TIDMGRIT
RNS Number : 5421S
Global Resources Investment Tst PLC
21 December 2016
For immediate release 21 December 2016
GLOBAL RESOURCES INVESTMENT TRUST PLC
Approval of the new Manager Agreements as a related party
transaction under the Listing Rules
Adoption of New Investment Policy
and
Notice of General Meeting
The Company announces that it is posting a circular to
Shareholders convening a general meeting at 12.00 noon on 16
January 2017 at the offices of DMH Stallard LLP at 6 New Street
Square, New Fetter Lane, London EC4A 3BF to consider the related
party transaction and the adoption of the new investment policy as
described further below. The circular will also be available on the
Company's website www.grit.london and will shortly be available
from the National Storage Mechanism.
1. INTRODUCTION
On 21 December 2016, the Company announced that it was proposing
to change the arrangements with RDP (the Investment Manager as at
the date of this announcement) for managing the Company, which is a
related party transaction under the Listing Rules.
The Board considers that it is more practical for the Company
and its Portfolio to become self- managed and have reached
agreement with RDP in respect of an early termination of the
Investment Management Agreement, as set out in the Termination
Agreement, together with the continuing provision of certain back
office functions to GRIT as set out in the Transitional Services
Agreement.
Under the terms of the Termination Agreement, the Company will
pay the Investment Manager an early termination fee comprising the
issue of new Ordinary Shares on the basis set out below.
In addition, the Company is proposing to appoint David Hutchins,
a partner of RDP, as an Executive Director of GRIT under the
Service Agreement entered into by GRIT and Mr Hutchins.
The arrangements under the Termination Agreement, the
Transitional Services Agreement and the Service Agreement, together
the 'new Manager Agreements', are classified as a 'related party
transaction' under the Listing Rules as together they are a
transaction with the Investment Manager and are therefore subject
to, and conditional upon the approval of the Independent
Shareholders at the General Meeting.
The Company is also proposing that, subject to Shareholder
approval, the New Investment Policy is adopted from Completion
Further details of the Termination Agreement, the Transitional
Services Agreement, and New Investment Policy and the
recommendation of the Directors are set out in paragraphs 3 and 9
respectively below.
The purpose of the Document is to explain the background to, and
reasons for, the Proposals and why the Directors believe that the
Proposals are in the best interests of the Company and Shareholders
as a whole and to recommend that Shareholders vote in favour of the
Resolutions at the General Meeting to be held on 16 January
2017.
2. BACKGROUND TO AND REASONS FOR THE PROPOSALS
Shareholders will recall that due to the perilous market
conditions in the minerals sector the Company fell in breach of the
cover ratio resulting in it being in default with regard to the
GBP5,000,000 of Loan Notes. Following several financing proposals
announced during the course of this year, we announced on 19 August
that the latest proposal would not proceed due to the lack of
Shareholder support and that we would repay GBP1,000,000 of Loan
Notes due to LIM (now done) to be followed by a balance of
GBP2,500,000 in full and final settlement. As announced on 2
November 2016, the Company has nevertheless been able to repay
GBP1,000,000 of the outstanding amount from other portfolio
realisations, leaving a balance of GBP1,500,000 due to LIM. Further
to the announcement of 6 December 2016 which notified the market
that the proposed sale of 26,100,000 shares in Merrex Gold was no
longer proceeding, the Company reported that it remains confident
of realizing further funds which can be used to discharge the
remaining liability to LIM. In addition, there remain GBP1,200,000
nominal of Loan Notes due to other parties. The Board is therefore
pleased that the pressing need to repay LIM is now being dealt with
without what would have been a very dilutive issue to Shareholders.
However, given the reduced size of the portfolio and the need to
run an efficient and cost effective operation, the Board has
resolved that it should press ahead with the cancellation of the
Investment Management Contract so that in the future the Company
will be self-managed.
The current management arrangements under the Investment
Management Agreement provide for an annual fee of 1.5 per cent. to
the manager based upon net asset value. For the years ended 31
December 2014 and 2015, the amounts of such fee were GBP316,696 and
GBP255,434 respectively, and in the current year the fee has been
GBP145,057. If the net asset base of the Company were to grow, then
the fee could rise without limit and this would represent a large
cash cost to the Company. The Proposals eliminate this cash cost in
return for the issue of Ordinary Shares under the termination
arrangements set out in paragraph 3 below. In addition, it is
considered more practical for the Company to take direct charge of
the investment strategy and thus eliminate a layer of costly
bureaucracy inherent in a formal investment management agreement.
As discussed in paragraph 3 below, the impetus for the Proposals
came from certain major Shareholders, who had expressed a concern
about the cash cost of running what had become a relatively small
investment trust.
The Board therefore consider that it is in Shareholders'
interests to eliminate the cash management fee and replace this
with an arrangement that more closely aligns the reward of the key
executives with the interests of Shareholders, being share price
performance.
The Board have also been giving consideration to the Company's
investment policy given the commodity markets have started to
recover this year: after a prolonged and severe downturn, investor
interest has been focused only towards the large capitalisation
stocks or those with operational assets and positive cash flows.
