TIDMHGT
RNS Number : 4293I
HG Capital Trust PLC
11 March 2010
THIS ANNOUNCEMENT IS NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE IN, OR INTO
THE UNITED STATES, CANADA, AUSTRALIA, JAPAN, NEW ZEALAND OR SOUTH AFRICA.
HgCapital Trust plc announces Firm Placing and Placing and Open Offer of New
Ordinary Shares (with Subscription Shares attached) at 845 pence per New
Ordinary Share to raise GBP50 million, and Bonus Issue of Subscription Shares.
London, 11 March 2010: Further to the announcement on 17 February 2010,
HgCapital Trust plc (the "Company") has today published a prospectus (the
"Prospectus") in relation to a Firm Placing and Placing and Open Offer of New
Ordinary Shares (with Subscription Shares attached) at 845 pence per New
Ordinary Share, to raise GBP50 million, and the issue of Subscription Shares to
existing Shareholders by way of a Bonus Issue.
The Company has received commitments to subscribe for GBP35.1 million comprising
the Firm Placing, from a range of new investors and existing Shareholders, and
commitments from Conditional Placees to subscribe for GBP14.9 million, subject
to clawback to satisfy valid applications by existing Shareholders under the
Open Offer.
RBS Hoare Govett Limited is acting as Sponsor, Bookrunner and Broker in
connection with the Offer.
Roger Mountford, Chairman of HgCapital Trust, said: "We are very pleased to be
announcing this fundraising which has attracted strong support from both
existing shareholders and new investors. These funds will enable the trust to
take full advantage of the investment opportunities the Board sees opening up at
this stage in the economic cycle."
The Company
The Company has been a listed investment trust since 1989 and has an investment
objective of providing shareholders with long-term capital appreciation in
excess of the FTSE All-Share Index by investing in unquoted companies. The
Company provides investors with exposure to a diversified portfolio of private
equity investments, primarily in the UK and Continental Europe.
The Company announced its 2009 annual results on 5 March 2010, the financial
highlights of which are as follows:
· Positive net asset growth (assuming historic dividends are reinvested) of
3.6 per cent.;
· Increase in share price of 30 per cent.;
· GBP30 million of funds deployed during 2009 including GBP17.2 million in
two new buyouts and GBP7.6 million invested in renewable energy projects through
Hg Renewable Power Partners LP;
· Average annual EBITDA profit growth of 18 per cent. for the Company's top
10 investments over 2009;
· Ten year total return per annum of 14.4 per cent. versus 1.6 per cent. per
annum from the FTSE All-Share Index; and
· >3.8x growth in value of the Company's shares over 10 years.
At the same time, the Company also announced an unaudited NAV per Share as at 28
February 2010 of 926.6p which reflected the realisation of the Company's
investment in Hoseasons and provision for an interim dividend of 25p per Share
announced by the Company on 17 February 2010 (payable to Shareholders on the
register on 26 February 2010). As at 28 February 2010, the Company held GBP91.8
million in liquid assets available for deployment in new investment
opportunities (representing 39 per cent. of net assets and adjusted to take into
account the dividend and proceeds received from the sale of Hoseasons).
As shown above, the Company has delivered attractive returns to Shareholders
over the medium to long term. Its total return (defined as share price growth
with dividends reinvested) has outperformed the FTSE All Share Index in the
periods of 5, 7 and 10 years to 31 December 2009 by approximately 9.3, 15.1 and
12.8 percentage points respectively (on an annual basis). The Board considers
that one reason for this outperformance is that the Manager has taken a patient
and long term approach to deploying capital and to creating and realising value
within the portfolio, and has prudently taken account of economic cycles in
planning both investments and realisations.
The Investment Opportunity
The Board believes that the Company is now in the early stages of the next
significant cycle for deployment of capital, with the opportunity to make
attractive new investments over the medium term. In 2009 the Company committed
to invest alongside the Manager's latest buyout fund HgCapital 6 which is in the
final stages of its fundraising programme with aggregate commitments (including
the Company's) exceeding GBP1.88 billion. The Company's commitment to HgCapital
6 is now approximately GBP280 million and in 2009 the Company deployed GBP17.2
million into its first two buyout investments under this commitment. The Board
believes that market conditions promise to provide the best conditions for new
investment for some time.
In addition, the Board is currently in discussions with the Manager with respect
to making a commitment to HgCapital's second renewable energy fund, Hg Renewable
Power Partners 2 LP, in addition to the Company's existing commitment of
approximately GBP18.7 million in Hg Renewable Power Partners LP, the Manager's
first dedicated renewable energy fund which is close to being fully invested.
The Company's investment strategy has consistently involved the retention of
sufficient liquidity on-balance sheet through each investment cycle for
deployment in new opportunities at attractive points in the cycle and to support
the continued growth of the existing portfolio. Similarly, it seeks to ensure
that investments offering potential for further growth in value do not need to
be realised prematurely in order to raise liquid assets.
