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RNS Number : 4746W
Baker Steel Resources Trust Ltd
10 November 2014
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR
INDIRECTLY, IN OR INTO, THE UNITED STATES, AUSTRALIA, CANADA, JAPAN
OR THE REPUBLIC OF SOUTH AFRICA.
This announcement is an advertisement and not a prospectus.
Investors should not purchase or subscribe for any transferable
securities referred to in this announcement except on the basis of
information in the prospectus (the "Prospectus") expected to be
published by Baker Steel Resources Trust Limited in due course in
connection with a placing and open offer of new ordinary shares and
the admission of such new ordinary shares (the "Ordinary Shares")
to the premium segment of the Official List of the Financial
Conduct Authority (the "Official List") and to trading on London
Stock Exchange plc's main market for listed securities (the "London
Stock Exchange"). A copy of the Prospectus will, following
publication, be available from the Company's website. This
announcement is not an offer to sell, or a solicitation of an offer
to acquire, securities in the United States or in any other
jurisdiction. Neither this announcement nor any part of it shall
form the basis of or be relied on in connection with or act as an
inducement to enter into any contract or commitment whatsoever.
Baker Steel Resources Trust Limited
10 November 2014
Potential acquisitions and issue of equity
Potential acquisitions
The Board of Baker Steel Resources Trust Limited (the "Company")
is pleased to announce that it is considering the potential
acquisition of certain assets (the "Assets") in exchange for equity
(the "Acquisition") which would significantly increase the net
assets and market capitalisation of the Company providing it with
greater critical mass whilst enhancing the investment proposition.
This is expected to widen the appeal of the Company's Ordinary
Shares to potential investors, improve their liquidity and reduce
the discount at which the Ordinary Shares may trade relative to
their Net Asset Value in the future.
The Assets would be acquired from a number of pooled investment
vehicles, including vehicles in which clients of Baker Steel
Capital Managers LLP and Salamanca Group Investors Limited have
invested. Following such acquisition agreements becoming
unconditional, Salamanca will become an additional Investment
Adviser to the Company's Investment Manager.
All of the Assets that may be acquired fall within the existing
investment policy of the Company and, based on current values, over
80 per cent. by value are investments that are already held within
the Company's portfolio. It is expected that the various
acquisitions will be completed over a short period of time with
approximately GBP25million of assets being acquired initially and
up to approximately GBP90million being acquired on completion of
the transaction.
It is proposed that the consideration for the acquisition of the
Assets will be satisfied by the issue of new equity in the Company,
such equity to be valued at the prevailing net asset value in
respect of unlisted assets being acquired and at a 15% discount to
the prevailing net asset value in respect of listed assets being
acquired. Of the total potential GBP90million of assets being
acquired, based on current values, approximately 40 per cent are
unlisted assets with the balance being listed assets.
Issue of equity
In conjunction with the Acquisition, the Board is also
considering an issue of up to GBP100million of equity for cash.
This equity would be issued at a 15% discount to the prevailing net
asset value and will be first offered to existing shareholders on a
pro rata basis via an open offer before being made available to
prospective new investors via a placing.
The Investment Manager believes that the commodities cycle is
close to its trough and that current market conditions therefore
represent an attractive time to be investing in mining and
resources assets many of which are priced well below their risk
adjusted fair values. Capital markets are currently unreceptive to
development companies' need for capital and such companies are
currently being particularly undervalued due to perceived financing
risk. The Investment Manager believes that it is therefore timely
to seek to exploit this opportunity through carefully selected
investment with a preference toward companies with late stage
development projects requiring the last tranche of capital to reach
positive cashflow from operations.
The increase in scale of the Company arising from the
Acquisition and issue of equity for cash should provide the
Investment Manager with an enhanced opportunity to achieve
favourable terms for investment by the Company given the stronger
negotiating position derived from its ability to invest larger
'ticket sizes' in investee companies.
Discount Management Mechanism and Distribution Policy
In the event that the Acquisition proceeds, the Company will
introduce a discount management mechanism with effect from July
2015 such that if the Company's Ordinary Shares are trading at a
discount in excess of 15% to their Net Asset Value, the Board
intends to allocate no less than 50% of net cash received from
realisations to buy back the Company's Ordinary Shares.
In addition, following the audit of the 2015 financial
statements, the Board intends to allocate annually no less than 15%
of the aggregate net realised cash gains for distribution to
Shareholders.
Expected timetable
The Board currently expects to publish further details and the
date of an Extraordinary General Meeting to approve the proposals,
during November 2014.
Enquiries:
Baker Steel Resources Trust Limited
+44 20 7389 8237
Francis Johnstone
Trevor Steel
Numis Securities Limited
+44 20 7260 1000
David Benda (corporate)
James Glass (sales)
Note to Editors:
Salamanca Group integrates traditional Merchant Banking
practices and values with sophisticated Operational Risk expertise,
providing a new approach to business. The Group's track record of
enabling business, protecting assets and growing capital has led to
it establishing enduring relationships with a broad client base
including private individuals, corporates, institutions and
governments. Recognising the risks inherent in today's world,
Salamanca Group develops services that help reveal opportunities
and manage risks proactively. It delivers these services through
the following divisions: Investment & Advisory, Corporate Risk
Services, Business Intelligence & Investigations and Private
Office. With offices established in Accra, Athens, Barcelona, Cape
Town, Copenhagen, Geneva, Houston, Limassol, London, Lubumbashi,
Madrid, Mauritius, Natal, Rio de Janeiro, St Helier, Tripoli and
Warsaw; as well as a network in Dubai, Karachi and Sana'a,
Salamanca Group has an established global network.
