TIDMGHS
RNS Number : 7977T
Gresham House Strategic PLC
29 November 2021
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
Gresham House Strategic plc
("GHS" or the "Company")
29 November 2021
Recommended proposals for Managed Wind-Down of the Company,
proposed initial return of capital, proposed return of capital by
way of Future Tender Offers and Notice of Requisitioned General
Meeting
The Board of GHS announces proposals to be made to Shareholders
in respect of:
-- a change of investment policy to facilitate a managed wind-down of GHS over 24 months;
-- the proposed initial return of capital by way of a B Share
Scheme and Tender Offer of up to GBP25 million in aggregate;
-- the proposed return of capital by way of Future Tender Offers
as the GHS portfolio is realised;
-- a Notice of Requisitioned General Meeting convened for 15 December 2021; and
-- Harwood Capital LLP ("Harwood") committing to manage the GHS
portfolio for no fees during the Managed Wind-Down period,
further details of which are set out in this announcement and in
a circular (the "Circular") to be published as soon as possible
today.
1. Introduction and background to the Proposals
On 24 May 2021, the Company announced the commencement of the
Strategic Review to determine the best course of action to provide
growth in value for all Shareholders. The Strategic Review had been
requested by Gresham House plc (" GHE ") in a previous requisition
of a general meeting of the Company.
The Independent Directors evaluated strategic options against
the following key objectives: continuing strong investment
performance; lowering the Company's cost base to be in line with
market standards; increasing the scale of the Company in Net Asset
Value ("NAV") terms; and ensuring strong corporate governance
arrangements between the Board and its investment manager.
After an extensive process during which the Board received a
number of high quality proposals and after consultation with
certain significant shareholders of GHS (other than GHE), the
Independent Directors announced on 11 October 2021 the termination
of Gresham House Asset Management Limited ("GHAM") as its
investment manager and the appointment of Harwood as its
replacement investment manager. Harwood's appointment became
unconditional on 6 November 2021. The Independent Directors
believed the proposal from Harwood provided a highly attractive and
cost-effective proposition for the future management of the
Company's investments. As part of the Strategic Review, the
Independent Directors considered other options, including a managed
wind-down of the portfolio, and concluded that these alternatives
were unlikely to be in the best interests of Shareholders as a
whole, a position which was supported by analysis provided to the
Company by Smith Square Partners LLP, its corporate advisors to the
Strategic Review.
Following this announcement, as announced on 15 October 2021,
the Board received the Notice of Requisition from Rock Nominees
Limited (on behalf of GHE, the "Requisitionist"). GHE informed the
Board that it had obtained irrevocable undertakings from
Shareholders to vote in favour of resolutions which proposed the
immediate return of cash on the Company's balance sheet and the
complete realisation of the Company's assets and return of capital
within 24 months. When taken together with GHE's own beneficial
shareholding of approximately 23.4 per cent, these irrevocable
undertakings accounted for approximately 46.8 per cent. of the
issued share capital of the Company.
As announced on 5 November 2021, the Board recognises that,
whilst some Shareholders who had been consulted during the
Strategic Review had indicated their support for the continuation
of the Company and the appointment of Harwood as investment
manager, Shareholders accounting for a substantial proportion of
the Company's issued share capital have now indicated support for
the discontinuation of the Company's activities and the associated
return of capital to Shareholders. Therefore, those resolutions are
very likely to be approved and the conclusions of the Strategic
Review supported by the Independent Directors at the time and
described in detail in the Company's announcement on 11 October
2021 are very unlikely to be capable of full implementation.
The Board agreed with GHE to delay the posting of the circular
to Shareholders convening the requisitioned meeting until no later
than 26 November 2021, so that it could include further resolutions
relating to a change of the Company's investing policy and a
mechanism to return capital in a cost-effective and tax-efficient
manner, which treats all Shareholders equally.
As announced on 5 November 2021, it was also agreed that Helen
Sinclair, the Company's Interim Chair at the time, would resign.
Charles Berry was appointed Interim Chair, pending the appointment
of Simon Pyper, whereupon he would likewise stand down from the
Board. Simon joined the Board on 22 November 2021 and Charles
consequently stepped down. Simon has been appointed Interim Chair
whilst the Board conducts a process to consider whether it should
comprise three or four directors on an ongoing basis and has
commenced a process to recruit an external independent
non-executive director who may be appointed Chair.
As announced on 5 November 2021, the Requisitionist agreed to
withdraw resolutions 3 to 6 in the Notice of Requisition following
the occurrence of certain events, including the appointment of
Simon Pyper as a director of the Company becoming effective.
However, the Board is still required to convene a general meeting
to propose resolutions 1 and 2 in the Notice of Requisition.
On 24 November 2021, the Company announced that it had been
advised by its recently appointed investment manager, Harwood, that
the realisation of the Augean Proceeds, which gave rise to a gain
of GBP18.8 million, together with other recent profitable sales are
expected to give rise to a tax liability which was not provided for
in the NAV calculations and that as a result, its weekly net asset
values have been incorrectly stated since 30 July 2021, the date on
which an offer for Augean plc was formally announced.
The net impact of the overstatement was approximately GBP1.3
million (approximately 2 per cent. of NAV as at 19 November 2021,
the date of the last NAV released by the Company prior to the
publication of that announcement). The amount is made up of a tax
provision of approximately GBP1.6 million less an overpayment of
management and performance fees to GHAM (the Company's former
investment manager) of approximately GBP0.3 million (inclusive of
VAT). GHAM has offered to provide any support required to remedy
the position and to fully reimburse the consequent over-payment of
performance fees without any delay.
Whilst the Company has significant brought forward capital
losses, changes to the tax legislation which became effective on 1
April 2020 limit the use of capital losses against realised gains
to GBP5 million per year. Thereafter, 50 per cent. of realised
gains are subject to corporation tax. The net effect is that
realised gains over GBP5 million per annum are currently taxed at
9.5 per cent. and not zero as was previously the case for the
Company as gains could be fully offset against brought forward
capital losses.
Whilst the realisation of the portfolio is expected to be spread
over two years and, as a result, the Company expects to be able to
use the GBP5 million annual allowance for utilising brought forward
capital losses, the Board has been advised that if the entire GHS
portfolio was liquidated at the market prices prevailing at today's
date within the current financial year, there would be an
additional corporation tax liability of approximately GBP1.3
million (approximately 2 per cent. of NAV as at 19 November 2021,
the date of the last NAV released by the Company prior to the
publication of that announcement).
The Company has today entered into amendments to the Harwood
Agreements, conditional on the passing of Resolutions 2 and 3. A
summary of the amendments to the Harwood Agreements is set out in
paragraph 3 below.