Market opportunity
Experience of past business cycles demonstrates that the best returns are made
by private equity funds raised at the bottom of cycles and invested over the
following three to four years. The availability of opportunities is expected to
be driven by the continuing process of deleverage, especially from banks looking
to divest attractive but overleveraged companies that have fallen under their
control. A large volume of potential refinancings amongst private equity backed
companies, particularly those reaching the end of their bank facilities' term,
may also lead to opportunities for the Company. With some return in levels of
business confidence, the Board expects the rate of corporate divestment to pick
up, if the recovery follows the pattern of earlier cycles. An increase in
divestments of owner managed businesses can also be expected as they recover
from the downturn. In addition, possible changes to the fiscal regime may also
encourage the sale of owner managed businesses. Such market conditions highlight
the potential opportunities for further equity investment.
Reasons for the Offer and the Bonus Issue
The funds raised under the Offer and upon exercise of the Subscription Shares
are expected to provide the Company with flexibility to take full advantage of
such opportunities as they arise, following the same investment approach as it
has to date, with a view to continuing to deliver attractive returns to
Shareholders.
The Offer
Up to 5,917,160 New Ordinary Shares, ranking pari passu with the Existing
Ordinary Shares, will be issued under the Offer, at an Offer Price of 845 pence
per New Ordinary Share. Subscription Shares will be attached to the New Ordinary
Shares on a one for five basis. The Offer Price represents a 0.1 per cent.
premium to the closing mid-market share price of the Existing Ordinary Shares as
at 10 March 2010 and an 8.8 per cent. discount to the unaudited NAV as at 28
February 2010.
The Offer comprises a Firm Placing of 4,154,088 New Ordinary Shares (with
Subscription Shares attached) and a Placing and Open Offer of up to 1,763,072
New Ordinary Shares (with Subscription Shares attached), in each case at the
Offer Price of 845 pence per New Ordinary Share.
The Firm Placing provides the Company with flexibility to raise the target
amount of equity from certain new investors, alongside existing Shareholders,
which has the benefit of broadening the Company's investor base and facilitating
secondary market liquidity. The Company has received commitments to subscribe
for 4,154,088 New Ordinary Shares comprising the Firm Placing from a range of
new investors and existing Shareholders.
The Open Offer allows Qualifying Shareholders to participate in the Offer by
subscribing for their Open Offer Entitlements on a pre-emptive basis, alongside
an ability to subscribe for an amount in excess of their Open Offer Entitlement
under the Excess Application Facility where other Qualifying Shareholders do not
take up their Open Offer Entitlements in full. To the extent that Qualifying
Shareholders do not take up their Open Offer Entitlements and apply for further
Open Offer Shares under the Excess Application Facility, such New Ordinary
Shares will be available under the Placing.
The Company has received commitments from Conditional Placees to subscribe for
1,763,072 New Ordinary Shares under the Placing, subject to clawback to satisfy
valid applications by existing Shareholders under the Open Offer.
As evidence of their commitment to the Company's strategy, partners and
employees of HgCapital have committed to subscribe for 639,835 New Ordinary
Shares under the Placing, representing an aggregate commitment of GBP5.4 million
at the Offer Price, subject to clawback to satisfy valid applications by
existing Shareholders under the Open Offer.
The Directors have also confirmed their intention to subscribe for 3,275 New
Ordinary Shares at the Offer Price, representing their combined Open Offer
Entitlement.
The Bonus Issue
The Company is also proposing to issue to Qualifying Bonus Issue Shareholders,
by way of the Bonus Issue, one Subscription Share for every five Ordinary Shares
held. Qualifying Bonus Issue Shareholders are holders of Ordinary Shares whose
names are on the Register as at the close of business on the Bonus Issue Record
Date (with the exclusion of Excluded Shareholders).
Each Subscription Share will confer the right (but not the obligation) to
subscribe for one Ordinary Share upon exercise of the Subscription Right and
payment of the Subscription Price in cash. The first opportunity to exercise
such right will be on 31 May 2011. Thereafter, exercise dates will arise on 31
May and 31 October in each year, with the final exercise date being 31 May 2013.
The Subscription Prices will be as follows:
· if exercised in 2011 or 2012 - a Subscription Price of GBP9.50 per
Ordinary Share; and
· if exercised on 31 May 2013 - a Subscription Price of GBP10.25 per
Ordinary Share.
After 31 May 2013, the Subscription Rights will lapse.
General Meeting
The Board is seeking Shareholder approval of the Resolutions at the General
Meeting of the Company on 6 April 2010, in order to give effect to the Offer and
Bonus Issue and, among other things, to adopt the New Articles to facilitate the
issue of Subscription Shares and to make certain updates in respect of current
legislation.
