TIDMJIGI TIDMJIGU TIDMJIGC
RNS Number : 5398N
JPMorgan Income & Growth IT PLC
26 October 2016
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN ARE NOT
FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY,
IN OR INTO, THE UNITED STATES, AUSTRALIA, CANADA OR THE REPUBLIC OF
SOUTH AFRICA
26 October 2016
JPMORGAN INCOME & GROWTH INVESTMENT TRUST PLC
Scheme of Reconstruction - Publication of Circular
On 20 April 2016, JPMorgan Income & Growth Investment Trust
plc (the "Company") announced its intentions to put forward a set
of proposals to be implemented on 30 November 2016 (the
"Proposals") to coincide the end of the Company's fixed life. The
Board is pleased to announce that the circular in connection with
the Proposals and containing notices of the General Meetings (the
"Circular") has been published.
Under the Proposals, the Company's shareholders are being
offered a choice of the following:
-- a tax and cost efficient rollover into new shares to be
issued by JPMorgan Elect plc ("JPMorgan Elect"); and/or
-- a cash exit at NAV less costs.
JPMorgan Elect, which, as at 19 October 2016 had total net
assets of approximately GBP291.51 million, has three share classes,
each with distinct investment policies, objectives and underlying
investment portfolios, and its structure allows for quarterly
conversion between share classes at a price close to net asset
value. The investment objectives of the three share classes, which
the Board considers to be comparable to the Company's overall
investment objective, are set out in full in the Circular and in
the prospectus related to the issue of JPMorgan Elect Securities
pursuant to the scheme by JPMorgan Elect (the "JPMorgan Elect
Prospectus").
There is a high degree of overlap between the underlying
holdings of the Company and those of JPMorgan Elect's Managed
Income share class. In addition, the Company's shareholders who
choose to roll over their investment will benefit from the
continuity of management as the Company's portfolio managers are
also responsible for managing JPMorgan Elect's portfolio.
The Proposals are subject to the approval of both the Company's
shareholders and shareholders of JPMorgan Elect.
The Circular will shortly be available on the Company's website
at www.jpmincomeandgrowth.co.uk and on the National Storage
Mechanism at www.morningstar.co.uk/uk/NSM.
The Proposals
Under the Proposals, the Company will be wound up on 30 November
2016 by means of a members' voluntary liquidation pursuant to a
scheme of reconstruction under section 110 of the Insolvency Act
and Shareholders and Unitholders can choose to receive any
combination of the following in respect of all or part of their
holding of Shares in the Company:
-- Managed Income Shares in JPMorgan Elect; and/or
-- Managed Growth Shares in JPMorgan Elect; and/or
-- Managed Cash Shares in JPMorgan Elect; and/or
-- cash.
The JPMorgan Elect Securities will be issued at a price
equivalent to the NAV per share plus an issue premium as set out
under "Costs of the Proposals" below.
Income Shareholders and Unitholders (other than Restricted
Shareholders) who do not choose one or more of the Options set out
above will be treated as having chosen to rollover their entire
investment in the Company into JPMorgan Elect's Managed Income
Shares. Capital Shareholders (other than Restricted Shareholders)
who do not choose one or more of the Options set out above will be
treated as having chosen to rollover their entire investment in the
Company into JPMorgan Elect's Managed Growth Shares.
Benefits of the Proposals
Benefits for all Shareholders and Unitholders
The Directors consider that the Proposals should have the
following benefits for all Shareholders and Unitholders:
-- they provide Shareholders and Unitholders with a greater
choice than if the Company were simply to be wound up, since the
Proposals enable Shareholders and Unitholders to (i) continue their
investment exposure through a rollover into JPMorgan Elect
Securities; (ii) receive cash; or (iii) receive a combination of
cash and JPMorgan Elect Securities; and
-- they save on costs that would otherwise be incurred on the
realisation of the Company's portfolio on a winding-up as certain
assets are expected to be transferred to JPMorgan Elect.
Benefits for Shareholders and Unitholders who choose to rollover
into JPMorgan Elect Securities
The Directors consider that the Proposals should have the
following additional benefits for Shareholders and Unitholders who
choose to rollover their investment in the Company into JPMorgan
Elect Securities:
-- they will enable Shareholders and Unitholders to retain
market exposure through another investment trust whose portfolio is
managed by the same team as manages the Company's portfolio and to
continue to receive investment returns without triggering an
immediate liability to capital gains tax; and
-- they will enable Shareholders and Unitholders to avoid
dealing and other costs associated with a share purchase in the
secondary market.
