Reconstruction and Winding Up

RNS Number:2536D
Allianz Dresdner Income Gwth IT PLC
19 May 2006

ALLIANZ DRESDNER INCOME GROWTH INVESTMENT TRUST PLC

19 May 2006

RECOMMENDED PROPOSALS FOR THE RECONSTRUCTION AND WINDING UP OF THE COMPANY

INTRODUCTION

The Board of Allianz Dresdner Income Growth Investment Trust plc announces
detailed proposals for the reconstruction of the Company, proposed to become
effective shortly before its planned winding up date. The Company's Articles
require the Directors to put a resolution to Shareholders by no later than 30
June 2006 to consider the winding up or reconstruction of the Company. The
Directors, with their advisors, have reviewed the courses of action available to
the Company, which included a straight liquidation. In reaching its decision,
the Board took account of the costs of a straight liquidation of the Company.
The difference between the cost of such a transaction and the costs of the
Proposals is marginal and, in the Board's opinion, is outweighed by the benefits
of providing roll-over options to Shareholders. The Directors have therefore
concluded that it is in the interests of Shareholders as a whole to propose a
scheme of reconstruction, comprising a members' voluntary liquidation of the
Company pursuant to Section 110 of the Insolvency Act 1986, together with
options for Shareholders to elect for:

(a) shares in an existing investment trust, The Merchants Trust PLC,
managed by RCM (UK); and/or

(b) realising all of their investment in the Company for cash,

as suits each Shareholder's personal investment requirements.

ZDP Shareholders will also have the option, in combination with either of
options (a) and (b) above, to elect for shares in a sub-fund of an existing open
ended investment company, The Allianz PIMCO Sterling Total Return Fund (managed
by PIMCO, a member of Allianz Global Investors).

Shareholders who make no valid election and all Overseas Shareholders will be
deemed to have elected for the Cash Option.

THE MERCHANTS OPTION

Shareholders who elect for the Merchants Option will receive new Merchants
Shares. As further described in the paragraph entitled "Calculation of Value for
the Purposes of the Proposals" below, new Merchants Shares will be issued at a
price equal to 100.6 per cent. of the net asset value per Merchants Share (with
debt valued at market value and including accrued but undeclared net income) as
at the Calculation Date or, if higher, 90 per cent. of the middle market price
per Merchants Share as at the Calculation Date.

There is a limit on the number of Merchants Shares which may be issued pursuant
to the Scheme of 10,200,183 shares. If this limit would otherwise be exceeded,
the excess will be deemed to be elections for the Cash Option and all elections
for the Merchants Option will be scaled down accordingly.

New Merchants Shares will be allotted, conditional on admission to listing on
the Official List and trading on the London Stock Exchange's market for listed
securities, prior to the opening of business on 30 June 2006. Dealings in the
new Merchants Shares are expected to commence at 8.00 a.m. on 30 June 2006.

The new Merchants Shares will rank pari passu in all respects with the existing
Merchants Shares. Merchants Shares qualify as an investment for ISAs and PEP
transfers.

THE STERLING TOTAL RETURN FUND OPTION

ZDP Shareholders who elect for the Sterling Total Return Fund Option will
receive shares (of no par value) in the Sterling Total Return Fund. The Sterling
Total Return Fund is a sub-fund of EIF, and aims to maximise total return,
consistent with preservation of capital and prudent investment management,
primarily through investment in fixed income securities issued by corporate,
government, supranational institutions and local regional agencies, as well as
any other security. The Sterling Total Return Fund may invest internationally
although investment will predominantly be in the United Kingdom and Europe.
Sterling Total Return Fund Shares qualify as an investment for ISAs and PEP
transfers. As at noon on 16 May 2006 (the latest practicable date prior to the
publication of the Circular), the unaudited net assets of the Sterling Total
Return Fund were #201.1 million and the portfolio comprised 235 holdings.
(Source: RCM (UK)).

Sterling Total Return Fund Shares will be issued at a price equal to the net
asset value per Sterling Total Return Fund Share as at noon on 29 June 2006,
calculated in accordance with the FSA Regulations, as further described in the
paragraph headed 'Calculation of Value for the Purposes of the Proposals'. No
initial charge will be levied in relation to the Sterling Total Return Fund
Shares issued under the Scheme nor do the Directors believe that any dilution
levy will be applied.