Dealings
Application has been made to the UK Listing Authority for the New Ordinary
Shares and the Subscription Shares to be admitted to the Official List.
Application has also been made for such New Ordinary Shares and the Subscription
Shares to be admitted to trading on the main market of the London Stock
Exchange. It is expected that such admissions will become effective and dealings
in the New Ordinary Shares and the Subscription Shares on the London Stock
Exchange will commence on 7 April 2010.
The ISIN number and SEDOL code for the Ordinary Shares are GB0003921052 and
0392105 respectively.
The ISIN number and SEDOL code for the Subscription Shares are GB00B62CQW90 and
B62CQW9 respectively.
Expected timetable of key events
+----------------------------------------------+----------------------+
| Event | 2010 |
+----------------------------------------------+----------------------+
| Record Date for the Open Offer | close of business on |
| | 10 March |
+----------------------------------------------+----------------------+
| Publication of Prospectus and despatch of | 11 March |
| the Prospectus, Forms of Proxy and | |
| Application Forms to Qualifying Non-CREST | |
| Shareholders | |
+----------------------------------------------+----------------------+
| Ex-entitlement date for the Open Offer | 8.00 a.m. on 12 |
| | March |
+----------------------------------------------+----------------------+
| Open Offer Entitlements and Excess CREST | 8.00 a.m. on 12 |
| Open Offer Entitlements credited to stock | March |
| accounts of Qualifying CREST Shareholders | |
+----------------------------------------------+----------------------+
| Recommended latest time for requesting | 4.30 p.m. on 24 |
| withdrawal of Open Offer Entitlements and | March |
| Excess CREST Open Offer Entitlements from | |
| CREST | |
+----------------------------------------------+----------------------+
| Latest time and date for depositing Open | 3.00 p.m. on 25 |
| Offer Entitlements and Excess CREST Open | March |
| Offer Entitlements into CREST | |
+----------------------------------------------+----------------------+
| Latest time and date for splitting | 3.00 p.m. on 26 |
| Application Forms (to satisfy bona fide | March |
| market claims only) | |
+----------------------------------------------+----------------------+
| Latest time and date for receipt of | 11.00 a.m. on 30 |
| completed Application Forms and payment in | March |
| full under the Open Offer and settlement of | |
| the CREST instructions (as appropriate) | |
+----------------------------------------------+----------------------+
| Announcement of results of the Offer | 1 April |
+----------------------------------------------+----------------------+
| Latest time and date for receipt of Forms of | 3.00 p.m. on 4 April |
| Proxy and receipt of electronic proxy | |
| appointments by registered Shareholders for | |
| the General Meeting | |
+----------------------------------------------+----------------------+
| General Meeting | 3.00 p.m. on 6 April |
+----------------------------------------------+----------------------+
| Announcement of results of the General | 6 April |
| Meeting | |
+----------------------------------------------+----------------------+
| Bonus Issue Record Date | close of business on |
| | 6 April |
+----------------------------------------------+----------------------+
| Admission and commencement of dealings in | 8.00 a.m. on 7 April |
| New Ordinary Shares and Subscription Shares, | |
| fully paid, on the London Stock Exchange | |
+----------------------------------------------+----------------------+
| New Ordinary Shares and Subscription Shares | 8.00 a.m. on 7 April |
| credited to CREST stock accounts | |
| (uncertificated holders only) | |
+----------------------------------------------+----------------------+
| Despatch of definitive share certificates | By 14 April |
| for the New Ordinary Shares and Subscription | |
| Shares in certificated form (to Qualifying | |
| Non- CREST Shareholders only) | |
+----------------------------------------------+----------------------+
Terms used in this announcement shall, unless the context otherwise requires,
bear the meanings given to them in the Prospectus dated 11 March 2010.
RBS Hoare Govett Limited, which is authorised and regulated by the Financial
Services Authority, is acting exclusively for the Company and no one else in
connection with the Offer and is not advising any person or treating any person
as its customer in relation to the Offer and will not be responsible to anyone
other than the Company for providing the protections afforded to clients of RBS
Hoare Govett or for providing advice in relation to the Offer or any matter
referred to herein.
Copies of the Prospectus are available for inspection at the Document Viewing
Facility, the Financial Services Authority, 25 North Colonnade, Canary Wharf,
London E14 5HS.
For further details:
HgCapital Trust Roger Mountford +44 (0)
20 7089 7888
HgCapital Ian Armitage
+44 (0)20 7089 7888
RBS Hoare Govett Limited Gary Gould +44 (0) 20
7678 8000
Stuart Klein
Maitland Neil Bennett
+44 (0)20 7379 5151
Rowan Brown
About HgCapital Trust plc
HgCapital Trust plc is an investment trust whose shares are listed on the London
Stock Exchange. The trust gives investors exposure to a portfolio of high-growth
private companies, through a liquid vehicle. This portfolio is managed by
HgCapital, an experienced and well-resourced private equity firm with a
long-term track record of delivering superior risk-adjusted returns for its
investors.
