TIDMTLI
RNS Number : 1597K
Alternative Asset Opps PCC Ltd
20 June 2014
Alternative Asset Opportunities PCC Limited
Proposed conditional return of capital
Alternative Asset Opportunities PCC Limited (the "Company")
today announces a return of capital conditional on a proposed
amendment to the Company's Articles of Incorporation which requires
the approval of Shareholders at an Extraordinary General Meeting
("EGM") to be held on 24 July 2014.
If the Resolution at the EGM is passed, the Board intends to
make an initial capital return to Shareholders of 2.0p per Share
(approximately GBP1.4 million in aggregate). This will be paid on 8
August 2014 to those Shareholders on the register at the close of
business on 1 August 2014. The Shares will be marked ex on 30 July
2014.
The Company is today publishing a circular (the "Circular"),
following approval by the UK Listing Authority, in respect of the
proposed return of capital. A copy of the Circular will be sent to
Shareholders and submitted to the National Storage Mechanism.
The Chairman's Letter, as contained in the Circular, is set out
below.
Terms used and not defined in this announcement bear the meaning
given to them in the Circular to be published today.
"Dear Shareholder
Proposal for amendment to the Company's Articles of
Incorporation and conditional return of capital to Shareholders
INTRODUCTION
In my last two Chairman's statements accompanying our results
announcements I have commented that, with the Company on a sounder
financial footing and with a continuing flow of policy maturities,
the Company could be in a position to start to return funds to
Shareholders.
Following a very satisfactory flow of funds from recent policy
maturities, the Company now wishes to seek Shareholder approval to
put in place a mechanism that will enable the Company to make
capital returns to Shareholders.
The purpose of this document is (a) to provide you with details
of and the background to the proposed amendment to the Company's
Articles to facilitate returns of capital to Shareholders; (b) to
convene an EGM to seek the approval of Shareholders, in accordance
with the Listing Rules; and (c) to notify Shareholders that,
conditional on the passing of the Resolution, the Board proposes to
make an initial capital return to Shareholders shortly after the
EGM amounting to a sum of 2.0p per share (approximately GBP1.4
million in aggregate).
Background to and reasons for the Proposal
Following the placing and open offer in November 2012 the
borrowings of the Company were reduced significantly, thereby
enabling the Company to continue its policy of seeking to hold its
policies to maturity rather than procuring early asset sales which
the Board did not consider to be in the long term interests of
Shareholders. The level of maturities experienced in the financial
year ending 30 June 2014, at $17.4 million, has been the highest in
the Company's history and as at 18 June 2014 the Company's cash
balances amounted to $3.7 million and the proceeds from 2 announced
maturities not yet received amounted to an additional $1.35
million.
The bank facility, which was renewed with Allied Irish Banks plc
at the time of the placing and open offer, expired on 31 March 2014
and was replaced by a new revolving loan facility with AIB Group
(UK) PLC of up to $10 million which is intended to enable the
Company to continue to fulfil its obligations, including the
payment of premiums, until the expiry of the facility on 31 March
2016. The current facility is on substantially similar terms to the
previous facility but at a reduced interest rate of 3.25 per cent.
per annum above LIBOR and a reduced commitment fee. In addition,
unlike the previous facility, the current facility will permit the
Company to make capital distributions to Shareholders, assuming (a)
no default is occurring, (b) no loans are outstanding under the
facility and (c) the Company is not in breach of the asset cover
requirement set out therein.
Given the terms of the current facility, the current level of
cash balances and the continuing flow of maturities, the Board
believes that it is appropriate to put in place a mechanism to
enable the Company to make capital returns to Shareholders in a
cost effective manner.
The Proposal will involve a change to the Company's Articles to
include new provisions that will enable the Directors of the
Company to distribute cash to Shareholders through the issue and
redemption of B Shares. Each time the Board resolves to make such a
distribution, the Company will announce a bonus issue of B Shares
on a pro rata basis. Immediately upon being issued, fully paid, the
B Shares will be redeemed for the amount paid up and the cash
proceeds will then be paid to Shareholders.
conditional return of capital following the egm
If the Resolution at the EGM is passed, the Board intends to
make an initial capital return to Shareholders, through the issue
and redemption of B Shares paid up out of the Company's share
premium reserves, amounting to a sum of 2.0p per Share
(approximately GBP1.4 million in aggregate). This will be paid on 8
August 2014, on a pro rata basis, to those Shareholders on the
register at the close of business on 1 August 2014. The Shares will
be marked ex on 30 July 2014.
Any future capital distributions by way of B Share issue will be
declared by the Board, having taken into account the flow of
maturities, working capital requirements and the cash resources of
the Company. As at 31 May 2014, the Company had 90 policies on 79
lives in its portfolio with a face value of $142.9 million and
valuation of $50.2 million. The average age of the individuals
covered by the policies in the portfolio was 90.3 years.
key features AND BENEFITS of b shares
As stated above, the Articles of Incorporation, as amended,
would provide for a new class of redeemable B Shares that can be
issued, fully paid up, from amounts standing to the credit of the
Company's share premium account from time to time to Shareholders
entitled to distributions of such amounts. Such B Shares would,
upon issue, be compulsorily redeemed, at the discretion of the
Directors and subject always to any applicable laws (including the
satisfaction of any solvency laws).