Salamanca Capital Partners LLP ("SCP") is the principal United
Kingdom ("UK") Financial Conduct Authority ("FCA") regulated entity
of Salamanca Group with FRN 522491. SCP and its Appointed
Representatives undertake Salamanca Group's regulated
activities.
Important Information
This document is not for release, publication or distribution
(directly or indirectly) in or into the United States, Canada,
Australia, Japan, the Republic of South Africa or to any "US
person" as defined in Regulation S under the United States
Securities Act of 1933, as amended (the "Securities Act") or into
any other jurisdiction where applicable laws prohibit its release,
distribution or publication. It does not constitute an offer of
securities for sale anywhere in the world, including in or into the
United States, Canada, Australia, Japan or the Republic of South
Africa. No recipient may distribute, or make available, this
document (directly or indirectly) to any other person. Recipients
of this document in jurisdictions outside the UK should inform
themselves about and observe any applicable legal requirements in
their jurisdictions. In particular, the distribution of this
document may in certain jurisdictions be restricted by law.
The Ordinary Shares have not been and will not be registered
under the Securities Act or with any securities regulatory
authority of any state or other jurisdiction of the United States
and, subject to certain exceptions, may not be offered or sold
within the United States or to, or for the account or benefit of,
US Persons. The Company will not be registered as an "investment
company" under the Investment Company Act of 1940, and investors
will not be entitled to the benefits of that Act. In addition,
relevant clearances have not been, and will not be, obtained from
the securities commission (or equivalent) of any province of
Australia, Canada, Japan or the Republic of South Africa and,
accordingly, unless an exemption under any relevant legislation or
regulations is applicable, none of the Ordinary Shares may be
offered, sold, renounced, transferred or delivered, directly or
indirectly, in Australia, Canada, Japan or the Republic of South
Africa.
The contents of this announcement, which has been prepared by
and is the sole responsibility of the Company, have been approved
by Baker Steel Capital Managers LLP ("Baker Steel") solely for the
purposes of section 21(2)(b) of the Financial Services and Markets
Act 2000.
Each of Baker Steel and Numis Securities Limited ("Numis") is
authorised and regulated by the UK Financial Conduct Authority.
Neither Baker Steel nor Numis is acting as adviser to any recipient
of this document or will be responsible to any recipient of the
document for providing the protections afforded to clients of
either of them or for providing advice in connection with this
document or any of the matters referred to herein. Numis has not
verified or authorised the contents of, or any part of, this
document.
This document is an advertisement and not a prospectus and
investors must only subscribe for or purchase the securities
referred to in this document on the basis of information contained
in the Prospectus and not in reliance on this document. This
document does not contain sufficient information to support an
investment decision and investors should ensure that they obtain
all available relevant information before making any investment.
This document does not constitute and may not be construed as an
offer to sell, or an invitation to purchase, investments of any
description, nor as a recommendation regarding the possible
offering or the provision of investment advice by any party. No
information in this document should be construed as providing
financial, investment or other professional advice and each
prospective investor should consult its own legal, business, tax
and other advisers in evaluating the investment opportunity. No
reliance may be placed for any purposes whatsoever on this document
(including, without limitation, any illustrative modelling
information contained herein), or its completeness.
None of the Company, Baker Steel or Numis nor any of their
respective officers, partners, employees, agents, advisers or
affiliates makes any express or implied representation, warranty or
undertaking with respect to the information or opinions contained
in this document and none of them accept any responsibility or
liability (for negligence or otherwise) as to this document's
accuracy or completeness or as to the suitability of any particular
investment for any particular investor or for any loss howsoever
arising, directly or indirectly, from any use of such information
or opinions or otherwise arising in connection therewith. In
addition, no duty of care or otherwise is owed for any loss, cost
or damage suffered or incurred as a result of the reliance on such
information or opinions or otherwise arising in connection with
this document. In all cases, each recipient should conduct its own
investigations and analysis of the Company and Baker Steel and such
recipient will be solely responsible for forming its own views as
to the potential future performance of the Company.
Certain information contained in this document constitutes
"forward-looking statements," which can be identified by the use of
terms such as "may", "will", "should", "expect", "anticipate",
"project", "estimate", "intend", "continue," "target" or "believe"
(or the negatives thereof) or other variations thereon or
comparable terminology. Due to various risks and uncertainties,
actual events or results or actual performance of the Company may
differ materially from those reflected or contemplated in such
forward-looking statements. As a result, investors should not rely
on such forward-looking statements in making their investment
decisions. No representation or warranty is made as to the
achievement or reasonableness of and no reliance should be placed
on such forward-looking statements.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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