The Trust has won the Investment Week Private Equity Investment Trust of the
Year every year since 2005.
IMPORTANT INFORMATION
This announcement is not a prospectus and it does not constitute an offer to
sell or a solicitation of an offer to buy any securities described herein in the
United States or in any other jurisdiction, nor shall it, by the fact of its
distribution, form the basis if, or be relied upon, in connection with any
contract therefor. No offer, invitation or inducement to acquire shares or
other securities in the Company ("Shares") is being made by or in connection
with this announcement. Any offer, invitation or inducement to acquire Shares in
the Company will be made solely by means of a prospectus published in connection
with any offering (the "Prospectus") and any decision to buy Shares in the
Company should be made solely on the basis of the information contained in the
Prospectus. The Prospectus will supersede all information provided before the
date of the Prospectus and any investment decision must be made only on the
basis of the information contained therein.
The information presented herein is not an offer for sale within the United
States of any equity shares or other securities of the Company. The Company has
not been and will not be registered under the US Investment Company Act of 1940,
as amended (the Investment Company Act"). In addition, the Shares have not been
and will not be registered under the US Securities Act of 1933, as amended (the
"Securities Act") or any other applicable law of the United States.
Consequently, the Shares may not be offered or sold or otherwise transferred
within the United States, or to, or for the account or benefit of, US Persons,
except pursuant to an exemption from the registration requirements of the
Securities Act and under circumstances which will not require the Company to
register under the Investment Company Act. No public offering of the Shares is
being made in the United States. The Shares may only be resold or transferred in
accordance with the restrictions set forth in the Prospectus to be published in
connection with any proposed offering and related subscription documents. This
communication should not be distributed, forwarded, transferred, reproduced, or
otherwise transmitted, directly or indirectly, to any persons within the United
States or to any US Persons unless it is lawful to do so.
The promotion of the Company and the distribution of this document in the United
Kingdom is restricted by law. Accordingly, this communication is directed only
at (i) persons outside the United Kingdom to whom it is lawful to communicate
it, or (ii) persons having professional experience in matters relating to
investments who fall within the definition of "investment professionals" in
Article 19(5) of the Financial Services and Markets Act 2000 (Financial
Promotion) Order 2005 (as amended), or (iii) high net worth companies,
unincorporated associations and partnerships and trustees of high value trusts
as described in Article 49(2) of the Financial Services and Markets Act 2000
(Financial Promotion) Order 2005 (as amended) and persons who receive this
communication who do not fall within (i), (ii) or (iii) above should not rely on
or act upon this communication.
Certain statements contained in this announcement may be forward-looking
statements. By their nature, forward-looking statements involve a number of
risks, uncertainties and assumptions that could cause actual results or events
to differ materially from those expressed or implied by the forward-looking
statements. These risks, uncertainties and assumptions could adversely affect
the outcome and financial effects of the plans and events described herein. The
Company undertakes no obligation to update its view of such risks and
uncertainties or to publicly announce the result of any revisions to the
forward-looking statements made herein, except where it would be required to do
so under applicable law. Such statements are based on current expectations and
are subject to a number of risks and uncertainties that could cause actual
results or events to differ materially from those expressed or implied by the
forward-looking statements.
No representation or warranty, express or implied, is made or given by or on
behalf of the Company or HgCapital or any of their respective affiliates or any
of such person's directors, officers or employees or any other person as to the
accuracy, completeness or fairness of the information or opinions contained in
this announcement and no responsibility or liability is accepted for any such
information or opinions.
This announcement does not constitute a recommendation concerning the Shares.
All investments risk the loss of capital and the value of shares may go down as
well as up. There is no guarantee or assurance that an investment in the Company
will achieve its investment objective. An investment in the Company is
speculative and should form only part of a complete investment program, and an
investor must be able to bear the loss of its entire investment. Shares may
involve a high degree of risk. Prospective investors are advised to seek expert
legal, financial, tax and other professional advice before making any investment
decision.
The release, publication or distribution of this announcement in certain
jurisdictions may be restricted by law and therefore persons in such
jurisdictions into which this announcement is released, published or distributed
should inform themselves about and observe such restrictions.
This announcement and the information contained herein is not for publication,
distribution or release in, or into, directly or indirectly, the United States,
Canada, Australia, Japan, New Zealand, South Africa or any other jurisdiction in
which such publication, distribution or release would be contrary to applicable
law or regulation, or to US persons. The information contained herein does not
constitute an offer of securities for sale including in the United States,
Australia, Canada, Japan, New Zealand, South Africa or any other jurisdiction in
which such offer would be contrary to applicable law or regulation, or to US
Persons.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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