The Circular sets out details of, and seeks Shareholder approval
of, the proposals relating to:
-- the approval of resolutions 1 and 2 as set out in the Notice of Requisition;
-- the Managed Wind-Down of the Company and associated adoption
of the New Investment Policy; and
-- the return of capital to Shareholders pursuant to the Managed Wind-Down by:
o providing a mechanism to return capital to Shareholders by way
of a proposed B Share Scheme by way of adoption of the New
Articles;
o the immediate return of capital to Shareholders of up to
GBP25.0 million in aggregate by way of the proposed adoption of the
B Share Scheme and Tender Offer ("Initial Return of Capital");
and
o effecting the remaining return of capital to Shareholders
pursuant to the Managed Wind-Down by way of further tender offers,
and cancelling the capital redemption reserve and any remaining
share premium reserve by way of the Capital Reduction to increase
the Company's distributable reserves in order to do so,
(together the "Proposals"), as further summarised in paragraph 2
below.
The Proposals are subject to Shareholder approval and if
approved, are expected to result in the realisation of all the
Company's assets over a two year period and the subsequent return
of capital to Shareholders. The Circular sets out in more detail
the background to the Proposals and the reasons why the Board
recommends that Shareholders vote in favour of the Resolutions to
approve the Proposals.
Subject to the Proposals being approved at the General Meeting,
the Board intends to change the name of the Company to Rockwood
Realisation plc pursuant to the authority given to the Directors in
article 168 of the Existing Articles for that purpose. A further
announcement would be made in due course confirming when the name
change will become effective.
Notice of the General Meeting to be held at the offices of
finnCap, One Bartholomew Close, London, EC1A 7BL commencing at 2:00
p.m. on 15 December 2021 is set out in the Circular.
2. Summary of the Proposals
2.1 Requisitioned Resolutions
Resolution 1 is being proposed to effect the immediate return of
cash on the Company's balance sheet, after taking into account cash
required to meet ongoing expenses (including the proceeds arising
from the disposal of its interest in Augean plc) to its existing
Shareholders. If this resolution is passed, the Board expects to
return the cash (net of cash required to meet ongoing expenses) on
its balance sheet through the Initial Return of Capital (assuming
the B Share Resolutions and the Tender Offer Resolution are also
passed).
If none of the B Share Resolutions or the Tender Offer
Resolution are also passed, the Board would expect to return the
cash on its balance sheet (net of cash required to meet ongoing
expenses) by way of a dividend and on market share purchases to the
extent permitted. If either only the B Share Resolutions or the
Tender Offer Resolution are also passed, then the Board would
expect to implement the B Share Scheme or Tender Offer (as
applicable) to immediately return capital to Shareholders, and to
return any remaining cash on its balance sheet (net of cash
required to meet ongoing expenses) utilising its existing
authorities to buy back shares on market and by declaring a
dividend.
Resolution 2 is being proposed to commence the complete
realisation of the Company's assets for the benefit of all its
Shareholders, with such realisation and return of capital to
Shareholders to be completed within 24 months of the General
Meeting.
2.2 Amendments to the Current Investment Policy
If Resolution 2 is passed, the Company proposes to (i) amend its
Current Investment Policy to reflect a realisation strategy; and
(ii) cease making any new investments except in very limited
circumstances as detailed in Part 2 of the Circular. The proposed
amendments to the Current Investment Policy are considered a
material change, which requires the consent of Shareholders in
accordance with the AIM Rules.
In seeking the full realisation of the Company's investments
within 24 months of the General Meeting, the Directors will aim to
achieve a balance between maximising their net value and
progressively returning cash to Shareholders. In so doing, the
Board will take account of the continued costs of operating the
Company. The Company's admission to AIM and the capacity to trade
in its Shares will be maintained for as long as the Directors
believe it to be practicable and cost-effective during the Managed
Wind-Down period. If the Managed Wind-Down is approved, the Board
believes it may be appropriate from a cost perspective to de-list
the Company's shares at the end of the two year run-off period, or
once 85 per cent. of the value of the Company's assets (as at
today's date) have been realised and returned to Shareholders and
the Board will consult with Shareholders at that time
accordingly.
Irrespective of whether or not the Board seeks to de-list the
Shares, once all, or substantially all, of the Company's
investments have been realised, the Company will, at an appropriate
time, seek Shareholders' approval for it to be placed into members'
voluntary liquidation.
The appendix to this announcement sets out the New Investment
Policy in full.
2.3 Mechanics for returning cash to Shareholders
The Board has carefully considered the potential mechanics for
returning capital to Shareholders as part of the Managed Wind-Down
and the Company's ability to do so.
Having considered the various options for returning cash to
Shareholders, the Board believes that the following proposals would
be the fairest and most cost-effective and tax efficient ways to
effect returns of capital:
-- An initial return of capital to Shareholders of up to GBP25.0
million in aggregate using the B Share Scheme and the Tender Offer.
It is proposed certain changes to the Existing Articles are made by
the adoption of the New Articles in order to enable to Company to
use the B Share Scheme mechanism, as set out in further detail at
paragraph 2.4 below.
-- Subsequent returns of capital pursuant to the Managed
Wind-Down at the appropriate times at the Board's discretion by
utilising further tender offers.
The Company reserves the right to use alternative mechanisms to
return cash to Shareholders from time to time if the Board believes
any such mechanisms to be in the best interests of Shareholders as
a whole or if any of the B Share Resolutions, the Tender Offer
Resolution or the Future Tender Offer Resolution are not
passed.
Further details of each of the proposed methods of returning
capital to Shareholders is set out below.
(a) B Share Scheme
The Board proposes to adopt a B Share Scheme whereby the Company
will issue redeemable B Shares with an aggregate paid up nominal
share capital equal to the amount of cash available for this
purpose of approximately GBP10.4 million, with such B Shares then
immediately being redeemed for cash without further action being
required by Shareholders.
It is intended that the Initial Return of Capital pursuant to
the B Share Scheme, together with the Tender Offer as detailed in
the next paragraph, will be used to effect a return of the Augean
Proceeds to Shareholders. The Board is unlikely to use the B Share
Scheme to effect further Returns of Capital to Shareholders, as it
is likely that the use of the B Share Scheme as part of the Initial
Return of Capital will substantially erode the amount which the
Company can return to Shareholders as capital for UK tax purposes.
Further details of the B Share Scheme and the proposed amendments
to the Existing Articles to effect the B Share Scheme are set out
in Parts 3 and 4 of the Circular.
How will cash be returned via the B Shares?
Subject to the B Share Resolutions being passed, the Company
will have a mechanism to enable it to return cash to Shareholders
at such times as the Board may, in its absolute discretion,
determine by capitalising part of the amount standing to the credit
of the Company's share premium account and then applying the
resulting amount for the purpose of paying up the nominal value of
the appropriate number of B Shares. Such B Shares would then be
issued to Shareholders pro rata to their holding of Shares at the
time of issue of the B Shares and, shortly thereafter, be redeemed
and cancelled in accordance with their terms for an amount not
exceeding the amount treated as paid up on the issue of the B
Shares. The Company will not allot any fractions of B Shares and
entitlements will be rounded down to the nearest whole B Share.