Exploration and early stage development companies, which were the
original focus of the portfolio have remained largely ignored by
investors and have continued to underperform. Consequently, we have
been reducing our portfolio exposure to those grass root, early
exploration companies and focusing more heavily on those companies
with potentially large scale assets that also have the ability to
bring them into production over the coming years. Consequently we
would like to increase our focus on those types of companies, as we
believe that they offer the best value within the junior resources
market. However, such a change in focus will require a change to
the investment policy.
We will continue to maintain a diversified portfolio, both
geographically and by commodity, and we will also continue to
maintain a spread of investments. However, it will become a more
focused portfolio, on those companies that we have identified with
a significant asset base and who also have the ability to make the
transition from development company to producer.
3. DETAILS OF THE RELATED PARTY TRANSACTION
RDP has been the Company's Investment Manager since IPO
Admission and remains as such as at the date of this Document.
David Hutchins, the Proposed Director, is one of two partners of
RDP. As at the LPD, RDP held the 50,000 Existing Ordinary Shares
and 50,000 Deferred Shares.
RDPL is wholly owned by David Hutchins. RDPL is a management
services company which provides office space and support services
to RDP. David Hutchins, the Proposed Director, is on the board of
RDPL. As at the LPD, RDPL held 400,000 Existing Ordinary Shares and
GBP50,000 nominal of Loan Notes.
It is proposed that the Investment Management Agreement is
terminated under the terms of which the consideration in full
settlement of the Company's obligations under the agreement is as
follows:
3.1. The payment by the Company to RDP of:
(i) GBP100,000 ("First Payment") on Admission ("First Trigger")
(ii) GBP100,000 ("Second Payment") when the Closing Price
remains for a period of at least one month at or above each of 14p
("Second Trigger");
(iii) GBP100,000 ("Third Payment") when the Closing Price
remains for a period of at least one month at or above each of 16p
("Third Trigger"); and
(iv) GBP100,000 ("Fourth Payment") when the Closing Price
remains for a period of at least one month at or above each of 18p
("Fourth Trigger").
3.2. Subject to:
(i) the occurrence of the First Trigger, RDP shall subscribe at
GBP0.05 per Ordinary Share for 2,000,000 Ordinary Shares ("First
Subscription");
(ii) the occurrence of the Second Trigger, RDP shall subscribe
at GBP0.05 per Ordinary Share for 2,000,000 Ordinary Shares
("Second Subscription");
(iii) the occurrence of the Third Trigger, RDP shall subscribe
at GBP0.05 per Ordinary Share for 2,000,000 Ordinary Shares ("Third
Subscription"); and
(iv) the occurrence of the Fourth Trigger, RDP shall subscribe
at GBP0.05 per Ordinary Share for 2,000,000 Ordinary Shares
("Fourth Subscription").
3.3. The Company and RDP have the right to set off the First
Payment against the First Subscription, the Second Payment against
the Second Subscription, the Third Payment against the Third
Subscription, and the Fourth Payment against the Fourth
Subscription.
3.4. In the case of each issuance of Ordinary Shares in 3.2
above, RDP has agreed to a lock-in period of six months from the
date of each respective issue.
3.5. The Company shall not be required to issue any Ordinary
Shares to RDP to the extent that doing so will require it to issue
a prospectus. Any Ordinary Shares not issued by the Company
pursuant to the Termination Agreement will be issued as soon as the
Company is able to issue such Ordinary Shares.
3.6. The Company shall not be required to issue any Ordinary
Shares to RDP, or make the corresponding payment to RDP, to the
extent that the Company does not have authority to issue shares.
Any Ordinary Shares not issued, or payment not made, by the Company
pursuant to this deed will be issued and/or paid as soon as the
Company is able to issue such Ordinary Shares.
The terms of the Proposals set out above have been determined
following consultation with certain major Shareholders who had
expressed concern about the cash cost of the ongoing management
arrangements under the Investment Management Agreement, and of whom
three are providing irrevocable undertakings as referred to in
paragraph 9 below. The value of the subscriptions set out above
reflect the share price at the time of these discussions and when
the "in principle" support of these Shareholders was obtained.
The New Ordinary Shares will rank pari passu in all respects
with the Existing Ordinary Shares, including the right to receive
all dividends and other declarations, made or paid on the Existing
Ordinary Shares after Admission.
Applications are being made for the 2,000,000 New Ordinary
Shares now being issued pursuant to the Proposals to be admitted to
listing on the premium listing segment of the Official List and to
trading on the Main Market. It is expected that such admission will
become effective and such dealings will commence on or around 17
January 2017 and the Termination Agreement is conditional on this
taking place.
The Board considers that it is attractive to terminate the
Investment Management Agreement on a basis that aligns the
Investment Manager's interests with those of the Shareholders,
considering the termination fee to be paid in accordance with the
termination provisions of the Investment Management Agreement which
would have been GBP309,891 in cash. The Board has taken into
account that whilst the value of the New Ordinary Shares is in
excess of this amount, only 2,000,000 New Ordinary Shares to an
agreed value of GBP100,000 are being issued at this stage, and the
remainder will depend on the significant increases in the prices of
the Ordinary Shares as set out above, which will be in the
interests of Shareholders as a whole.
