Terra Capital PLC Circular re: Realisation Opportunity (6136R)

TIDMTCA

RNS Number : 6136R

Terra Capital PLC

15 June 2018

Terra Capital PLC

Legal Entity Identifier: 2138006S6U2X7L4R8V74

15 June 2018

Circular re Realisation Opportunity

Terra Capital PLC (the "Company")

Further to the announcement released on 19 April 2018, which announced that, subject to the formal approval of Shareholders, the Board would dispense with the realisation opportunity that was to be offered in June 2018 and instead cease all new investments and seek to realise, in an orderly fashion, the Company's portfolio of investments and return the net proceeds generated to Shareholders as soon as is practicable (the "New Investment Policy"), the Company is pleased to announce the despatch of a Circular to Shareholders giving details of the New Investment Policy and changes to its constitutional arrangements (including re-registering the Company under the Isle of Man Companies Act 2006 in order to give effect to these proposals.

The Circular contains information on the New Investment Policy, the constitution and the investment management arrangements to be introduced to facilitate the New Investment Policy. The Board continues to believe an orderly realisation of the portfolio of investments is preferable to an immediate liquidation as it is likely to achieve greater returns to Shareholders. It is currently envisaged that returns to Shareholders will be effected by means of a pro-rata compulsory redemption mechanism.

The Board, having consulted with Shareholders, believe it is appropriate and in the best interests of Shareholders to incentivise the Investment Manager to realise, in accordance with the New Investment Policy, the Company's portfolio of investments in a timely fashion. It is proposed that the arrangements with the Investment Manager be varied such that the current fee structure, 1.25 per cent. per annum of NAV and a performance fee linked to NAV increases, will be replaced with an arrangement whereby the Investment Manager will be entitled to receive a fee equal to 1 per cent. of any Distributions made to Shareholders, which would include cash that is returned by way of a Compulsory Redemption of Ordinary Shares. The new fee arrangements will be deemed to come into effect on 1 July 2018. Although on an ongoing basis the Investment Manager will not be entitled to receive a performance fee, the Investment Manager will be entitled to receive a performance fee in respect of the period ending 30 June 2018 if it is due such a fee under the existing arrangements.

The Board believes that the proposed changes to the fee arrangements will, in the light of the New Investment Policy, better align the interests of Shareholders and the Investment Manager. The Board consulted with Shareholders concerning the proposed new arrangements and has received support from Shareholders who between them hold approximately 58 per cent. of the issued share capital of the Company.

For the purposes of the AIM Rules, the entering into of the revised fee arrangements outlined above would constitute a related party transaction. In this regard the Board considers, having consulted with Panmure Gordon, the Company's nominated adviser, that the proposed revised arrangements are fair and reasonable insofar as Shareholders are concerned.

The Circular convenes a meeting of Shareholders to take place at 10.00 am on 10 July 2018 to allow the approval of the necessary changes to the Company's investment policy and Articles of Association.

Copies of the Circular will shortly be available at www.terracapitalplc.com . Terms defined in the Circular have the same meaning in this announcement.

For more information, please visit www.terracapitalplc.com or contact:

Galileo Fund Services Limited (Administrator)

Frazer Pickering

[phone]

Panmure Gordon (UK) Limited (Nominated adviser and corporate broker)

Jonathan Becher

[phone]

Terra Capital plc.

Ian Dungate, Director

[phone]

NOTES:

Terra Capital plc is an AIM quoted investment company focussed on generating high absolute returns while attempting to keep volatility to a minimum. The Fund predominantly invests in under-researched and under-valued companies listed on Frontier Market stock exchanges. The Fund Manager targets for investment companies that it believes are trading for less than their intrinsic worth and so, aside from any potential growth prospects, provide scope for capital appreciation as a result of a reversion towards their underlying value. Investments are also made in companies which are viewed as trading at fair value but which offer opportunities for growth at a reasonable price. The Investment Manager believes many such 'value' opportunities can be found in Frontier Markets due to inherent market inefficiencies in such markets. The Manager utilises in-house teams of its own analysts, resident on the ground in areas of interest to investigate suitable opportunities rather than rely on third party research.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [e-mail] or visit www.rns.com.

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June 15, 2018 11:30 ET (15:30 GMT)