Following the redemption and cancellation of the B Shares, the
redemption proceeds would be sent to Shareholders, either through
CREST to uncertificated Shareholders or via cheque to certificated
Shareholders. Each issue and redemption would be announced via
Regulatory Information Services and each Shareholder would also be
notified via email by the Company's Registrar.
Further details of the B Share Scheme are set out in Parts 3 and
4 of the Circular.
The structure of a B Share Scheme should result in UK
Shareholders receiving their cash proceeds on redemption of the B
Shares as capital for UK tax purposes. Shareholders attention is
drawn to Part 8 of the Circular which sets out a summary guide to
certain potential tax consequences in the UK.
Advantages of returning cash via B Shares
The advantages of returning capital via the B Share Scheme
rather than via a tender offer are as follows.
(i) All Shareholders would automatically participate in the
redemption process and they would be treated equally.
(ii) Subject to the B Share Resolutions being passed at the
General Meeting, Shareholders should not be required to take any
further action to give effect to the Return of Capital pursuant to
the B Share Scheme.
(iii) This provides greater certainty for the Company regarding
the rate of return of capital to Shareholders (unlike tender
offers, capital returns under the B Share Scheme would be mandatory
and would apply to all Shareholders on a pro rata basis).
However, for some Shareholders, there may be some disadvantages
in returning capital via the B Share Scheme relating to the timing
and mandatory nature of the scheme. Unlike a tender offer,
Shareholders would not be given a choice as to whether or not to
participate in the Initial Return of Capital and, for those
Shareholders who hold Shares through a number of different
vehicles, they would not be given the choice as to which of their
vehicles should participate in the Initial Return of Capital. This
could potentially lead to adverse tax consequences for Shareholders
as they may not be able to structure their returns in the most tax
efficient manner.
Taxation of the B Share Scheme
Based on current United Kingdom tax law, it is expected that the
redemption of B Shares pursuant to the Initial Return of Capital
should be treated as a disposal by the Shareholder of their B
Shares for United Kingdom tax purposes. This may, subject to the
Shareholder's individual circumstances and any available exemption
or relief, give rise to a chargeable gain (or allowable loss) for
the purposes of United Kingdom taxation of chargeable gains.
For further information regarding taxation on redemptions of B
Shares please see Part 8 of the Circular.
Further information on the B Shares
No share certificates would be issued in relation to the B
Shares and the B Shares will not be listed or admitted to trading
on AIM or on any other securities or investment exchange or trading
platform.
The B Shares would be non-transferable and will have limited
rights, including a right to a very small dividend at a fixed rate.
Any dividend would not be payable through CREST but by cheque or
BACS only.
Given the very short period of time for which any B Share would
be in issue, it is unlikely that any dividends would become payable
on the B Shares. The rights and restrictions attached to the B
Shares are set out more fully in Part 4 of the Circular.
Proposed Initial Return of Capital pursuant to the B Share
Scheme
Subject to the passing of the B Share Resolutions at the General
Meeting, the Board intends to return approximately GBP10.4 million
to Shareholders via an issue of B Shares. B Shares of GBP1 each
will be paid up from capital and issued to all Shareholders by way
of a bonus issue pro rata to their holding of Shares on the basis
of three B Shares for every one Share held at the Record Date of
6:00 p.m. on 15 December 2021. The B Shares are expected to be
issued on 16 December 2021 and immediately redeemed at GBP1 per B
Share. The Redemption Date in respect of the Initial Return of
Capital is 16 December 2021. The proceeds from the redemption of
the B Shares, which is equivalent to 100 pence per Share, will be
sent to Shareholders through CREST to uncertificated Shareholders
or via cheque to certificated Shareholders. The Initial Return of
Capital pursuant to the B Share Scheme will represent approximately
16.0 per cent. of the Company's Net Asset Value as at 19 November
2021, being the latest published Net Asset Value prior to the
publication of the Circular.
(b) Tender Offer
As the B Share Scheme will not effect a full return of the
Augean Proceeds and other cash available, the Board proposes to
supplement the B Share Scheme with the Tender Offer, in order to
return the balance of the free cash of approximately GBP14.6
million to Shareholders. Further details of the Tender Offer are
set out in Part 5 of the Circular.
Benefits of the Tender Offer
The Board considered the various options for returning cash to
Shareholders and determined that, in conjunction with the B Share
Scheme, the Tender Offer would be the most appropriate means of
returning cash to Shareholders. In particular, the Tender
Offer:
-- provides Qualifying Shareholders with the choice of whether
or not they wish to tender all or part of their respective
Individual Basic Entitlements; and
-- enables those Qualifying Shareholders who do not wish to
receive cash at this time to maintain their full investment in the
Company.
Structure of the Tender Offer
The Tender Offer will be implemented on the basis of finnCap
acquiring, as principal, the successfully tendered Shares at the
Tender Price. Following completion of those purchases, finnCap will
then sell all the tendered Shares back to the Company at the same
price pursuant to the Repurchase Agreement by way of an on-market
transaction on AIM. Details of the Repurchase Agreement are set out
in paragraph 4 of Part 9 of the Circular . The Company intends to
cancel any repurchased Shares. The repurchase of Shares by the
Company under the Repurchase Agreement will be financed using the
Company's distributable reserves.
Under the terms of the Tender Offer, which is being made by
finnCap, Shareholders (other than Restricted Shareholders and
certain Overseas Shareholders) will be entitled to tender up to
their Individual Basic Entitlement, rounded down to the nearest
whole Sha re. Shareholders may also tender additional Shares, but
any such excess tenders above the Individual Basic Entitlement will
only be satisfied, on a pro rata basis, to the extent that other
Shareholders tender less than their aggregate Individual Basic
Entitlement.
The Tender Price and the Individual Basic Entitlement will be
announced on 13 December 2021, alongside the Company's NAV per
Share as at 9 December 2021, together with the potential impact of
tax on the Company's NAV on the assumption that the portfolio were
fully liquidated in the current financial year, providing an
Adjusted Post Tax NAV per Share. The Tender Price will be
calculated in accordance with paragraph 7 of Part 5 of the Circular
and will represent a 2.0 per cent. discount to the Adjusted Post
Tax NAV per Share as at 9 December 2021. The Individual Basic
Entitlement will be calculated by dividing GBP14.6 million by the
Tender Price to give the maximum number of Shares that will be
purchased under the Tender Offer. The Individual Basic Entitlement
will equal the percentage of the Company's issued share capital
that the aggregate number of Shares to be purchased under the
Tender Offer represents.
Qualifying Shareholders can decide whether they want to tender
all, some or none of their Individual Basic Entitlement in the
Tender Offer at the Tender Price.
Shareholders may tender Shares in excess of their Individual
Basic Entitlement where other Shareholders tender less than their
Individual Basic Entitlement and subject to the scaling back of
tenders, as set out in paragraph 2.4 of Part 5 of the Circular.
All valid tenders made by a Qualifying Shareholder of a number
of Shares less than or equal to its Individual Basic Entitlement,
will be satisfied in full (subject to the Tender Offer not being
withdrawn prior to its completion and satisfaction in full of the
other terms and conditions set out in Part 5 of the Circular and
(where relevant) the Tender Form).