In accordance with the Termination Agreement, and in order to
provide ongoing office support services, GRIT and RDP have also
entered into the Transitional Services Agreement, under which RDP
will provide certain back office functions to GRIT. This agreement
is for a period of 12 months and RDP shall be entitled to recover
the costs and expenses of providing these services to GRIT, such
amount not to exceed GBP40,000.
In addition, the Company is proposing to enter into the Service
Agreement with the Proposed Director for an annual salary of
GBP20,000, further details of which are set out in paragraph
2.8(iv) of Part II of the Document.
Following the Proposals, RDP will continue to hold GBP50,000
nominal of Loan Notes and initially 2,400,000 Ordinary Shares
rising to a maximum of 8,400,000 Ordinary Shares under the
arrangements set out above.
The new Manager Agreements (comprising the Termination
Agreement, the Transitional Services Agreement and the Service
Agreement) are classified as a 'related party transaction' under
the Listing Rules as they are a transaction with the Investment
Manager. Consequently, these agreements are subject to, and
conditional upon, inter alia, the approval of Shareholders at the
General Meeting.
4. PROPOSED BOARD CHANGE
On approval of the Proposals, it is intended that David
Hutchins, the Proposed Director, will be appointed as an Executive
Director of GRIT. Further details, including details of current and
past directorships and/or partnerships of the Proposed Director are
as follows:
The business address of the Proposed Director is 4(th) Floor,
Vintners Place, 68 Upper Thames Street, London EC4V 3BJ(Tel: +44
(0) 20 7290 8540) on appointment.
David (Sam) James Hutchins (aged 56) (Executive Director)
David has 30 years' experience as a resources analyst and fund
manager. His career began with the Melbourne Stock Exchange in 1979
and he subsequently became an executive director of M&G
Investment Management in London. He headed the International Desk
at M&G Investment Management from 1995, where he was
concurrently responsible for M&G's investments in the precious
metals and commodities sector globally. He later became involved in
Fund Management with Yorkton and AWI Administration Services. He
was a founding director of Resources Investment Trust plc at its
launch in January 2002, and Chief Executive of Ocean Resource
Capital Holdings plc which was admitted to the AIM Market of the
London Stock Exchange from 2003 to 2007.
In 2008, he became a director and fund manager of Grafton
Resource Investments Limited, a Cayman Island exempt company
investing in the resource sector. David was also a founding partner
of www.minesite.com, a resource industry specific news related
website and conference business, and is a member of the FTSE gold
mines index committee. David is also one of two partners of RDP,
the Company's Investment Manager as at the date of this Document,
and has been a designated member of the team managing GRIT's
Portfolio since IPO Admission. David is also a member of the
Chartered Institute for Securities and Investment.
Director / Current Past
Proposed Director Directorships/Partnerships Directorships/Partnerships
------------------- -------------------------------- ----------------------------
David Hutchins Endstone Capital Limited Napolean Energy
(Proposed RDP Fund Management Limited
Director) LLP U30 Limited
Grafton Resource Investments Global Resources
Limited Investment Trust
Resources Development PLC
Partners Limited Coinworks Limited
Global Resources International Toxic Friction
Limited Limited
Robdale Investments GRIT ZDP Limited
Limited
Aresa Investments
Limited
------------------- -------------------------------- ----------------------------
5. ADOPTION OF THE NEW INVESTMENT POLICY
Current Investment Policy
As at the date of this Document, the Company's investment
policy, as it has been since IPO Admission, is as follows:
"GRIT will seek to achieve its investment objective through
investment in companies globally which have a significant focus on
natural resources and mining. GRIT will invest in companies that
are in the field of the exploration and production of oil, gas,
precious and industrial metals, and industrial and commercial
minerals which, in the opinion of GRIT's investment manager, have
the potential to increase their value considerably. These companies
may be producing companies with a historical track record of
production or they may be development companies or companies with
exploration potential. GRIT will seek to ensure, through active
shareholder involvement, that investee companies act to maximise
long-term shareholder value. GRIT will invest primarily in
companies with shares and securities which are listed, quoted or
are admitted to dealing, on a relevant exchange (including debt
securities which are convertible into quoted equity securities).
For the purpose of this investment policy, a "relevant exchange" is
(i) a regulated market, recognised investment exchange, recognised
stock exchange, recognised overseas investment exchange or
designated investment exchange, or (ii) a junior market operated by
the operator of an exchange referred to in (i).
However GRIT may hold some investments in non-quoted, seed
capital or pre-IPO companies.
Any material changes to GRIT's investment policy will only be
made with the approval of Shareholders by ordinary resolution.