Conditions to the Scheme
The Scheme is conditional upon, amongst other things:
(i) the passing of all the Resolutions to be proposed at: (a)
the First General Meeting; and (b) the Second General Meeting and
all conditions to such Resolutions (excluding any condition
relating to the passing of any other Resolution) being
fulfilled;
(ii) the passing of the JPMorgan Elect Resolutions;
(iii) the UK Listing Authority agreeing to amend the listing of
the Shares to reflect their reclassification as Reclassified Shares
for the purpose of implementing the Scheme;
(iv) the UK Listing Authority having agreed to admit the
JPMorgan Elect Securities which are to be issued under the Scheme
to the premium segment of the Official List and the London Stock
Exchange having agreed to admit such JPMorgan Elect Securities to
trading on the main market for listed securities of the London
Stock Exchange; and
(v) the Directors not resolving to abandon the Scheme.
In the event that any of conditions (i), (ii), (iii) and (iv)
fails to be satisfied, the Winding-up Resolution will, in any event
be put to Shareholders at the Second General Meeting, which will
place the Company into members' voluntary liquidation and appoint
the Liquidators.
The Rollover Vehicle - JPMorgan Elect plc
JPMorgan Elect is an investment trust company whose shares are
admitted to the premium segment of the Official List and to trading
on the main market for listed securities of the London Stock
Exchange. JPMorgan Elect has three share classes, Managed Income
Shares, Managed Growth Shares and Managed Cash Shares, each with
distinct investment policies, objectives and underlying investment
portfolios. Each share class is listed separately and traded on the
London Stock Exchange.
Shareholders in JPMorgan Elect may convert between each class of
JPMorgan Elect Securities in February, May, August and November in
each year without incurring a liability for capital gains tax. In
addition, Managed Cash shareholders may also elect to have their
shares repurchased by JPMorgan Elect on each quarterly conversion
date at a price close to Net Asset Value.
JPMorgan Elect employs JPMorgan Funds Limited ("JPMF") as its
Alternative Investment Fund Manager, which, in turn, delegates
portfolio management to JPMorgan Asset Management (UK) Limited
("JPMAM") to manage its assets actively. Both JPMF and JPMAM
perform the same functions for the Company.
In connection with the Scheme, it is proposed that Karl
Sternberg, chairman of the Company, will be appointed to the
JPMorgan Elect Board shortly following Admission and that he will
stand for election as a director of JPMorgan Elect at its annual
general meeting in 2017.
Further details of each class of JPMorgan Elect Securities which
are being offered under the Scheme are set out in the Circular and
in the JPM Elect Prospectus.
Costs of the Proposals
The costs of the Proposals (including all advisers' fees,
printing and other ancillary costs of the Proposals but excluding
stamp duty incurred on the in specie transfer of assets from the
Company to JPMorgan Elect pursuant to the Transfer Agreement) are
expected to be approximately GBP450,000 (inclusive of VAT). The
stamp duty will be paid by the enlarged JPMorgan Elect and spread
across the existing shareholders of JPMorgan Elect as well as the
Company's Shareholders electing to roll over.
JPMF has agreed to contribute by way of a waiver of management
fees an amount such that the net costs of the Proposals to
Shareholders (excluding any dealing costs to realign or realise the
Company's portfolio), will be limited to GBP248,000 which is
approximately the amount which would have been incurred had the
Scheme not been put forward and the Company simply placed into
liquidation at the end of its fixed life.
Those Shareholders and Unitholders who choose to receive
JPMorgan Elect Securities for some or all of their investment will
also incur costs equal to the issue premium (the "Issue Premium")
applicable to the relevant JPMorgan Elect Securities. This Issue
Premium is intended to defray the costs which will be incurred by
JPMorgan Elect in respect of its participation in the Scheme.
The level of the Issue Premium will depend on the value of the
assets to be transferred to JPMorgan Elect under the Scheme. If the
value of these assets is less than GBP40 million then the Issue
Premium will be set at 1.0 per cent. However, if their value
exceeds GBP40 million, the Issue Premium will reduce on a straight
line basis such that if their value equals GBP70 million (or more)
then the Issue Premium will be set at 0.65 per cent.