The Tender Offer will close at 1:00 p.m. on 17 December 2021 and
tenders received after that time will not be accepted (unless the
Tender Offer is extended).
Number of Shares to be purchased
Successfully tendered Shares will be purchased by finnCap free
of commission and dealing charges.
Any Shares repurchased by the Company from finnCap following the
purchase by finnCap will be cancelled. Any rights of Shareholders
who do not participate in the Tender Offer will be unaffected by
the Tender Offer.
Circumstances in which the Tender Offer may not proceed
The Tender Offer is conditional on, among other things, the
passing of the Tender Offer Resolution as set out in the Notice of
Requisitioned General Meeting and on satisfaction of the other
conditions specified in Part 5 of the Circular.
The Tender Offer is also conditional on there not arising any
material adverse change or certain other force majeure events prior
to the closing of the Tender Offer. Further details of these
conditions are set out in paragraph 2.1 of Part 5 of the
Circular.
Full terms and conditions of the Tender Offer
Full details of the Tender Offer, including the terms and Tender
Conditions on which it is made, are set out in Part 5 of the
Circular. Some questions and answers related to the Tender Offer
are set out in Part 6 of the Circular.
Existing Share buy-back authority
The Company's authority to repurchase its own Shares, which was
granted at the last annual general meeting of the Company held on
26 July 2021, in respect of up to 521,785 Shares, will remain in
force and be unaffected by the Tender Offer.
To the extent that the Tender Offer is not taken up in full
(including by way of excess tender applications), the Board intends
to utilise the existing buy-back authority to conduct on-market
buy-backs of Shares to return the full amount of the Tender Offer
as soon as possible.
Costs and expenses of the Tender Offer
The costs and expenses relating to the Tender Offer will be
reflected in the Tender Price and so will be borne by the Shares
tendered. Such costs and expenses are not expected to exceed
GBP186,000 (excluding portfolio realisation costs but including
VAT).
Taxation in respect of the Tender Offer
Shareholders should be aware that there will be tax
considerations that they should take into account when deciding
whether or not to participate in the Tender Offer. Summary details
of certain UK taxation considerations are set out in Part 8 of the
Circular.
(c) Further returns of capital pursuant to the Managed Wind-Down
To enable the Company to effect further returns of capital to
Shareholders to complete the proposed Managed Wind-Down over the
next 24 months following the date of the General Meeting, the Board
is also proposing a resolution to approve Future Tender Offers to
enable the return of the further capital in the Company without
further action being required by Shareholders until a replacement
authority is sought at the Company's next annual general meeting.
As noted above, the Board does not expect to use the B Share Scheme
to effect further Returns of Capital to Shareholders, as the amount
expected to be returned under the B Share Scheme as part of the
Initial Return of Capital, is expected to substantially erode the
amount which the Company can return to Shareholders as capital for
UK tax purposes.
In order to effect further tender offers the Company will need
to increase its distributable reserves and therefore also proposes
a resolution to authorise the cancellation of the whole of its
capital redemption reserve, together with any remaining share
premium reserve after the B Shares are issued pursuant to the B
Share Scheme in respect of the Initial Return of Capital, so that
the Company may seek a court-approved capital reduction for this
purpose. Further details of the cancellation of the capital
redemption reserve and remaining share premium reserve are set out
in paragraph 2.5 . It is the Board's intention that Future Tender
Offers will be conducted at prices per share which represent the
lowest discount at which it can be shown that those participating
in the relevant tender offer carry the costs of such tender without
detriment to other Shareholders who may not be able to participate
in any event at a discount of no more than 2.5 per cent. to the
Adjusted Post Tax NAV per Share at the time of such future
tender.
In line with the Company's proposed New Investment Policy, the
Board will aim to conduct an orderly realisation of the Company's
assets in a manner that seeks to achieve a balance between
maximising the value of the Company's investments and progressively
returning cash to Shareholders. The quantum and timing of a Return
of Capital to Shareholders following receipt by the Company of the
net proceeds of realisations of investments will be dependent on
the Company's liabilities and general working capital
requirements.
Accordingly, the quantum and timing of any Return of Capital
will be at the discretion of the Board, which will announce details
of each Return of Capital through an RIS announcement.
2.4 Adoption of the New Articles
It is proposed that the rights attaching to the B Shares be
included as new article 169 of the New Articles. Such rights set
out when and how the B Shares may be issued and redeemed and are
necessary for the implementation of the B Share Scheme. Please
refer to Part 4 of the Circular for a summary of the rights
attaching to the B Shares.
As there are no longer any of the historic B shares or C shares
in the capital of the Company in existence, it is also proposed
that existing articles 165 (in respect of the historic B shares)
and 166 (in respect of the historic C shares) of the Existing
Articles be deleted in accordance with the provisions of existing
articles 165.6 and 166.6, together with any consequential
amendments that may be required to the rest of the Existing
Articles.
A copy of the Existing articles and the New Articles marked to
show the changes will be available during normal business hours
(Saturdays, Sunday and public holidays excepted) at the Company's
registered office from the date of the Circular up to and including
close of business on 15 December 2021 and the venue of the General
Meeting for at least 15 minutes prior to the start of the meeting
and up until the close of the meeting. A copy of the New Articles
will also be placed for review on the Company's Website.
2.5 Court approved Capital Reduction
When carrying out any Future Tender Offers, the Company will be
limited to the amount of its distributable reserves available at
the time. To give the Board more flexibility, the Board proposes to
carry out the Capital Reduction to increase its distributable
reserves by the amount by which its capital redemption reserve and
share premium account are reduced.
(a) Capital Redemption Reserve & Share Premium Reduction
The Companies Act treats a capital redemption reserve as if it
were part of the Company's paid up share capital. The Company
therefore only has two options for dealing with the capital
redemption reserve. It may either (a) apply it in paying up
unissued shares of the Company to be allotted to members of the
Company as fully paid bonus shares; or (b) reduce it pursuant to
the Companies Act provisions in the same way as it may reduce its
share capital generally. The Board is recommending that any amount
standing to the credit of the Company's capital redemption reserve
be cancelled so that the total amount standing to the credit of the
Company's capital redemption reserve following such reduction will
be GBPnil.
In addition, the Companies Act requires that, if a company
issues shares at a premium to the nominal value of those shares,
whether for cash or otherwise, a sum equal to the aggregate amount
or value of the premiums must be transferred to the company's share
premium account. A share premium account can only be used in very
limited circumstances. The Board is recommending that any amount
standing to the credit of the Company's share premium reserve after
the B Shares are issued pursuant to the B Share Scheme in respect
of the Initial Return of Capital be cancelled so that the total
amount standing to the credit of the Company's share premium
account following such reduction will be GBPnil.
The Board intends to use the reserves created pursuant to the
Capital Reduction to carry out the Future Tender Offers.