THE CASH OPTION

Those Shareholders who have elected (or who are deemed to have elected) for the
Cash Option will receive cash in respect of their Shares for which an election
for the Cash Option has been or is deemed to have been made, equal to the
Terminal Asset Value per Share.

DETAILS OF THE SCHEME

Calculation of Value for the Purposes of the Proposals

Upon the winding up of the Company, but before any assets are transferred to
Merchants or the Sterling Total Return Fund under the Scheme or are realised and
distributed pursuant to the Cash Option, the Liquidators will retain from the
assets attributable to the Ordinary Shares (assuming the ZDP Shares are paid in
full) a fund of an amount which they consider sufficient to provide for all
outstanding liabilities of the Company, including contingent liabilities and the
costs incurred by, or in respect of, the Company and the Liquidators in relation
to the Proposals. To the extent that this contingency sum is not required, any
cash balance remaining in the Liquidation Fund will be paid, in due course, to
Ordinary Shareholders on the register of members immediately prior to the
Effective Date as one or more distributions on a pro rata basis according to
their respective holdings of Ordinary Shares (or to ZDP Shareholders to the
extent that their entitlements under the Scheme do not amount to the maximum
provided under the Articles).

Shareholders' entitlements will be calculated as at the Calculation Date and
will reflect their entitlements on a winding up of the Company under the
Articles of Association.

New Merchants Shares will be issued at a price equal to 100.6 per cent. of their
net asset value as at the Calculation Date (with debt valued at market value and
including accrued but undeclared net income) or, if higher, 90 per cent. of the
middle market price per Merchants Share as at the Calculation Date. Sterling
Total Return Fund Shares will be issued at a price equal to the net asset value
per Sterling Total Return Fund Share, as at noon on 29 June 2006, calculated in
accordance with the FSA Regulations. The number of Merchants Shares or Sterling
Total Return Fund Shares (as the case may be) to be issued to each relevant
Ordinary Shareholder and/or ZDP Shareholder (as the case may be) will be such
number as has a value, at the Merchants Issue Price or the Sterling Total Return
Fund Issue Price (as the case may be), equal to the Terminal Asset Value,
calculated in accordance with the Scheme, of the Shares in respect of which such
Shareholder elected to receive Merchants Shares or Sterling Total Return Fund
Shares (as the case may be).

Final Interim Dividend

Under the Articles, Ordinary Shareholders are entitled to a final interim
dividend equal, as nearly as practicable, to the revenue reserves (including
accumulated revenue reserves) of the Company up to the date of the general
meeting to approve the Scheme or a liquidation of the Company. To avoid the
administrative expense of this dividend, it is proposed that this Article be
amended so that if the Scheme is implemented the final interim dividend will not
be paid; instead Ordinary Shareholders will have a preferential entitlement by
virtue of the amended Articles to an amount equal to the dividend which would
have been paid. The relevant change to the Articles are included in the
resolution to be proposed at the First EGM.

Conditions

The Scheme is conditional upon, inter alia, the passing of the requisite
resolutions at the Meetings and the receipt by the Company of such clearances
from HM Revenue & Customs as the Directors, in their absolute discretion, shall
consider appropriate. If the new Merchants Shares or the Sterling Total Return
Fund Shares are, for any reason, not issued, elections for the Merchants Option
or (as the case may be) the Sterling Total Return Fund Option will be deemed to
be for the Cash Option.

Costs and Commissions

The total costs of the Proposals (excluding the Liquidators' retention) are not
expected to exceed #240,000 (including VAT), equivalent to approximately 0.4 per
cent. of the Company's net asset value and 0.9 per cent. of the Company's net
assets attributable to the Ordinary Shares as at the close of business on 12 May
2006 (being the latest practicable date prior to publication of the Circular).
These costs will be charged against the current year's revenue. To the extent
that ZDP Shareholders' entitlements are met in full (being 179.68p per ZDP
Share), then costs will be borne by Ordinary Shareholders, net of the Costs
Contribution referred to below. RCM (UK) has agreed to make a Costs
Contribution equal to 0.25 per cent. of the value of the assets transferred to
Merchants. The total costs of the Proposals will be reduced accordingly.

No initial charges will be payable by Shareholders in connection with the issue
of Merchants Shares or Sterling Total Return Fund Shares under the Scheme. In
addition, the Directors believe that no dilution levy will be applied in respect
of the Sterling Total Return Fund Shares issued pursuant to the Scheme.