Risk diversification, asset allocation and maximum exposures
GRIT will seek to diversify its investments across a number of
companies, with a range of natural resource assets, in
jurisdictions globally. There are no restrictions as to the
commodity classes and geographical regions into which GRIT may
invest, however, GRIT will invest and manage its assets in a way
which is consistent with its object of spreading risk. GRIT will
adhere to the following investment restrictions:
Ø GRIT may only invest up to 10 per cent. of its Gross Asset
Value (at the time of investment) in non-quoted, seed capital or
pre-IPO;
Ø GRIT will not invest more than 15 per cent. of its Gross Asset
Value in any one company (measured at the time of investment);
Ø GRIT will not take legal or management control over
investments in its Portfolio;
Ø GRIT will not invest more than 10 per cent., in aggregate, of
its Gross Asset Value in other listed closed-ended investment
funds;
Ø distributable income (if any) will be principally derived from
investments. GRIT will not conduct a trading activity which is
significant in the context of the activities of GRIT as a
whole;
Ø GRIT will not enter into derivative transactions for
speculative purposes. GRIT does not expect to enter into any
hedging transactions, although it may do so for the purposes of
efficient portfolio management and to hedge against exposure to
changes in currency rates to the full extent of any such
exposure.
GRIT will hold any uninvested funds in cash, cash equivalents or
other liquid instruments with a view to maximising the returns on
any such funds.
For the purpose of this investment policy, "Gross Asset Value"
shall mean the aggregate value of the gross assets of GRIT,
calculated in accordance with the accounting policies adopted by
GRIT from time to time."
Background to Proposed New Investment Policy
As the commodity markets have started to recover this year:
after a prolonged and severe downturn, investor interest has been
focused only towards the large capitalisation stocks or those with
operational assets and positive cash flows. Exploration and early
stage development companies, which were the original focus of the
portfolio have remained largely ignored by investors and have
continued to underperform. Consequently, we have been reducing our
portfolio exposure to those grass root, early exploration companies
and focusing more heavily on those companies with potentially large
scale assets that also have the ability to bring them into
production over the coming years. Consequently, we would like to
increase our focus on those types of companies, as we believe that
they offer the best value within the junior resources market.
However, such a change in focus will require a change to the
investment policy.
We will continue to maintain a diversified portfolio, both
geographically and by commodity, and we will also continue to
maintain a spread of investments. However, it will become a more
focused portfolio, on those companies that we have identified with
a significant asset base and who also have the ability to make the
transition from development company to producer.
It is proposed that as part of the New Investment Policy, the
investment limit for any single investment is increased to above 15
per cent. but limited to not more than 40 per cent of Gross Asset
Value. There are currently no specific agreements or proposals to
either make new investments or to increase existing holdings above
15 per cent, but the Board would like to have the ability to
increase any investment beyond 15 per cent. if the opportunity
presented itself. An investment beyond 15 per cent will not be the
norm. It is anticipated that the Board will maintain a diverse
portfolio with only 1 or 2 investments going beyond 15 per cent at
any point in time. With the remainder of the portfolio being spread
amongst a number of diverse investments in line with the New
Investment Policy, the Board is of the view that the Company will
be able to invest and manage its assets in a way which is
consistent with its objective of spreading investment risk.
It should be noted that due to the reduction in net asset value
since IPO Admission, and share performance of the investments, a
number of holdings which are in compliance with the Current
Investment Policy now represent over 20 per cent. of Gross Asset
Value (being: Siberian Goldfields - 30.7 per cent.; and Merrex Gold
- 20.0 per cent.) will also be in line with the New Investment
Policy if agreed.
New Investment Policy
It is proposed that from Completion, the Company will adopt the
New Investment Policy which will enable the Company to focus on
specific opportunities that may arise, which the Directors and the
Proposed Director believe demonstrate the potential to become major
mining projects.
The New Investment Policy is set out below and the bold
underlined text indicates the changes proposed:
"GRIT will seek to achieve its investment objective through
investment in companies globally which have a significant focus on
natural resources and mining. GRIT will invest in companies that
are in the field of the exploration and production of oil, gas,
precious and industrial metals, and industrial and commercial
minerals which, in the opinion of GRIT's investment manager, have
the potential to increase their value considerably. These companies
may be producing companies with a historical track record of
production or they may be development companies or companies with
exploration potential. GRIT will seek to ensure, through active
shareholder involvement, that investee companies act to maximise
long-term shareholder value. GRIT will invest primarily in
companies with shares and securities which are listed, quoted or
are admitted to dealing, on a relevant exchange (including debt
securities which are convertible into quoted equity securities).
For the purpose of this investment policy, a "relevant exchange" is
(i) a regulated market, recognised investment exchange, recognised
stock exchange, recognised overseas investment exchange or
designated investment exchange, or (ii) a junior market operated by
the operator of an exchange referred to in (i).
However GRIT may hold some investments in non-quoted, seed
capital or pre-IPO companies.
Any material changes to GRIT's investment policy will only be
made with the approval of Shareholders by ordinary resolution.