(b) Shareholder and Court Approval
Shareholder approval is being sought to carry out the Capital
Reduction pursuant to Resolution 8 set out in the Notice of
Requisitioned General Meeting. In addition to approval by the
Shareholders, the Capital Reduction requires the confirmation of
the Court. Accordingly, following approval of the Capital Reduction
by Shareholders, an application will be made to the Court in order
to confirm and approve the Capital Reduction.
In confirming the Capital Reduction, the Court may need to be
satisfied that there is no real likelihood of any creditor of the
Company remaining unpaid by reason of the Capital Reduction. The
Company anticipates being able to satisfy the Court in that regard
and will put into place such form of creditor protection as it
considers appropriate in the circumstances. The Board has
undertaken a thorough and extensive review of the Company's
liabilities (including contingent liabilities) and considers that
the Company will be able to satisfy the Court that, as at the date
on which the Court Order relating to the Capital Reduction and the
statement of capital in respect of the Capital Reduction have both
been registered by the Registrar of Companies at Companies House
and the Capital Reduction therefore becomes effective, the
Company's creditors will be sufficiently protected.
The Court approval process will involve an initial directions
hearing and a subsequent final hearing by the Court to confirm the
Capital Reduction and the Capital Reduction becoming effective as
soon as possible thereafter, following the necessary registration
of, amongst other things, the order of the Court confirming the
Capital Reduction at Companies House. Based on current guidance
from Companies House, it is anticipated that Companies House will
take at least 14 calendar days from the date of the Court Order to
register the Court Order and related documents.
The Board reserves the right to abandon or to discontinue (in
whole or in part) the application to the Court in the event that
the Board considers that the terms on which the Capital Reduction
would be (or would be likely to be) confirmed by the Court would
not be in the best interests of the Company and/or the Shareholders
as a whole.
3. Related party transaction - Amendments to the Harwood Agreements
In connection with Harwood's appointment as investment manager
of the Company, the Company and Harwood are party to the following
agreements (together, the "Harwood Agreements"):
-- an investment management agreement dated 10 October 2021 ("Existing IMA");
-- a conditional subscription letter relating to the proposed
subscription of shares in the Company by Harwood dated 10 October
2021 ("Subscription Letter");
-- a side letter to the Existing IMA relating to, among other
things, financial commitments by Harwood to the Company's marketing
budget ("Side Letter"); and
-- a conditional relationship agreement to regulate the
relationship between the Company and Harwood dated 10 October 2021
("Relationship Agreement").
On 29 November 2021, the Company and Harwood entered into a
conditional amendment and restatement agreement of the Existing IMA
("New IMA"), to reflect the impact the proposed Managed Wind-Down
will have on Harwood's role as investment manager. The New IMA is
conditional on Shareholder approval of Resolutions 2 and 3.
With effect from the passing of Resolutions 2 and 3, the key
amendments to the Existing IMA are as follows:
-- Harwood's appointment as investment manager is no longer for
a minimum of one year, such that it could be terminated on six
months' notice at any time;
-- Harwood shall not be entitled to a management fee or
performance fee (if applicable) unless the New IMA is terminated by
the Company without cause, in which case Harwood will be entitled
to the management fees and performance fees it would have received
under the Existing IMA up to the date of termination of the New
IMA. Any termination payment will be no greater than that which
would have been payable under the Existing IMA. The fees payable
under the Existing IMA would be:
o 1.25 per cent. of NAV up to GBP25 million and 1.0 per cent. of
NAV thereafter per annum; and
o a performance fee equal to 10 per cent. of outperformance over
the higher of a 6 per cent. per annum total return hurdle and the
high watermark;
-- the services of Harwood as investment manager have been
amended to reflect that it will be managing the Company in
accordance with the New Investment Policy; and
-- Richard Staveley is expected to act as a consultant to
Harwood and Christopher Mills will act as lead fund manager.
As GHE rejected Harwood's offer to purchase its entire holding
in the Company, the Subscription Letter and Relationship Agreement
have not become unconditional, so the Company and Harwood have
entered into a side letter confirming the Subscription Letter and
Relationship Agreement have terminated and no longer have any
effect. In addition, subject to shareholder approval of Resolutions
2 and 3, the Company and Harwood have agreed to amend the Side
Letter by deleting Harwood's contractual commitment to make certain
financial contributions to the Company's marketing budget, as this
will not be necessary in a Managed Wind-Down.
Harwood is treated as a related party for the purposes of the
AIM Rules for Companies. Accordingly, the proposed changes to the
Harwood Agreements as set out above constitute a related party
transaction in accordance with rule 13 of the AIM Rules for
Companies. The Directors, having consulted with finnCap, in its
capacity as nominated adviser to the Company, consider the terms of
the proposed changes to the Harwood Agreements to be fair and
reasonable insofar as the Shareholders are concerned.
4. Company outlook
The Board notes that the Company's interim results for the six
month period to 30 September 2021 are expected to be published in
December 2021. Shareholders are advised to review that announcement
to receive an update on the Company's financial position.
The Board expects the Managed Wind-Down will likely take up to
24 months to execute with the objective of delivering investors
total proceeds which maximise the value of investments in the
wind-down period less expenses required in the process.
The Board expects to lower the Company's cost base over the
coming months. The goal in the Managed Wind-Down will be to achieve
a balance between maximising the value received from those assets
and making timely returns of capital to Shareholders.
5. Dividends
The Company paid a final dividend of 15.36 pence to Shareholders
for the financial year ended 31 March 2021. Since then, no other
dividends have been paid. As part of the Managed Wind-Down, the
Company will continue to accumulate cash enabling it to continue
returning cash to Shareholders in an orderly manner. However, the
Board does not expect to declare any dividends in respect of the
financial year to 31 March 2022, as its accumulated cash is
expected to be used to return cash by way of a Return of
Capital.
6. Risk factors
Shareholders' attention is drawn to the risk factors set out in
Part 7 of the Circular. Shareholders should review the risk factors
which set out certain factors that should be considered by
Shareholders when deciding what action to take in relation to the
Proposals.
With regards to taxation, Shareholders who are in any doubt as
to what their tax position would be should the Proposals be
adopted, are encouraged to consult an appropriate professional
adviser.
7. Overseas Shareholders
The attention of Shareholders who are not resident in the United
Kingdom is drawn to paragraph 5 of Part 3 of the Circular (in
respect of the B Share Scheme) and paragraph 6 of Part 5 of the
Circular (in respect of the Tender Offer).
8. Takeover Code
Shareholders' attention is drawn to important information set
out in paragraph 5 of Part 9 of the Circular relating to certain
provisions of the Takeover Code which will be relevant to purchases
of Shares after the date of the Circular.
9. Details of the General Meeting
Location, Date and Time
The Proposals are subject to Shareholder approval. Set out in
the Circular is the Notice of Requisitioned General Meeting to be
held at the offices of finnCap, One Bartholomew Close, London, EC1A
7BL at 2:00 p.m. on 15 December 2021, where the following
resolutions will be proposed:
Resolutions
Resolutions 1 to 5 are proposed as ordinary resolutions and
Resolutions 6 to 9, as special resolutions.