If the Scheme becomes effective (or the resolutions at the Third EGM are
passed), RCM (UK) will not be entitled to any termination fee under the
Investment Management Agreement which would normally arise as a result of the
termination thereof.

DEEMED ELECTIONS

Shareholders who do not return a Form of Election or (as appropriate) send a TTE
instruction to CRESTCo in accordance with the above instructions will be deemed
to have elected for the Cash Option in respect of their entire holdings of
Shares. Overseas Shareholders will not receive a Form of Election and will be
deemed to have elected for the Cash Option in respect of their entire holdings
of Shares.

Shareholders who elect for the Merchants Option and/or (as the case may be) the
Sterling Total Return Fund Option will be deemed to have elected for the Cash
Option if the value of assets attributable to each such election is less than
#250,000 or if the value of assets attributable to the Merchants Option and the
Sterling Total Return Fund Option in aggregate is less than #2 million.

In the event that elections for the Merchants Option exceed the maximum number
of Merchants Shares available for issue (as described in the section headed
'Options available to Shareholders' above), shareholders will be scaled down pro
rata to their elections made and will receive cash to the extent of any excess.

Copies of the Circular have been submitted to the UK Listing Authority and will
shortly be available for inspection at the UK Listing Authority's Document
Viewing Facility which is situated at:

Financial Services Authority

25 The North Colonnade

Canary Wharf

London

E14 5HS

Tel. no. 020 7066 1000

EXPECTED TIMETABLE

Date from which it is advised that dealings in Shares should only 2006
be for cash settlement and immediate delivery of documents of title
9 June

Latest time for receipt of Allianz Global Investors Investment 5.00 p.m. on 12 June

Trust Share Plan/PEP/ISA Form(s) of Election

Record date for the purposes of Elections 5.00 p.m. on 14 June

Company's register of members closes 5.00 p.m. on 14 June

Latest time for receipt of Forms of Election 5.00 p.m. on 14 June

Latest time for receipt of TTE instructions from Shareholders 5.00 p.m. on 14 June
holding Shares in uncertificated form

Latest time for receipt of forms of proxy for the Separate General 9.30 a.m. on 17 June

Meeting of the Zero Dividend Preference Shareholders

Latest time for receipt of forms of proxy for the Separate General 9.35 a.m. on 17 June

Meeting of the Ordinary Shareholders

Latest time for receipt of forms of proxy for the First 9.40 a.m. on 17 June
Extraordinary General Meeting

Separate General Meeting of the ZDP Shareholders 9.30 a.m. on 19 June

Separate General Meeting of the Ordinary Shareholders 9.35 a.m. on 19 June

First Extraordinary General Meeting 9.40 a.m. on 19 June

Latest time for receipt of forms of proxy for the Second 9.30 a.m. on 27 June

Extraordinary General Meeting

Latest time for receipt of forms of proxy for the Third 9.30 a.m. on 27 June

Extraordinary General Meeting

Calculation Date Close of business on 27 June

Listing of Shares suspended 7.30 a.m. on 28 June

Shares reclassified into Reclassified Shares 8.00 a.m. on 28 June

Company's register of members re-opens 8.00 a.m. on 28 June

Second Extraordinary General Meeting 9.30 a.m. on 29 June

Third Extraordinary General Meeting 9.35 a.m. on 29 June

Effective date for implementation of Proposals 29 June

Date on which the Company's assets are transferred to Merchants and 29 June
the Sterling Total Return Fund

Cancellation of listing and trading of Shares 8.00 a.m. on 30 June

Dealings commence in new Merchants Shares 8.00 a.m. on 30 June

Shareholders holding Shares in uncertificated form credited with 8.00 a.m. on 30 June
new Merchants Shares

Certificates for new Merchants Shares and contract notes for On or as soon as practicable after 30
Sterling Total Return Fund Shares despatched June

Cheques despatched or CHAPS payments made to Shareholders who have On or as soon as practicable after 30
elected for cash and CREST payments made June

Terms used in this announcement shall, unless the context otherwise requires,
bear the meaning given to them in the Circular issued by Allianz Dresdner Income
Growth Investment Trust plc dated 18 May 2006.

Enquiries

Simon White 020 7065 1539

RCM (UK) Ltd

David Benda/Kathryn Standley 020 7621 5557

Winterflood Investment Trusts

This information is provided by RNS
The company news service from the London Stock Exchange
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