Risk diversification, asset allocation and maximum exposures
GRIT will seek to diversify its investments across a number of
companies, with a range of natural resource assets, in
jurisdictions globally. There are no restrictions as to the
commodity classes and geographical regions into which GRIT may
invest, however, GRIT will invest and manage its assets in a way
which is consistent with its object of spreading risk. GRIT will
adhere to the following investment restrictions:
Ø GRIT may only invest up to 10 60 per cent. of its Gross Asset
Value (at the time of investment) in non-quoted, seed capital or
pre-IPO companies provided that at any one time such new
investments above a 15 per cent. limit will not be in more than two
companies, with an emphasis in such instances on potentially large
scale assets that also have the ability to bring them to production
in the coming years ;
Ø GRIT will not invest more than 15 40 per cent. of its Gross
Asset Value in any one company (measured at the time of investment)
provided that at any one time such new investments above a 15 per
cent. limit will not be in more than two companies, with an
emphasis in such instances on potentially large scale assets that
also have the ability to bring them to production in the coming
years;
Ø GRIT will not take legal or management control over
investments in its Portfolio;
Ø GRIT will not invest more than 10 per cent., in aggregate, of
its Gross Asset Value in other listed closed-ended investment
funds;
Ø distributable income (if any) will be principally derived from
investments. GRIT will not conduct a trading activity which is
significant in the context of the activities of GRIT as a
whole;
Ø GRIT will not enter into derivative transactions for
speculative purposes. GRIT does not expect to enter into any
hedging transactions, although it may do so for the purposes of
efficient portfolio management and to hedge against exposure to
changes in currency rates to the full extent of any such
exposure;
Ø GRIT will not incur any debt beyond such amount that is
covered four times by the gross value of its investments at the
time of incurring such debt (ie a "4 to 1 cover ratio);
Ø GRIT will manage the overall portfolio to ensure that there is
a spread of investments to provide diversification, with a target
of having between 10 and 20 different investments at any one
time.
GRIT will hold any uninvested funds in cash, cash equivalents or
other liquid instruments with a view to maximising the returns on
any such funds.
For the purpose of this investment policy, "Gross Asset Value"
shall mean the aggregate value of the gross assets of GRIT,
calculated in accordance with the accounting policies adopted by
GRIT from time to time."
Investment Objective
At Completion, GRIT's investment objective will be as it has
been since IPO Admission which is to generate medium and long-term
capital growth through investing in a diverse portfolio of
primarily small and mid-capitalisation natural resources and mining
companies which are listed, traded or quoted on a Relevant
Exchange.
6. GENERAL MEETING AND UNDERTAKINGS
You will find at the end of this Document the Notice of General
Meeting, to be held at the offices of DMH Stallard LLP at 6 New
Street Square, New Fetter Lane, London EC4A 3BF at 12.00 noon . At
the General Meeting Resolutions to approve the new Manager
Agreements as a related party transaction under the Listing Rules
will be proposed, as an ordinary resolution (resolution 2). In
addition, ordinary resolution 1, and special resolution 4 (together
the "Share Resolutions") will be proposed to grant authorities to
issue Ordinary Shares to RDP pursuant to the Termination Agreement,
and ordinary resolution 3 will be proposed to adopt the New
Investment Policy.
RDP is a related party of the Company under the Listing Rules.
RDPL is a Connected Person of RDP. RDP and RDPL will therefore not
be permitted to vote, and have undertaken not to vote, (and to take
all reasonable steps to ensure that each of their Connected Persons
and/or associates (as defined in the glossary to the Listing Rules)
do not vote) on any of the Resolutions in respect of their
aggregate holding of Existing Ordinary Shares amounting to 450,000
Existing Ordinary Shares, representing approximately 1.13 per cent.
of the Existing Ordinary Share Capital.
7. ACTION TO BE TAKEN
A Form of Proxy is enclosed for use by Shareholders at the
General Meeting. Whether or not Shareholders intend to be present
at the General Meeting, they are asked to complete, sign and return
the Form of Proxy by post to the Company's Registrars,
Computershare Investor Services PLC, The Pavilions, Bridgwater
Road, Bristol, BS99 6ZY or by hand to Computershare Investor
Services PLC, The Pavilions, Bridgwater Road, Bristol, BS13 8AE as
soon as possible, but in any event so as to be received by 12.00
noon on 12 January 2017. The completion and return of a Form of
Proxy will not preclude a Shareholder from attending the General
Meeting and voting in person should he or she wish to do so.
Shareholders who hold their Existing Ordinary Shares through a
nominee should instruct the nominee to submit the Form of Proxy on
their behalf.
CREST members who wish to appoint a proxy or proxies through the
CREST electronic proxy appointment service may do so for the
General Meeting and any adjournment(s) thereof by using the
procedures described in the CREST manual. CREST personal members or
other CREST sponsored members and those CREST members who have
appointed (a) voting service provider(s) should refer to their
CREST sponsor or voting service provider(s), who are able to take
the appropriate action on their behalf. In order for a proxy
appointment or instruction made using the CREST service to be
valid, the appropriate CREST message (a 'CREST Proxy Instruction')
must be properly authenticated in accordance with CREST
specifications and must contain the information required for such
instructions, as described in the CREST manual.