If passed, the B Share Resolutions will allow the Company to
return capital to Shareholders through a bonus issue of B Shares.
Shortly after their date of issue, the B Shares would be redeemed
at the option of the Company and cancelled in accordance with their
terms. The redemption proceeds would then be sent to Shareholders,
as set out more fully in Parts 3 and 4 of the Circular. Subject to
the B Share Resolutions being passed, the Initial Return of Capital
would be implemented at the discretion of the Company.
-- Resolution 1 is proposed as an ordinary resolution to effect
the immediate return of cash on the Company's balance sheet
(including the proceeds arising from the disposal of its interest
in Augean plc) to its existing Shareholders.
-- Resolution 2 is proposed as an ordinary resolution which
authorises the Directors to commence the complete realisation of
the Company's assets to maximise the value of its assets for the
benefit of all its Shareholders, with such realisation and return
of capital to Shareholders to be completed within 24 months of the
General Meeting.
-- Resolution 3 is proposed as an ordinary resolution
(conditional on Resolution 2 being passed) which authorises the
Directors to adopt the New Investment Policy, as set out at Part 2
of the Circular, in substitution for the Current Investment
Policy.
-- Resolution 4 is proposed as an ordinary resolution
(conditional on Resolutions 1 and 6 being approved) which
authorises the Directors to capitalise the sums standing to the
credit of certain of the Company's reserves and to apply such sums
in paying up in full up to 10,442,652 B Shares for the purpose of
the Initial Return of Capital.
-- Resolution 5 is proposed as an ordinary resolution
(conditional on Resolutions 1, 4 and 6 being approved) which
authorises the Directors to issue B Shares from time to time up to
an aggregate nominal amount of GBP10,442,652 on a pro rata basis to
the holders of Shares by way of bonus issues. If approved, this
authority to allot and issue B Shares will expire and, if the
Directors consider appropriate, be proposed for renewal, at the
next annual general meeting of the Company in 2022 and at each
annual general meeting thereafter.
-- Resolution 6 is proposed as a special resolution (conditional
on Resolution 1 being approved) and relates to the adoption of the
New Articles which set out the rights of the B Shares as described
in Part 4 of the Circular and enable the Directors to capitalise
reserves from time to time for the purposes of the B Share Scheme
with the authority which will be sought pursuant to Resolutions 4
and 5.
-- Resolution 7 is proposed as a special resolution (conditional
on Resolution 1 being approved) and relates to the approval of the
Tender Offer, further details of which are set out in Parts 5 and 6
of the Circular and will enable the Directors to make market
purchases of ordinary shares for the purposes of the Tender
Offer.
-- Resolution 8 is proposed as a special resolution (conditional
on Resolution 2 being approved) and relates to the cancellation of
the Company's capital redemption reserve together with any
remaining share premium reserve after the B Shares are issued
pursuant to the B Share Scheme in respect of the Initial Return of
Capital, to be effected by way of the Capital Reduction to create
further distributable reserves from which the Directors may make
further tender offers for ordinary shares for the purposes of
further returns of capital pursuant to the Managed Wind-Down.
-- Resolution 9 is proposed as a special resolution (conditional
on Resolution 2 being approved) and relates to the approval of
further tender offers which may be announced at the Directors'
discretion, to enable the Directors to make market purchases of
ordinary shares for the purposes of further returns of capital
pursuant to the Managed Wind-Down.
Voting and attendance
The Resolutions will be conducted on a poll. An ordinary
resolution will require more than 50 per cent. of the votes cast
(whether in person or by proxy) to be in favour in order for it to
be passed. A special resolution requires at least 75 per cent. of
the votes cast (whether in person or by proxy) to be in favour in
order for it to be passed.
All Shareholders are entitled to attend and vote at the General
Meeting.
In accordance with the Existing Articles, all Shareholders
entitled to vote and be present in person or by proxy at the
General Meeting shall upon a poll have one vote in respect of each
Share held. In order to ensure that a quorum is present at the
General Meeting, it is necessary for two or more Shareholders to be
present in person or by proxy (or, if a corporation, by
representative).
Voting at the General Meeting / Form of Proxy
All Shareholders are encouraged to vote in favour of the
Resolutions to be proposed at the General Meeting and if the Shares
not held directly, to arrange for their nominee to vote on their
behalf.
Participation in the Tender Offer
Only Shareholders whose names appear on the Register on the
Tender Offer Record Date, being 6:00 p.m. on 17 December 2021, are
able to participate in the Tender Offer in respect of the Shares
held as at that time.
The results of the General Meeting will be announced through a
Regulatory Information Service and the Company's Website as soon as
possible once known. It is expected that this will be on 15
December 2021.
10. Intentions of GHE and the Directors relating to the Tender Offer
The Company has received an irrevocable undertaking from GHE
to:
-- accept the Tender Offer in respect of not less than such
number of Shares held by GHE so as to ensure that, assuming that
the Tender Offer is taken up in full (including by way of excess
tender applications) at the Tender Price calculated and announced
in accordance with the terms of the Tender Offer, and on the basis
of 3,480,884 ordinary shares in issue before the Tender Offer,
GHE's interest in the Shares, when aggregated with the interests of
Shares of those shareholders in the Company ("Other CP Members")
who have been deemed by the Panel on Takeovers and Mergers to be
acting in concert with GHE for the purposes of the Takeover Code,
(such aggregate currently amounting to 24.92% of the issued
ordinary shares of the Company (867,491 ordinary shares), will
amount to 29.9% of the ordinary shares of the Company following the
Tender Offer, assuming, purely for the purposes of this
calculation, that no Other CP Member accepts the Tender Offer ;
and
-- vote in favour of all of the Resolutions in respect of the
812,913 Shares in which GHE holds an interest.
Further details of this irrevocable undertaking are set out in
paragraph 3 of Part 9 of the Circular.
In addition, those Directors who hold Shares intend to tender at
least their full Individual Basic Entitlements under the Tender
Offer, comprising 32,373 Shares in aggregate (representing
approximately 0.93 per cent. of the issued ordinary share capital
of the Company as at 26 November 2021 (being the latest practicable
date prior to the publication of the Circular)).
11. Recommendation
The Board believes, having taken into account the views of a
range of major Shareholders who have expressed their intention to
support Resolutions 1 and 2, that the Proposals are in the
interests of the Company and its Shareholders as a whole, and
should yield the following principal benefits:
-- implementing the Managed Wind-Down is expected to achieve a
balance between maximising the net value received from those
investments and making timely returns to Shareholders; and
-- the Proposals will allow cash to be returned to Shareholders
in a cost-effective, tax-efficient and timely manner through the
proposed B Share Scheme, Tender Offer and Future Tender Offers (or
by way of such other mechanisms which the Directors consider, in
their discretion, are in the best interests of Shareholders from
time to time).
Accordingly, the Board recommends that Shareholders vote in
favour of the Resolutions to be proposed at the General Meeting.