Liquidation Fund
Before any assets are transferred to JPMorgan Elect under the
Scheme or set aside to pay Shareholders or Unitholders who have
elected for cash, the Liquidators will retain cash and other assets
in a liquidation fund (the "Liquidation Fund") in an amount which
they consider sufficient to provide for all liabilities of the
Company (including tax and contingent liabilities and an amount for
unknown and unascertained liabilities of the Company). The
retention in respect of unknown and unascertained liabilities is
currently expected to be GBP50,000. Further details of the
Liquidation Fund are set out in Parts II and III of the
Circular.
Shareholder meetings
The Proposals are conditional on the approval of Shareholders
which is being sought at the First General Meeting and the Second
General Meeting.
At the First General Meeting special resolutions will be
proposed which, if passed, will reclassify the Income Shares and
the Capital Shares (whether held separately or in the form of
Units), authorise the implementation of the Scheme by the
Liquidators and amend the Articles of Association of the Company
for the purposes of implementing the Scheme.
At the Second General Meeting, a special resolution will be
proposed which, if passed, will appoint the Liquidators and the
Company will be placed into liquidation (the "Winding-up
Resolution").
In accordance with the Articles, weighted voting rights will
apply on all the special resolutions to be proposed at the General
Meetings so as to ensure that all of the resolutions are
passed.
Expected timetable
2016
Latest time for receipt 6.00 p.m. on 11 November
of Plan Forms of Instruction
from Plan Participants
Latest time for receipt 6.00 p.m. on 11 November
of Voting Forms of Direction
from Plan Participants who
hold Shares or Units for
use at the First General
Meeting
Time from which it is advised 6.00 p.m. on 16 November
that dealings in Shares
and Units will be for cash
settlement only and immediate
delivery of documents of
title
Latest time for receipt 12.30 p.m. on 17 November
of Forms of Proxy from Shareholders
and Unitholders for use
at the First General Meeting
Closing of the Company's 6.00 p.m. on 18 November
register of members and
Record Date for participation
in the Proposals
Latest time for receipt 6.00 p.m. on 18 November
of Forms of Election from
Shareholders and Unitholders
Shares disabled in CREST 6.00 p.m. on 18 November
First General Meeting 12.30 p.m. on 21 November
Latest time for receipt 6.00 p.m. on 23 November
of Voting Forms of Direction
from Plan Participants who
hold Shares or Units for
use at the Second General
Meeting
Latest time for receipt 10.30 a.m. on 28 November
of Forms of Proxy from Shareholders
and Unitholders for use
at the Second General Meeting
Calculation Date 5.00 p.m. on 28 November
Opening of the Company's 8.00 a.m. on 29 November
register of members and
commencement of dealings
in respect of the Reclassified
Shares
Dealings in Reclassified 7.30 a.m. on 30 November
Shares suspended
Second General Meeting 10.30 a.m. on 30 November
Scheme Effective Date and 1 December
Transfer Date
CREST accounts credited 2 December
with JPMorgan Elect Securities
Admission of JPMorgan Elect 8.00 a.m. on 2 December
Securities and dealings
in JPMorgan Elect Securities
commence
Cheques expected to be despatched on or as soon as practicable
in respect of the Cash Option after 5 December
and CREST payments made
to Shareholders and Unitholders
Cheques expected to be despatched on or as soon as practicable
in respect of Plan Participants after 5 December
electing for the Cash Option
Share certificates for JPMorgan week commencing 5
Elect Securities issued December
under the Scheme expected
to be despatched
Cancellation of the Reclassified as soon as practicable
Shares after the Scheme Effective
Date when all of the
capital assets of
the Company have been
realised
The times and dates set out in the expected timetable of events
above may be adjusted by the Company, in which event details of the
new times and dates will be notified, as requested, to the UK
Listing Authority, the London Stock Exchange and, where
appropriate, Shareholders and Unitholders.
This announcement does not contain all the information which is
contained in the Circular. Shareholders and Unitholders should read
the Circular and the JPMorgan Elect Prospectus to make informed
elections under the Proposals.
Terms used and not defined in this announcement have the
meanings given in the Circular unless the context otherwise
requires.
For further information, please contact:
JPMorgan Funds Limited +44 (0)20 7742
Divya Amin, Company Secretary 4000
Winterflood Investment Trusts
Joe Winkley +44 (0)20 3100
Neil Morgan 0000
This information is provided by RNS
The company news service from the London Stock Exchange
END
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