For this purpose, the time of receipt will be taken to be the
time (as determined by the timestamp generated by the CREST system)
from which the issuer's agent is able to retrieve the message. All
messages relating to the appointment of a Proxy or an instruction
to a previously appointed Proxy must be transmitted so as to be
received by Computershare Investor Services PLC (ID: 3RA50) by no
later than 12.00 noon on 12 January 2017. Normal system timings and
limitations will apply in relation to the input of CREST Proxy
Instructions. It is therefore the responsibility of the CREST
member concerned to take such action as shall be necessary to
ensure that a message is transmitted by means of the CREST system
by any particular time. In this connection, CREST members and,
where applicable their CREST sponsor(s) or voting service
provider(s) are referred, in particular, to those sections of the
CREST manual concerning practical limitations of the CREST system
and timings. The Company may treat as invalid an appointment sent
by CREST in the circumstances set out in Regulation 35(5)(a) of the
Uncertificated Securities Regulations 2001.
If you are in any doubt as to what action you should take, or
the contents of this Document, you are recommended to consult
immediately your stockbroker, bank manager, solicitor, accountant,
fund manager or other appropriate independent financial adviser
being a firm authorised under the FSMA, or otherwise from another
appropriately authorised independent financial adviser if you are
in a territory outside the United Kingdom.
8. FURTHER INFORMATION
The Document is available, subject to certain restrictions, to
Shareholders on the Company's website (www.grit.london) and at its
registered office.
Shareholders should read the whole of the Document, which
provides additional information on the Company and the Proposals,
and should not rely on summaries of, or individual parts only of
the Document.
9. RECOMMATION
The Board, having been so advised by Beaumont Cornish (the
Company's Sponsor and Financial Adviser), considers that the new
Manager Agreements are fair and reasonable as far as the
Shareholders are concerned. In giving its advice, Beaumont Cornish
has taken account of, but not relied on, the commercial assessments
of the Directors.
The Board consider that the new Manager Agreements and the
adoption of the New Investment Policy are in the best interests of
the Shareholders and the Company as a whole and unanimously
recommend that Shareholders vote in favour of the Resolutions to be
proposed at the General Meeting. If one or more of these
Resolutions is not passed, then the existing manager agreements and
the current investment policy will remain. The Board, however,
would like Shareholders to consider what we say above in that the
new Manager Agreements are proposed as a means of streamlining the
management of the Company, together with the associated costs, and
the New Investment Policy is being proposed to provide the Company
with the opportunity of making investments in larger scale projects
with the intention of enhancing the returns to Shareholders
RDP is a related party of the Company under the Listing Rules
and RDPL is a Connected Person of RDP. RDP and RDPL will not
therefore be permitted to vote, and have undertaken not to vote,
(and to take all reasonable steps to ensure that each of their
Connected Persons and/or associates (as defined in the glossary to
the Listing Rules) do not vote) on the Resolutions in respect of
their aggregate holding of Existing Ordinary Shares amounting to
450,000 Existing Ordinary Shares, representing approximately 1.13
per cent. of the Existing Ordinary Share Capital.
The Company has received irrevocable undertakings in relation to
the Proposals from the following, which represent a total holding
of 4,957,290 Existing Ordinary Shares or 12.4% of the Ordinary
Share Capital: Arakan Resources Limited, representing a holding of
826,090 Existing Ordinary Shares or 2.06 per cent of the Ordinary
Share Capital; NuLegacy Gold Corporation representing a holding of
1,731,200 of Existing Ordinary Shares or 4.33 per cent. of the
Ordinary Share Capital; and RS and CA Jennings, representing a
holding of 2,400,000 Existing Ordinary Shares or 6.00 per cent. of
the Ordinary Share Capital.
Enquiries to:
David ("Sam") Hutchins, Tel: +(020) 7290
RDP Fund Management LLP 8540
Investment Manager
------------------------------------- -----------------
Martin Cassels Tel: +(0) 131
R&H Fund Services Limited 524 6140
Company Secretary and Administrator
------------------------------------- -----------------
Roland Cornish / Felicity Geidt Tel: +(020) 7628
Beaumont Cornish Limited 3396
Financial Adviser
------------------------------------- -----------------
APPIX
DEFINITIONS
The following defined terms apply throughout this announcement
and are extracted from the Document, unless the context requires
otherwise:
"Act" Companies Act 2006 (as amended)
"Adjusted NAV" the audited Net Asset Value of
GRIT adjusted to add back the
value of any distributions paid
during the relevant performance
period
"Administrator" R&H Fund Services Limited
or "Secretary"
"Admission" admission of the New Ordinary
Shares to the premium listing
segment of the Official List and
to trading on the Main Market
becoming effective
"Articles" the articles of association of
the Company from time to time
"Beaumont Cornish" Beaumont Cornish Limited, the
or "Sponsor" Company's financial adviser and
sponsor, a member of the London
Stock Exchange and which is authorised
and regulated by the FCA with
its registered office at 3 Hardman
Street Manchester M3 3HF
"Benchmark" (a) as at the first calculation