Graham Bird intends to vote in favour of all of the Resolutions in
respect of his own beneficial holdings amounting to 26,543 Shares
representing 0.76 per cent. of the issued share capital of the
Company as at 26 November 2021 (being the latest practicable date
prior to the publication of the Circular). Kenneth Lever, being the
only independent non-executive director present at the time of the
conclusion of the Strategic Review, does not intend to support
Resolutions 1 and 2 but will support the remaining resolutions on
the basis that they are necessary to implement Resolutions 1 and 2
which are very likely to be passed as a result of the support of
GHE and certain other Shareholders.
The Board makes no recommendation to Shareholders as to whether
or not they should tender all or any of their Shares in the Tender
Offer. Whether or not Shareholders decide to tender their Shares
will depend, amongst other factors, on their view of the Company's
prospects and their own individual circumstances, including their
own tax position. If you are in any doubt as to the action you
should take, you are recommended to seek your own independent
advice.
Enquiries:
Gresham House Strategic
Simon Pyper, Chairman +44 (0) 20 7220 0500
Harwood Capital LLP
Christopher Mills + 44 (0) 20 7640 3200
finnCap (Nominated Adviser and Joint Broker
to GHS)
William Marle / Carl Holmes / Mark Whitfeld
/ Pauline Tribe +44 (0) 20 7220 0500
Panmure Gordon (UK) Limited (Joint Broker to
GHS)
Sapna Shah / Alex Collins +44 (0) 20 7886 2500
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) 596/2014 as it forms part of UK law
by virtue of the European Union (Withdrawal) Act 2018 ("MAR"). For
the purposes of MAR, the person responsible for releasing this
announcement is Shaun Zulafqar, Company Secretary.
This announcement may contain "forward-looking statements" with
respect to certain of the Company's plans and its current goals and
expectations relating to its future financial condition,
performance, strategic initiatives, objectives and results.
Forward-looking statements sometimes use words such as "aim",
"anticipate", "target", "expect", "estimate", "intend", "plan",
"goal", "believe", "seek", "may", "could", "outlook" or other words
of similar meaning. By their nature, all forward-looking statements
involve risk and uncertainty because they relate to future events
and circumstances which are beyond the control of the Company.
As a result, the actual future financial condition, performance
and results of the Company may differ materially from the plans,
goals and expectations set forth in any forward-looking statements.
Any forward-looking statements made in this announcement by or on
behalf of the Company speak only as of the date they are made. The
information contained in this announcement is subject to change
without notice and except as required by applicable law or
regulation, the Company expressly disclaims any obligation or
undertaking to publish any updates or revisions to any
forward-looking statements contained in this announcement to
reflect any changes in the Company's expectations with regard
thereto or any changes in events, conditions or circumstances on
which any such statements are based.
Neither the content of the Company's website (or any other
website) nor the content of any website accessible from hyperlinks
on the Company's website (or any other website) is incorporated
into or forms part of this announcement.
Appendix
PROPOSED NEW INVESTMENT POLICY
It is proposed that, if the Proposals are approved, the Current
Investment Policy will be deleted in its entirety and replaced with
the New Investment Policy set out below.
Investment Policy:
The Company will be managed with the intention of realising all
remaining investments in a prudent manner consistent with the
principles of good investment management and with a view to
returning cash to Shareholders in an orderly manner, with such
realisations and returns of cash to Shareholders to be completed
within 24 months of the General Meeting.
The Company will pursue the investment policy by effecting an
orderly realisation of the investments of the Company in a manner
that seeks to achieve a balance between maximising the value
received from those investments and making timely returns of
capital to Shareholders.
The Company will cease to make any new investments except where,
in the opinion of the Investment Manager, and with the approval of
the Board:
-- the investment is a follow-on investment made in connection
with an existing asset held by the Company in order to comply with
the Group's pre-existing obligations; or
-- failure to make the follow-on investment may result in a
breach of contract or applicable law or regulation by the Group;
or
-- the investment is considered necessary by the Board to
protect or enhance the value of any existing investments of the
Company or to facilitate orderly disposals of assets held by the
Company.
Any cash received by the Company as part of the realisation
process prior to its distribution to Shareholders will be held by
the Company, on behalf of the Shareholders, as cash on deposit
and/or as cash equivalents.
The Company does not intend to undertake any new borrowings
although the Company may borrow where, in the opinion of both the
Board and the Investment Manager, necessary for working capital
purposes or to protect or enhance the value of an existing
investment of the Company and the Company does not have the
available equity capital to fund the investment. Any such
borrowings are expected to be short-term and would be repaid
following the realisation of assets.
At the end of the proposed 24 month period, should any of the
Company's investments remain unrealised, the Board will make
arrangements to seek Shareholder approval as to whether to extend
the realisation period or put the company into members' voluntary
liquidation.
Any material change to the New Investment Policy would require
Shareholder approval in accordance with the AIM Rules.
DEFINITIONS
The following definitions apply throughout this announcement
unless the context otherwise requires:
"Act" the Companies Act 2006, as amended
"Adjusted Post Tax the NAV after appropriate provision for taxation
NAV" in accordance with generally accepted accounting
principles as defined by IFRS
"AIM" the AIM Market of the London Stock Exchange
"AIM Rules" the AIM Rules for Companies, as published
by the London Stock Exchange from time to
time
"Annual General Meeting" an annual general meeting of the Company
"Augean Proceeds" the cash proceeds from the completed takeover
offer for Augean plc
"B Share Resolutions" means Resolutions 4, 5 and 6
"B Share Scheme" the proposed mechanism to enable returns
of capital through the issue and redemption
of B Shares
"B Shares" unlisted redeemable fixed rate preference
shares of GBP1 each in the capital of the
Company carrying the rights and restrictions
set out in Part 4 of the Circular
"Board" or "Directors" the board of directors of the Company, including
any duly constituted committee thereof
"Capital Reduction" the proposed Court approved cancellation
of the Company's capital redemption reserve
and any remaining share premium reserve after
the B Shares are issued pursuant to the B
Share Scheme in respect of the Initial Return
of Capital
"Circular" the Company's circular to be published today
in relation to the Proposals
"Company" or "GHS" Gresham House Strategic plc
"Company's Website" https://greshamhouse.com/strategic-equity/public-equity/gresham-house-strategic-plc
"Court" the High Court of Justice in England and
Wales
"Court Order" order of the Court confirming the Capital
Reduction
"CREST" the facilities and procedures for the time
being of the relevant system of which Euroclear
has been approved as operator pursuant to
the CREST Regulations
"CREST manual" the manual, as amended from time to time,
produced by Euroclear describing the CREST
system and supplied by Euroclear to users
and participants thereof
"CREST Participant" a person who is, in relation to CREST, a
system participant (as defined in the CREST
Regulations)
"CREST Regulations" the Uncertificated Securities Regulations
2001 (SI 2001 No. 3755), as amended from
time to time
"Current Investment the investment policy of the Company as at
Policy" the date of the Circular
"Euroclear" Euroclear UK & Ireland Limited, the operator
of CREST
"Existing Articles" the current articles of association of the
Company as adopted on 22 September 2015
"Existing IMA" has the meaning given to it in paragraph
3 of this announcement
"FCA" the UK Financial Conduct Authority or its
successor from time to time
"Future Tender Offer" a future invitation by an intermediary to
each Shareholder (other than Restricted Shareholders
and certain Overseas Shareholders) to tender
up to proportion of their Shares
"Future Tender Offer the special resolutions numbered 8 and 9
Resolutions" to be proposed at the General Meeting, as
set out in the Notice of Requisitioned General
Meeting
"General Meeting" the general meeting of the Company convened
for at 2:00 p.m. on 15 December 2021, or
any adjournment of that meeting the notice
for which is set out at the end of the Circular
"GHAM" Gresham House Asset Management Limited, the
Company's former investment manager
"GHE" Gresham House plc, the Company's largest
Shareholder, representing 23.4 per cent.
