Circ re Proposals for the Reconstruction and Winding-Up
10 October 2007 - 3:00AM
UK Regulatory
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
Prem. Abs. (LSE:PABI)
Historical Stock Chart
From May 2024 to Jun 2024
Prem. Abs. (LSE:PABI)
Historical Stock Chart
From Jun 2023 to Jun 2024