date the NAV on IPO Admission
as increased by the Benchmark
Hurdle Rate in respect of the
period from IPO Admission to such
calculation date and (b) on each
subsequent calculation date the
Target NAV on the immediately
preceding calculation date, increased
by the Benchmark Hurdle Rate,
in respect of the period from
the immediately preceding calculation
date to the relevant calculation
date
"Benchmark Hurdle a rate of 7 per cent. per period
Rate" between calculation dates save
that where such period is more
or less than 12 months the rate
shall be increased or decreased
pro rata by the amount the period
is greater or less than 12 months
"Board" the directors of the Company from
time to time
"Business Day" any day (other than a Saturday,
Sunday or a public holiday) on
which banks are generally open
in the City of London for the
transaction of normal banking
business
"certi cated" a share or other security recorded
or "in certi on the relevant register of the
cated form" company as being held in certi
cated form and title to which
may be transferred by means of
a stock transfer form
"Closing Price" the closing middle-market quotation
of an Ordinary Share, as established
in the daily official list of
the London Stock Exchange
"Company" or Global Resources Investment Trust
"GRIT" Plc, a company incorporated in
England and Wales with registered
number 8256031
"Completion" completion of the Proposals which
is conditional on Admission
"Connected Persons" has the meaning set out in section
252 and section 254 of the Act
and includes a spouse, children
under 18 and any company in which
the relevant person is interested
in shares comprising at least
one-fifth of the share capital
of that company and set out in
1122(2) of the CTA 2010 and includes
a company being connected with
another company
"Control" the power (whether by way of ownership
of shares, proxy, contract, agency
or otherwise) to: (a) cast, or
control the casting of, 30 per
cent. or more of the maximum number
of votes that might be cast at
a general meeting of the Company;
or (b) appoint or remove all,
or the majority, of the directors
of the Company; and/or (ii) the
holding beneficially 30 per cent.
or more of the issued share capital
of the Company (excluding any
part of that issued share capital
that carries no right to participate
beyond a specified amount in a
distribution of either profits
or capital)
"CREST" the relevant system, as de ned
in the CREST Regulations, for
the paperless settlement of share
transfers and the holding of shares
in uncerti cated form in respect
of which Euroclear is the operator
(as de ned in the CREST Regulations)
"CREST Regulations" the Uncerti cated Securities Regulations
2001 (SI 2001 No. 2001/3755) (as
amended)
"CREST Rules" the rules governing the operation
of CREST, consisting of the CREST
Reference Manual, CREST International
Manual, CREST Counterparty Service
Manual, CREST Rules, Registrars
Service Standards, Settlement
Discipline Rules, CCSS Operations
Manual, Daily Timetable, CREST
Application Procedures and CREST
Glossary of Terms (all as defined
in the CREST Glossary of Terms
promulgated by Euroclear on 15
July, 1996 and as amended since
that date)
"CTA 2010" the Corporation Tax Act 2010 and
any statutory modification or
re-enactment thereof for the time
being in force
"Deferred Shares" the existing 50,000 deferred shares
of GBP0.99 each in the capital
of the Company
"Directors" the directors of the Company as
at the date of the Document
"Document" the document
"Excluded Territory" the United States, the Republic
of South Africa, the Republic
of Ireland, Australia, or Japan
or any other jurisdiction where
access to this Document would
constitute a violation of the
relevant laws of such jurisdiction
"Existing Ordinary the issued Ordinary Shares as
Share Capital" at the date of this Document
"Existing Warrants" the existing warrants to subscribe
for new Ordinary Shares
"Existing Ordinary the 39,970,012 Ordinary Shares
Shares" in issue at the date of this Document
"FCA" the United Kingdom Financial Conduct
Authority
"Form of Proxy" the form of proxy accompanying
this Document to be used by Shareholders
in respect of the General Meeting
"FSMA" the Financial Services and Markets
Act 2000 of the United Kingdom
and any statutory modification
or re-enactment thereof for the
time being in force
"General Meeting" the general meeting of the Company
convened for 12.00 noon on 16
January 2017, the notice convening
which is set out in Part IV at
the end of the Document
"Gross Asset the aggregate value of the gross
Value" assets of GRIT, calculated in
accordance with the accounting
policies adopted by GRIT from
time to time
"Investment Management the investment management agreement
Agreement" dated 20 February 2014 between
the Company and RDP, a summary
of which is summarised in paragraph
4.1 of Part II (Additional Information)
of this Document, which is proposed
to be terminated by mutual consent
on Completion
"IPO Admission" the admission of the Ordinary
Shares issued pursuant to the
Company's initial public offering
to the premium listing segment
of the Official List and to trading
on the Main Market, which occurred
on 7 March 2014
"ISIN" International Securities Identifying
Number
"LIM" LIM Asia Multi-Strategy Fund Inc
"Listing Rules" the listing rules made by the
UKLA under section 73A of FSMA,
as amended from time to time
"Loan Note Holders" the holders of the Loan Notes
"Loan Note Instrument" the loan note instrument executed
by GRIT constituting the Loan
Notes and dated 27 February 2014,
which is summarised in paragraph
4.4 of Part II (Additional Information)
of the Document
"Loan Notes" the GBP5 million nominal of 9