of the Company's issued share capital and
the parent company of GHAM
"Harwood" Harwood Capital LLP
"Harwood Agreements" has the meaning given to it in paragraph
3 of this announcement
"Independent Directors" the independent directors of the Company
at the time of the Strategic Review, being
Helen Sinclair, Ken Lever and Charles Berry
"Individual Basic Entitlement" the number of Shares that each Shareholder
will be entitled to sell to finnCap (expressed
as a percentage), which will be calculated
in accordance with the provisions of paragraph
7 of Part 5 of the Circular and is expected
to be announced on 13 December 2021
"Initial Return of has the meaning given to it in paragraph
Capital" 1 of this announcement
"Investment Manager" Harwood, Company's current investment manager
"Managed Wind-Down" the proposed wind-down of the Company to
effect the full realisation of the Company's
assets and the Returns of Capital to Shareholders
as described in the Circular
"NAV" or "Net Asset the value of the assets of the Company less
Value" its liabilities determined in accordance
with the accounting principles adopted by
the Company from time to time
"Net Asset Value per the Net Asset Value divided by the number
Share" or "NAV per of Shares then in issue (excluding treasury
Share" shares)
"New Articles" the new articles of association of the Company,
which it is proposed are adopted by Shareholders
at the General Meeting pursuant to Resolution
6
"New IMA" has the meaning given to it in paragraph
3 of this announcement
"New Investment Policy" the proposed new investment policy of the
Company as set out in Part 2 of the Circular
"Notice of Requisition" a request to requisition a general meeting
of the Company received by the Board from
the Requisitionist to propose the discontinuation
of the activities, and to liquidate the assets,
of the Company by way of a return of capital,
as announced by the Company on 15 October
2021
"Notice of Requisitioned the notice of the General Meeting which is
General Meeting" set out in Part 2 of the Circular
"Other CP Members" has the meaning given to it in paragraph
10 of this announcement
"Overseas Shareholders" Shareholders resident in, or citizens or
nationals of, jurisdictions outside the United
Kingdom
"Proposals" has the meaning given to it in paragraph
1 of this announcement
"Qualifying Shareholder" Shareholders who are entitled to participate
in the Tender Offer, being those who are
on the Register on the Tender Offer Record
Date and excluding those with registered
addresses in a Restricted Jurisdiction
"Record Date" in respect of any Return of Capital pursuant
to the B Share Scheme, the date determined
by the Board, at its absolute discretion,
being the date on which Shareholders' entitlements
to B Shares under that Return of Capital
will be calculated
"Redemption Date" in respect of any Return of Capital, the
date determined by the Board, at its absolute
discretion, on which the B Shares allotted
under that Return of Capital will be redeemed
"Register" the register of Shareholders
"Registrar" Link Group
"Regulatory Information a regulatory information service approved
Service" or "RIS" by the FCA and on the list of regulatory
information services maintained by the FCA
"Relationship Agreement" has the meaning given to it in paragraph
3 of this announcement
"Repurchase Agreement" the agreement dated 29 November 2021 between
the Company and finnCap relating to the repurchase
by the Company on AIM of all the Shares purchased
by finnCap pursuant to the Tender Offer as
described in paragraph 4 of Part 9 of the
Circular
"Requisitionist" Rock Nominees Limited (on behalf of GHE)
"Resolutions" the resolutions to be proposed at the General
Meeting as detailed in paragraph 9 of this
announcement and in the Notice of Requisitioned
General Meeting
"Restricted Jurisdictions" each of the United States, Canada, Australia,
New Zealand, Japan and South Africa and any
other jurisdiction where the mailing of the
Circular into or inside such jurisdiction
would constitute a violation of the laws
of such
"Restricted Shareholders" Shareholders who are resident in, or citizens
of, a Restricted Jurisdiction including for
the avoidance of doubt US persons as defined
in Regulation S under the US Securities Act
"Return of Capital" a return of capital to Shareholders to be
effected by the B Share Scheme and/or a tender
offer, in each case to be made at such time
as determined by the Board, at its absolute
discretion
"Shareholders" holders of Shares
"Shares" ordinary shares of 50 pence each in the capital
of the Company
"Side Letter" has the meaning given to it in paragraph
3 of this announcement
"Strategic Review" a strategic review of the strategy of the
Company against other strategic options available
to the Company to determine the best course
of action to provide growth in value for
all Shareholders, the completion of which
was announced on 11 October 2021
"Subscription Letter" has the meaning given to it in paragraph
3 of this announcement
"Takeover Code" the City Code on Takeovers and Mergers
"Tender Conditions" shall have the meaning given in paragraph
2.1 of Part 5 of the Circular
"Tender Form" the form enclosed with the Circular for use
by Shareholders who hold Shares in certificated
form in connection with the Tender Offer
"Tender Offer" the invitation by finnCap to each Shareholder
(other than Restricted Shareholders and certain
Overseas Shareholders) to tender up to their
Individual Basic Entitlement of Shares, and
the acceptance of such tenders by finnCap
on the terms and subject to the conditions
set out in the Circular and, in the case
of Shares held in certificated form, the
Tender Form, or any one or more of such invitation,
tender or acceptance as the context requires
"Tender Offer Record 6:00 p.m. on 17 December 2021
Date"
"Tender Offer Resolution" the special resolution numbered 7 to be proposed
at the General Meeting, as set out in the
Notice of Requisitioned General Meeting
"Tender Price" the price at which Shares will be purchased
pursuant to the Tender Offer as determined
in accordance with the terms and conditions
of the Tender Offer and as set out in paragraph
7 of Part 5 of the Circular
"uncertificated form" recorded on the register as being held in
uncertificated form in CREST and title to
which, by virtue of the CREST Regulations,
may be transferred by means of CREST
"United Kingdom" the United Kingdom of Great Britain and Northern
Ireland
"United States" or the United States of America, its territories
"U.S." and possessions, any State of the United
States and the District of Columbia
"US Securities Act" the United States Securities Act of 1933
(as amended)
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(END) Dow Jones Newswires
November 29, 2021 02:00 ET (07:00 GMT)
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