRCULAR

Introduction

In July 2011, Longbow Growth and Income VCT plc (the "Company") completed an offer for subscription raising gross proceeds of approximately GBP1.1 million and its Shares were admitted to listing on the premium segment of the Official List and trading on the Main Market of the London Stock Exchange.

Further to the interim management statement released by the Company on 20 November 2011, the Board has reviewed the Company's management arrangements and concluded, against the background of its belief that it does not make economic sense to operate a listed VCT with assets under management of only approximately GBP1 million, that Shareholders' interests will be best served by a merger with another listed VCT. After considering available options, the Board has reached agreement with ProVen Health VCT plc ("ProVen Health VCT") in respect of a merger of the assets of the Company and ProVen Health VCT pursuant to a scheme of reconstruction and winding up of the Company under section 110 of the Insolvency Act 2006.

Under the Proposals, the Company will be placed into members' voluntary liquidation and its assets (comprising its investment in Polytherics Limited and uninvested cash) will (after setting aside a Liquidation Fund to cover the liabilities of the Company) be transferred to ProVen Health VCT in consideration for the issue of New ProVen Health VCT Shares to Shareholders. The New ProVen Health VCT Shares will rank pari passu with the existing ProVen Health VCT Shares, save that they shall not qualify for the interim dividend payable by ProVen Health VCT in respect of the year ended 31 January 2012.

The Company has today published a circular (the "Circular") to its Shareholders in connection with Proposals. Shareholders have also been sent a copy of Prospectus published by ProVen Health VCT in relation to the Proposals.

Implementation of the Proposals is conditional upon the passing of the Resolutions at the General Meetings. In the event that either of the Resolutions is not passed or any other condition of the Proposals is not met, the Proposals will not be implemented and the Board will formulate new proposals for the winding up of the Company.

Information on ProVen Health VCT plc

ProVen Health VCT is a venture capital trust which was launched in February 2001. ProVen Health VCT is managed by Beringea LLP. ProVen Health VCT aims to provide investors with an attractive return by maximising the stream of tax-free dividend distributions from the capital gains and income generated from a diversified portfolio of investments in the health sector. In conjunction with the Proposals, ProVen Health VCT intends to amend its investment policy. Its proposed new investment policy would allow ProVen Health VCT to make investments in a diversified portfolio of growth companies in a number of sectors (rather than restrict investments to companies in the health sector). A resolution to approve the change to the investment policy of ProVen Health VCT will be considered at the ProVen Health VCT General Meeting (although the Proposals are not conditional upon the passing of this resolution). Given the largely unquoted nature of ProVen Health VCT's investment portfolio, its current 100 per cent exposure to the health sector and the continued sourcing of health sector investments, it is expected that ProVen Health VCT will continue to be predominantly exposed to the health sector for the foreseeable future.

ProVen Health VCT's investment portfolio consists of eight unquoted investments and two quoted investments. As at 31 October 2011 (being the date of the latest unaudited valuations of Proven Health VCT's portfolio), the aggregate valuation of ProVen Health VCT's investment portfolio was GBP5.12 million. In addition, ProVen Health VCT had cash and liquidity fund investments of approximately GBP3.71 million. As at 31 October 2011, the unaudited net asset value per ProVen Health VCT Share was 45.5p.

Source: Beringea LLP.

Benefits of the Proposals

The Directors consider that the Proposals have the following benefits for Shareholders:

-- they allow Shareholders to roll over their investment in a tax efficient manner (without incurring an immediate liability to UK capital gains tax);

-- Shareholders will retain the upfront VCT income tax relief they obtained on subscription for their Shares (provided they retain their New ProVen Health VCT Shares until at least five years after their Shares in the Company were issued);

-- the merger of ProVen Health VCT and the Company will create a single VCT with a greater capital base over which to spread administration and management costs;

-- Shareholders will be invested in a VCT which already has ten portfolio investments;

-- the enlarged ProVen Health VCT will have a more diversified portfolio thereby dispersing the portfolio risk across a broader range of investments and businesses;

-- ProVen Health VCT is managed by Beringea, an investment manager with significant experience in investing in small and medium sized unquoted companies; and

-- the costs and expenses of the Proposals, if implemented, will be met by Longbow Capital and Beringea (through a management fee waiver).

Costs and expenses

The aggregate costs and expenses to be incurred by the Company and ProVen Health VCT in connection with the Proposals are expected to be approximately GBP100,000 (including VAT and stamp duty). ProVen Health VCT has agreed to meet GBP75,000 (including irrevocable VAT and stamp duty) of those costs and expenses with all of this amount to be reimbursed to ProVen Health VCT by Beringea by means of a partial management fee waiver over two years commencing on the Effective Date (with GBP9,375 of the management fees otherwise payable to Beringea waived each quarter until the GBP75,000 of costs and expenses paid by ProVen Health VCT have been recovered in full). Longbow Capital has agreed to meet the balance of the costs and expenses payable by the Company and ProVen Health VCT in connection with the Scheme. Accordingly, the Company shall not bear any of the costs and expenses of the Proposals if they become effective.