per cent. convertible unsecured
loan notes of the Company which
were issued to the Loan Note Holders
pursuant to the Loan Note Instrument
of which GBP4,850,000 were issued
since IPO Admission
"London Stock London Stock Exchange plc
Exchange"
"LPD" 20 December 2016, being the last
practicable date prior to the
publication of the Document
"Main Market" the regulated market of the London
Stock Exchange for officially
listed securities
"Manager Agreements" the Termination Agreement, the
Transitional Services Agreement
and the Service Agreement as further
set out in paragraph 3 of Part
I (Letter from the Chairman) of
the Document
"Month" calendar month
"Monthly Average the aggregate daily NAVs for each
NAV" Month divided by the number of
Business Days in that Month adjusted
to add back the value of any distributions
paid during the relevant performance
period
"Net Asset Value" the value of the assets of GRIT
or "NAV" less its liabilities in total
calculated in accordance with
the accounting policies adopted
by GRIT from time to time
"Net Asset Value NAV divided by the number of Ordinary
per Share" Shares in issue from time to time
"New Investment the proposed new investment policy
Policy" to be adopted by the Company on
Completion and as set out in paragraph
5 of Part I (Letter from the Chairman)
of this Document
"New Ordinary the 2,000,000 ordinary shares
Shares" of GBP0.01 each to be issued to
RDP pursuant to the Termination
Agreement
"Notice of General the notice of the General Meeting
Meeting" set out in Part IV at the end
of the Document
"Official List" the official list maintained by
the UKLA
"Ordinary Shares" the issued ordinary shares of
GBP0.01 each in the capital of
the Company from time to time
"Portfolio" the portfolio of investments of
GRIT from time to time
"Proposals" the new Manager Agreements, the
adoption of the New Investment
Policy and the Share Resolutions
"Proposed Director" David Hutchins, the proposed director
to be appointed to the Board on
Completion
"RDP" or "Investment RDP Fund Management LLP, being
Manager" the Company's investment manager
as at the date of this Document,
whose principal place of business
and registered office is at 4(th)
Floor, Vintners Place, 68 Upper
Thames Street, London EC4V 3BJ
(Tel: +44 (0)20 7290 8540)
"RDPL" Resources Development Partners
Limited, a company wholly owned
by David Hutchins, the Proposed
Director
"Registrar" or Computershare Investor Services
"Receiving Agent" PLC
"Related Party the related party transaction
Transaction" as set out in part II (Letter
from the Chairman) of the Document
"Relevant Exchange" (i) a regulated market, recognised
investment exchange, recognised
stock exchange, recognised overseas
investment exchange or designated
investment exchange, or (ii) a
junior market operated by the
operator of an exchange referred
to in (i)
"Resolutions" the resolutions set out in the
Notice of General Meeting in Part
IV at the end of this Document
"Service Agreement" the service agreement with the
Proposed Director to be entered
into between GRIT and David Hutchins
whereby David Hutchins will be
appointed as a Director, conditional
upon Admission
"Share Resolutions" resolutions 1 and 4 set out in
the Notice of General Meeting
in Part IV at the end of the Document
relating to sections 551 (1)(a)
and (b) and section 570 of the
Act respectively
"Shareholders" person(s) who is/are registered
holder(s) of Ordinary Shares from
time to time
"Sterling" "GBP" the lawful currency of the UK
or "pence"
"Target NAV" at any calculation date the higher
of the (a) NAV, and (b) the Benchmark,
as at the preceding calculation
date as increased by the Benchmark
Hurdle Rate in respect of the
period from the preceding calculation
date to the relevant calculation
date
"Termination the agreement to be entered into
Agreement" between the Company and RDP and
which formalises the Manager Arrangements,
further details of which are summarised
in paragraph 4.6 of Part II (Additional
Information) of the Document
"Transitional the agreement to be entered into
Services Agreement" between the Company and RDP further
details of which are contained
in paragraph 4.7 of Part II (Additional
Information) of the Document
"UK Listing Authority" the FCA acting in its capacity
or "UKLA" as the competent authority for
the purposes of Part VII of FSMA
"UK" or "United the United Kingdom of Great Britain
Kingdom" and Northern Ireland
"uncerti cated" a share or other security recorded
or "in on the relevant register of the
uncerti cated relevant company concerned as
form" being held in uncerti cated form
in CREST and title to which, by
virtue of the CREST Regulations,
may be transferred by means of
CREST
"United States" the United States of America,
or "U.S." its territories and possessions,
any State of America and the District
of Columbia
"U.S. Commodity the United States Commodity Exchange
Exchange Act" Act of 1936, as amended
"US Person" a citizen or resident of the United
States, a corporation, partnership
or other entity created or organised
in or under the laws of the United
States or any person: (i) falling
within the definition of the term
"United States Person" in Regulation
S promulgated under the U.S. Securities
Act; or (ii) who is not a "Non-United
States person" as that term is
defined in Rule 4.7 promulgated
under the U.S. Commodity Exchange
Act
"U.S. Securities the U.S. Securities Act of 1933,
Act" or "Securities as amended
Act"
"US$" or "US the legal currency of the United
Dollars" or "cents" States
"VAT" value added tax
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCUASBRNBAUUAA
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