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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Prem. Abs. | LSE:PABI | London | Ordinary Share | GB0001827590 | ORD INC SHS 1P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.38 | 0.00 | 01:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
FOR IMMEDIATE RELEASE PAGIT Securities plc ("the Company") 9 October 2007 Proposals for the voluntary winding-up and reconstruction of the Company The Board of the Company, a subsidiary of Premier Absolute Growth & Income plc, is today announcing recommended Proposals for the reconstruction and members' voluntary liquidation of the Company, through a scheme under section 110 of the Insolvency Act 1986. Under the Proposals, which are set out in a circular being despatched to Shareholders today ("Circular"), ZDP Shareholders will be able to elect to receive their entitlement upon the winding up of the Company either in cash or to roll over some or all of their investment into Premier Absolute Growth Fund, a sub-fund within Premier Funds, an open-ended investment company. The Proposals have been designed to provide ZDP Shareholders with a choice of realising their investment or continuing it through a rollover into Premier Absolute Growth Fund. Shareholders electing to rollover their investment should not be treated as triggering a gain or loss for capital gains tax purposes at this time. Background The Articles provide for the Company to be wound-up on 8 November 2007, or for there to be a reconstruction of the Company in order to facilitate the return due to ZDP Shareholders. The arrangements between the Company and PAGIT, as set out in the Loan Note and the Subscription Agreement, provide for PAGIT to pay such amount to the Company as is required to satisfy in full the capital entitlement of the holders of ZDP Shares on any winding-up, or, to the extent that PAGIT does not have sufficient assets to satisfy such entitlement in full, PAGIT shall pay to the Company all of its remaining assets after payment of all other creditors of PAGIT. The Proposals Under the Proposals the Company will be wound up on 8 November 2007. ZDP Shareholders will be able to elect: a. to rollover some or all of their investment into shares in Premier Absolute Growth Fund, a sub-fund within Premier Funds, an open-ended investment company which aims to provide steady capital growth through investment principally in a combination of zero dividend preference shares of quoted investment companies and securities which, in the Rollover Manager's opinion, are lower risk securities (the "Rollover Option"); and/or b. to receive cash in the liquidation of the Company (the "Cash Option"). Under the Scheme, ZDP Shareholders will be entitled to receive their Scheme Asset Value ("SAV") per share in respect of their Options. The Scheme Asset Value per share for these purposes is an amount equal to the amount of cash which would be available to the Company to pay the final capital entitlement of each ZDP Share on 8 November 2007 divided by the number of ZDP Shares in issue. There are currently 8,026,000 ZDP Shares in issue with a maximum final entitlement of approximately £14.68 million. For illustrative purposes, the net assets of the Company as at 30 September 2007 published on 3 October 2007 (being the latest practicable date prior to the printing of this document) were approximately £15.224 million. The amount of these net assets takes into account the anticipated costs of liquidating both the Company and PAGIT (estimated at £200,000) as well as the retentions anticipated to be required by the Liquidators (to meet contingent and unknown liabilities) of £25,000 and £ 150,000 respectively for each of the companies. The net asset figure does not recognise any future recovery of VAT (see below). Based on the net assets of PAGIT above and assuming: that there is no decline in those net assets between now and 8 November 2007; that such net assets were represented solely by cash; and that shares in the Rollover Fund were issued at 56.72p (being their issue price as at close of business on 2 October 2007), this would give rise to the following payment per ZDP Share in cash or in shares in the Rollover Fund under the Scheme: For each ZDP Share: 182.84708p in cash or 3.192 shares in the Rollover Fund Due to the short interval between the Calculation Date (7 November 2007) and the Transfer Date, being the date on which it is anticipated that Premier Absolute Growth Fund will issue its shares (8 November 2007), ZDP Shareholders who elect for the Rollover Option will be exposed to any movement over that interval in the market value of the assets to be