If the Scheme does not become effective, the Company will bear abort costs and expenses estimated at approximately GBP22,500 (including VAT). In these circumstances, the Board intends to formulate new proposals for the liquidation of the Company which would result in additional costs being incurred by the Company.

In conjunction with the Scheme, ProVen Health VCT intends to put forward proposals for an Enhanced Share Buyback whereby existing ProVen Health VCT Shareholders will be provided with the opportunity to sell back their ProVen Health VCT Shares subject to the condition that they use the sale proceeds to subscribe for new ProVen Health VCT Shares (whilst obtaining new income tax relief of up to 30 per cent. of the amount re-subscribed). ProVen Health VCT also intends to carry out an Offer for Subscription to raise gross proceeds of up to GBP1 million. Further details of the Enhanced Share Buyback and the Offer for Subscription are set out in the Prospectus.

Shareholder meetings

The implementation of the Proposals will require Shareholders to vote in favour of resolutions to be proposed at general meetings of the Company (the "General Meetings") which have been convened for 12 noon on 7 March 2012 and 10.00 a.m. on 16 March 2012. 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 Dickson Minto W.S., 16 Charlotte Square, Edinburgh EH3 4DF.

EXPECTED TIMETABLE

All references are to UK time.

 
                                                       2012 
 
Latest time and date for receipt         12 noon on 5 March 
 of blue forms of proxy for the 
 First General Meeting 
 
First General Meeting                    12 noon on 7 March 
Time and date from which it is               8.00 a.m. on 8 
 advised that dealings in Shares                      March 
 should only be for cash settlement 
 and immediate should only be for 
 cash settlement and immediate 
 delivery of documents of title 
Record Date for Shareholders'               6.00 p.m. on 12 
 entitlements under the Scheme                        March 
Shares disabled in CREST(1)                 7.30 a.m. on 13 
                                                      March 
Calculation Date                          close of business 
                                                on 13 March 
Latest time and date for receipt              10.00 a.m. on 
 of green forms of proxy for the                   14 March 
 Second General Meeting 
Dealings in Shares suspended                7.30 a.m. on 16 
                                                      March 
Second General Meeting                        10.00 a.m. on 
                                                   16 March 
Effective Date for implementation                  16 March 
 of the Scheme and commencement 
 of the liquidation of the Company 
Admission to listing and dealings           8.00 a.m. on 19 
 commence in the New ProVen Health                    March 
 VCT Shares issued pursuant to 
 the Scheme 
New ProVen Health VCT Shares issued         8.00 a.m. on 19 
 in uncertificated form credited                      March 
 to CREST accounts of Shareholders 
 under the Scheme 
Share and tax certificates in               week commencing 
 respect of New ProVen Health VCT                   9 April 
 Shares issued in certificated 
 form pursuant to the Scheme despatched 
 to Shareholders entitled thereto 
Cancellation of listing of Shares           8.00 a.m. on 30 
                                                      April 
 

Notes:

(1) For the avoidance of doubt, the Register will remain open until the Effective Date.

(2) Each of the times and dates in the above expected timetable (other than in relation to the General 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.

Total voting rights

The Company announces that it has forfeited and cancelled 117,300 Ordinary Shares allocated pursuant to its offer for subscription in July 2011 in respect of which the issue price remains unpaid. The Company now has 1,057,592 Ordinary Shares in issue, each with voting rights. The Company does not hold any shares in treasury. Accordingly, the total number of voting rights in the Company is 1,057,592. The above figure may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the Company under the Disclosure and Transparency Rules.

Definitions

The definitions set out below apply in this announcement unless the context requires otherwise:

 
 Admission                Admission the admission of the 
                           New ProVen Health VCT Shares to 
                           be issued under the Proposals to 
                           the Official List with a Premium 
                           Listing and to trading on the Main 
                           Market 
 Beringea                 Beringea LLP (the investment manager 
                           of ProVen Health VCT), a limited 
                           liability partnership registered 
                           in England and Wales with registered 
                           number OC342919 
 Board or Directors       the directors of the Company or 
                           any duly constituted committee 
                           thereof 
 Calculation              the time and date, to be determined 
  Date                     by the Directors but expected to 
                           be close of business on 13 March 
                           2012 (unless the First General 
                           Meeting is adjourned), at which 
                           the FAV per LGIV Share and the 
                           FAV per ProVen Health VCT Share 
                           will be calculated for the purposes 
                           of the Scheme 
 certificated             a share which is not in uncertificated 
  or in certificated       form 
  form 
 Circular                 the circular published by the Company 
                           on 10 February 2012 
 Company                  Longbow Growth and Income VCT plc, 
                           a company incorporated in England 
                           and Wales with registered number 
                           7423739 
 Effective Date           the date of the passing of the 
                           resolution to be proposed at the 
                           Second General Meeting or, if later, 
                           on all conditions of such resolution 
                           being satisfied (which is expected 
                           to be 16 March 2012) 
 Enhanced Share           the proposed enhanced share buyback 
  Buyback                  to be implemented by ProVen Health 
                           VCT 
 FAV per LGIV             the formula asset value of an Ordinary 
  Share                    Share calculated as at the Calculation 
                           Date in accordance with the Scheme 
 FAV per ProVen           the formula asset value of a ProVen 
  Health VCT Share         Health VCT Share calculated as 
                           at the Calculation Date in accordance 
                           with the Scheme 
 First General            the general meeting of the Company 
  Meeting                  convened for 12.00 noon on 7 March 
                           2012, or any adjournment thereof 
 FSMA                     the Financial Services and Markets 
                           Act 2000 (as amended) 
 General Meetings         the First General Meeting and Second 
                           General Meeting 
 Investment Manager       Longbow Capital LLP (the investment 
  or Longbow Capital       manager of the Company), a limited 
                           liability partnership registered 
                           in England and Wales with registered 
                           number OC309046 
 Liquidation              the liquidation fund to be retained 
  Fund                     by the Liquidator to meet the liabilities 
                           of the Company 
 Liquidator               the liquidator of the Company to 
                           be appointed at the Second General 
                           Meeting 
 London Stock             London Stock Exchange plc 
  Exchange 
 Longbow Capital          Longbow Capital LLP, a limited 
  or Manager               liability partnership registered 
                           in England and Wales with registered 
                           number OC309046 
 Main Market              the London Stock Exchange's main 
                           market for listed securities 
 NAV or Net Asset         net asset value 
  Value 
 New ProVen Health        the ProVen Health VCT Shares to 
  VCT Shares               be issued pursuant to the Scheme, 
                           the Enhanced Share Buyback and/or 
                           the Offer for Subscription (as 
                           the context requires) 
 Offer or Offer           the proposed offer for subscription 
  for Subscription         of New ProVen VCT Shares as described 
                           in the Prospectus 
 Official List            the Official List of the UK Listing 
                           Authority 
 Premium Listing          a listing on the premium segment 
                           of the Official List 
 Proposals                the proposals for the voluntary 
                           winding up and reconstruction of 
                           the Company (including the Scheme) 
                           described in the Circular 
 Prospectus               the prospectus published by ProVen 
                           Health VCT on 10 February 2012 
 ProVen Health            ProVen Health VCT plc, a company 
  VCT                      incorporated in England and Wales 
                           with registered number 4131354 
 ProVen Health            the general meeting of ProVen Health 
  VCT General              VCT convened for 10.00 a.m. on 
  Meeting                  12 March 2012, or any adjournment 
                           thereof 
 ProVen Health            ordinary shares of 1p each in ProVen 
  VCT Shares               Health VCT 
 Record Date              6.00 p.m. on 12 March 2012, being 
                           the record date for determining 
                           which Shareholders are entitled 
                           to participate in the Scheme 
 Register                 the register of members of the 
                           Company 
 Regulatory Information   any of the services authorised 
  Service                  from time to time by the Financial 
                           Services Authority for the purposes 
                           of disseminating regulatory announcements 
 Resolutions              the resolutions set out in the 
                           notices of the General Meetings 
 Scheme                   the scheme under section 110 of 
                           the Insolvency Act 1986 set out 
                           in Part 3 of the Circular 
 Second General           the general meeting of the Company 
  Meeting                  convened for 10.00 a.m. on 16 March 
                           2012, or any adjournment thereof 
 Shareholders             holders of Shares 
 Shares or Ordinary       ordinary shares of 1p each in the 
  Shares                   capital of the Company 
 UK Listing Authority     the Financial Services Authority 
                           acting in its capacity as the competent 
                           authority for listing pursuant 
                           to Part VI of FSMA 
 uncertificated           recorded in the register of members 
  or in uncertificated     of the Company or ProVen Health 
  form                     VCT (as appropriate) as being held 
                           in uncertificated form in CREST 
                           and title to which may be transferred 
                           by means of CREST 
 VAT                      value added tax 
 VCT or Venture           a venture capital trust as defined 
  Capital Trust            in section 259 of the Income Tax 
                           Act 2007 (as amended) 
 

Enquiries:

 
 Edward Beckett 
  Longbow Capital LLP           020 7332 0320 
 Robin Smeaton                  0131 243 7210 
 The City Partnership (UK) 
  Limited, Company Secretary 
 

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

This information is provided by RNS

The company news service from the London Stock Exchange

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