The New Articles would require any such bonus issue of B Shares
to be allotted to entitled Shareholders pro rata to their holdings
of Shares as at the time of issue of the B Shares.
Save for an entitlement to a nominal fixed annual dividend of
0.0001p, the B Shares would carry no rights to dividends or other
distributions out of the profits of the Company. Holders of B
Shares will not be entitled to any surplus assets of the Company
apart from distributions of capital paid up on the B Shares. The B
Shares will not be listed, will not carry any right to receive
notice of, or attend or vote at, any general meeting of the Company
and will not be transferable.
The attention of Shareholders is drawn to Part III of this
Circular which sets out a general guide to certain aspects of the
tax treatment of Shareholders on an issue and redemption of the B
Shares. Such redemption should allow most UK taxpayers to receive
the return in the form of a capital receipt. Shareholders who are
in any doubt as to their tax position or who are subject to tax in
a jurisdiction other than the UK should consult an appropriate
professional adviser.
THE RESOLUTION
This document includes a Notice of Extraordinary General
Meeting, at which a special resolution will be proposed for the
adoption of the Company's New Articles.
The Resolution, which will be proposed as a special resolution
and require the approval of not less than 75 per cent. of those
Shareholders present and voting at the EGM (in person or by proxy),
will ask Shareholders to approve the Company's New Articles. The
principal amendments are as set out in Part II of this
document.
Risk associated with the proposal
In considering your decision in relation to the Proposal, you
are referred to the risk that the Proposal is designed to
facilitate the return of capital to Shareholders and will therefore
reduce the cash resources of the Company each time a distribution
is made. Although the Board will take careful account of the
working capital requirements of the Company prior to declaring a
capital return, Shareholders should note that the level of cash
resources available to the Company to meet future premium payments
and other operating expenses will be lower following each
distribution.
Shareholders should read this Circular carefully and in its
entirety and, if you are in any doubt about the contents of this
Circular or the action you should take, you are recommended to seek
immediately your own personal financial advice from your
stockbroker, bank manager, solicitor, accountant or other
independent financial adviser authorised under the Financial
Services and Markets Act 2000.
EXTRAORDINARY GENERAL MEETING
Set out at the end of this document is a notice convening an
Extraordinary General Meeting of the Company to be held at 11.00
a.m. at 199 Bishopsgate, London EC2M 3TY on 24 July 2014 at which a
special resolution will be proposed to adopt the Company's New
Articles.
All Shareholders of the Company are entitled to attend and vote
at the Company's EGM. In accordance with the Company's Articles of
Incorporation, each Shareholder present in person (or, if a
corporation, by a representative) shall upon a show of hands have
one vote and upon a poll shall have one vote for every Share held.
Two Shareholders present in person (or by proxy) holding 5 per
cent. of the issued share capital between them (excluding any
Shares held as treasury shares) will constitute a quorum.
ACTION TO BE TAKEN
You will find enclosed with this document a Form of Proxy for
use at the EGM. Whether or not you propose to attend the EGM in
person, you are asked to complete the Form of Proxy and return it
to Capita Asset Services, at PXS1, 34 Beckenham Road, Beckenham,
Kent BR3 4ZF so as to arrive as soon as possible, but in any event
so as to be received not later than 11.00 a.m. on 22 July 2014.
Completion and return of a Form of Proxy will not preclude you from
attending and voting at the EGM in person if you wish.
If you are in any doubt as to what action you should take, you
are recommended to seek your own personal financial advice from
your stockbroker, bank manager, solicitor, accountant or other
independent financial adviser authorised under the Financial
Services and Markets Act 2000 immediately.
DOCUMENTS AVAILABLE FOR INSPECTION
A draft of the Company's New Articles proposed for adoption at
the EGM will be available for inspection at the offices of Herbert
Smith Freehills LLP, Exchange House, Primrose Street, London EC2A
2HS during normal business hours on any Business Day from the date
of this document until the conclusion of the EGM. The draft New
Articles will also be available for inspection 15 minutes prior to,
and during, the EGM at 199 Bishopsgate, London EC2M 3TY.
CONSEQUENCES OF THE PROPOSAL NOT BEING APPROVED AT THE EGM
If the Proposal is not approved at the EGM, the Articles will
remain unamended and the Board will consider alternative methods
for the distribution of cash to Shareholders.
RECOMMENDATION
In the Board's opinion, the Proposal and the Resolution to be
put forward at the Extraordinary General Meeting are in the best
interests of the Company and its Shareholders as a whole.
Accordingly, your Board unanimously recommends that Shareholders
vote in favour of the Resolution, as they intend to do in respect
of their own beneficial holdings which amount to, in aggregate,
1,602,454 Shares (representing 2.2 per cent. of the existing issued
Share capital of the Company as at 19 June 2014, the last
practicable day prior to publication of this document).
Yours faithfully
Charles Tracy
Chairman"
Enquiries
Peter Ingram 020 7065 1467
Company Secretary
Westhouse Securities Limited
Alastair Moreton/Hannah Young/Darren Vickers 020 7601 6118
This information is provided by RNS
The company news service from the London Stock Exchange
END
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