transferred as part of the Rollover Pool (expected to be principally cash and short-dated Government securities). In the event that the Scheme Asset Value per share is less than the final capital entitlement per ZDP Share, the difference per share will be paid in cash as and when (if ever) the Company receives further cash from PAGIT. In such circumstances, it is possible that further cash may be available from PAGIT as a result of its VAT claim against the Manager and the former manager, further details of which are set out below. Shareholders should note that any further payments over and above the Scheme Asset Value per share would be made in cash to all ZDP Shareholders regardless of the Option they choose. For ZDP Shareholders who elect for the Rollover Option, there will be an initial charge of 1 per cent. of the gross value of their rollover into the Premier Absolute Growth Fund. The Rollover Fund will aggregate the initial charges and when issuing its shares to the relevant ZDP Shareholders will reduce their aggregate entitlements by 1 per cent. The Rollover Fund will then pay an amount equal to these initial charges to the Rollover Manager. The Rollover Manager has agreed to pay to the Company, to defray part of the costs of the Proposals, the amount of all of the initial charges it receives. Regardless of the level of rollovers, the Manager has agreed that in any event either it or the Rollover Manager will pay at least £30,000 to the Liquidation Fund. Failure to make an Election ZDP Shareholders (other than Overseas Holders) who make no valid election will be deemed to have elected for the Rollover Option. The actions to be taken if no valid Election is made may be superseded by any other arrangements made by your PEP or ISA plan administrator. Advantages of the Proposals The Directors believe that the Proposals are in the best interests of Shareholders because: * shares in the Rollover Fund are being issued on terms which are more favourable than the terms on which Shareholders could generally purchase such shares due to a reduction in the initial charge from 5.25 per cent. of the gross investment in the A Shares to 1 per cent. In addition, the Rollover Manager has agreed to waive any minimum investment levels; * the Rollover Fund pursues an investment policy that is intended to generate capital growth from a portfolio comprising zero dividend preference shares and other securities considered by the Rollover Manager to be low risk, and hence has a risk and return profile that is similar to the risk and return profile of the ZDP Shares; * they should allow Shareholders to elect to receive shares in the Rollover Fund, thereby allowing Shareholders to retain an investment exposure without triggering a disposal for capital gains purposes until disposing of such shares at a time of their choosing; * Shareholders who elect for the Cash Option will be able to receive cash in the liquidation of the Company; and * the amount by which the aggregate of initial charges that the Rollover Manager has agreed to pay into the Liquidation Fund will offset the costs to be borne by Shareholders in implementing the Scheme. To the extent that the contribution from the initial charges exceeds the marginal cost of implementing the Scheme as opposed to a straight liquidation on 8 November 2007, Shareholders will bear less cost than they would bear were the Company to be liquidated on 8 November 2007 without implementation of the Scheme. The Rollover Option Premier Absolute Growth Fund aims to achieve steady capital growth through investment principally in a combination of zero dividend preference shares of quoted investment companies and other securities which, in the Rollover Manager's opinion, are also lower risk securities. Premier Absolute Growth Fund is managed by Premier Portfolio Managers Limited. As at 2 October 2007, Premier Absolute Growth Fund had assets of approximately £53.188 million and the dividend yield was zero per cent. Minimum investment requirement for the Rollover Option The Rollover Manager has agreed to waive the normal minimum investment requirement for ZDP Shareholders who wish to elect for the Rollover Option. Liquidation Fund Under the Proposals, the Company will be wound up by means of a members' voluntary liquidation. The Liquidators will set aside sufficient assets in the Liquidation Fund of the Company to meet its liabilities. If any further cash is received by the Company after the Effective Date, it will form part of the Liquidation Fund. The Liquidators will also provide in the Liquidation Fund for a Retention which they consider sufficient to meet any contingent and unknown liabilities of the Company. The Retention is currently expected to amount to approximately £ 25,000. To the extent that all of this Retention is not required to meet such liabilities, the balance will be distributed to ZDP Shareholders by the Liquidators at a later date to the extent that there is any shortfall in satisfying their full entitlement. Potential recovery of value added tax PAGIT has made a claim against the Manager and the former manager of PAGIT in respect of VAT borne by PAGIT on management fees. The claim relates to the principle recently established by the European Court of Justice that investment trusts should under pan-European VAT law be regarded as "special investment funds" for the purposes of exemption from VAT on supplies to both of them of management services. As the application of this principle in a UK context is still being worked out by the UK courts it is unclear what (if any) amounts PAGIT can expect to receive in respect of its claim or when any such amounts might be paid. In the event PAGIT recovers any VAT from the Manager or the former manager and to the extent that there has been a shortfall in satisfying the final capital entitlement of the ZDP Shares, the monies represented by the VAT recovery shall be paid to the Liquidation Fund for the Liquidators to distribute to the ZDP Shareholders in cash (regardless of whether the relevant ZDP Shareholders have elected for a rollover or not). Details of the Proposals As part of the reconstruction and winding up of the Company it is necessary, for technical reasons, to reorganise its share capital. Set out in the Circular are the notices convening the Class Meeting and the GMs. At the Class Meeting, a special resolution will be proposed to consent to the resolutions to be proposed at the First GM and the Second GM. ZDP Shareholders may attend and vote at the Class Meeting. At the First GM, a special resolution will be proposed to (i) re-classify the rights attaching to the ZDP Shares such that those ZDP Shareholders who elect, or are deemed to elect, to rollover into Premier Absolute Growth Fund will hold shares with "A" rights giving them the right to receive Premier Absolute Growth Fund Shares on a winding-up of the Company and those ZDP Shareholders who elect, or are deemed to elect, to receive cash will hold ZDP Shares with "B" rights giving them the right to receive cash on the winding-up of the Company; (ii) authorise the implementation of the Scheme by the Liquidators including an application to delist the Company's shares from the Official List of the UK Listing Authority and (iii) amend the Articles for the purposes of its implementation. Ordinary Shareholders and ZDP Shareholders may attend and vote at the First GM. At the Second GM, special resolutions will be proposed to wind the Company up voluntarily, to appoint the Liquidators and to confer certain powers on the Liquidators. Ordinary Shareholders and ZDP Shareholders may attend and vote at the Second GM. In the event that the first resolution proposed at the Second GM is not passed, a special resolution will be proposed at the Third GM to wind up the Company voluntarily. Ordinary Shareholders and ZDP Shareholders, whose votes will be weighted pursuant to article 134(b) of the Articles, may attend and vote at the Third GM. In order to implement the Scheme, the assets of the Company will be divided into three Pools, the Cash Pool, the Rollover Pool and the Liquidation Fund, on the Calculation Date. The assets of the Company will comprise cash and securities as well as its rights (if any) under the Loan Note and Subscription Agreement. The division of the assets of the Company will be on the basis of the value attributable to elections for the Rollover Option and the value attributable to elections for the Cash Option as a proportion of the total value attributable to Elections. In order to make the division between the three Pools, the Manager in consultation with the Liquidators will calculate for the purposes of determining SAV the aggregate value of the Company in accordance with the Scheme as at 5.00 p.m. on the Calculation Date. The SAV per share is the amount which would be payable to a ZDP Shareholder on the winding-up of the Company on 8 November 2007 after making provision for all outstanding liabilities and contingent liabilities, the expenses of the Proposals and the Retention. The Liquidators will make a retention in respect of unknown, unrecorded and contingent liabilities (the "Retention"). It is currently estimated by the Liquidators that this amount will be £25,000. The Liquidators have indicated that the likely retention for the purposes of the liquidation of PAGIT will be £150,000, part of which may be used for the purposes of recovering VAT, as described above. To the extent that any part of the Liquidation Fund is not required after the discharge of all the liabilities, the surplus remaining will be distributed in cash to all ZDP Shareholders on the Record Date up to their maximum respective capital entitlements under the Articles. On the Effective Date, or as soon as practicable thereafter, the Liquidators will distribute the value of the Cash Pool to ZDP Shareholders with "B" rights. On the Transfer Date the Liquidators will transfer the assets in the Rollover Pool to Premier Absolute Growth Fund in exchange for Premier Absolute Growth Fund Shares which will be issued to the ZDP Shareholders with "A" rights, pro rata, on the basis of the value of the Rollover Pool as at the Calculation Date and the Premier Absolute Growth Fund Share Issue Price being the issue price of such shares as at noon on the Effective Date. Costs and Expenses The total costs in connection with the Proposals and the liquidation of PAGIT are estimated to be approximately £200,000 (inclusive of VAT and the estimated Liquidator's costs but excluding the Retention to be made by the Liquidators) assuming only the minimum Managers' contribution of £30,000. If the contribution is greater than this, the costs will fall correspondingly. Conditions to the Proposals The Scheme which provides for, and which will effect, the Rollover Option, is conditional upon (i) the resolutions at the First GM and the Second GM being passed and (ii) the Directors not resolving to abandon the Scheme. In the event that the Scheme does not become unconditional, the Company will proceed to a straight liquidation pursuant to the resolutions contained in the notice of the Second GM and, if necessary, pursuant to the resolution contained in the notice of the Third GM. Such a straight liquidation of the Company would constitute a disposal for UK capital gains tax purposes. PEPs and ISAs Notwithstanding that the shares in the Rollover Fund should generally qualify for holding in a PEP or ISA, Shareholders who hold their Shares within PEPs or ISAs should, before making any Election for the Rollover Option or Cash Option, consult their PEP or ISA plan administrator as regards their own position. Expected timetable 2007 30 October Latest time and date for receipt of Forms of Proxy for the Class Meeting (9.55 a.m.) and First GM (10.00 a.m.) 31 October 3.00 p.m. Latest time and date for receipt of the Forms of Election from ZDP Shareholders 31 October 5.00 p.m. Record Date for entitlement to the Scheme 1 November 8.00 a.m. Listing of ZDP Shares cancelled 1 November 9.55 a.m. Class Meeting 1 November 10.00 a.m. First GM and ZDP Shares reclassified into Reclassified Shares 6 November Latest time and date for receipt of the Forms of Proxy for the Second GM (10.00 a.m.) and the Third GM (10.10 a.m.). 7 November 5.00 p.m. Calculation Date 8 November Second GM (10.00 a.m.) and (i) if the Scheme becomes unconditional, Effective Date for the implementation of the Proposals and commencement of liquidation or (ii) if the Scheme does not become unconditional, requirement for Third GM (10.10 a.m.) 8 November 10.10 a.m. In the event the resolutions are not passed at the Second GM, Third GM is held Week commencing Cheques expected to be despatched to ZDP 12 November Shareholders who elect for the Cash Option Contract notes for Premier Absolute Growth Fund Shares despatched General Full details of the Proposals, the risk factors relating to the Rollover Fund and the notice of extraordinary general meeting of the Company are set out in the Circular which is being despatched to the Company's Shareholders today. Terms used in this announcement shall have the same meaning as in the Circular. Copies of the Circular have been forwarded for publication through the UK Listing Authority and are available at: UKLA Document Viewing Facility The Financial Services Authority 25 The North Colonnade Canary Wharf London, E14 5HS Telephone No (0207) 066 1000 Enquiries Premier Fund Managers Nigel Sidebottom +44 (0)1483 400465 Landsbanki Securities (UK) Limited Paul Fincham/Jonathan Becher +44 (0)20 7426 9000 Landsbanki Securities (UK) Limited, which is authorised and regulated in the United Kingdom by the Financial Services Authority, is acting solely for the Company and for no one else in connection with the Proposals and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Landsbanki Securities (UK) Limited or for affording advice in relation to the Issue or any matter referred to in this document. END
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