UKML Uk Mortgages Limited

THE INFORMATION IN THIS ANNOUNCEMENT IS RESTRICTED AND IS NOT FOR PUBLICATION, RELEASE OR DISTRIBUTION (IN WHOLE OR IN PART) DIRECTLY OR INDIRECTLY IN OR INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF THAT JURISDICTION. THIS ANNOUNCEMENT DOES NOT CONSTITUTE A TAKEOVER OFFER OR AN OFFER OF SECURITIES.

Capitalised terms used in this Announcement, unless otherwise defined, have the same meanings as set out in the Circular.

26 February 2021

UK MORTGAGES LIMITED

(a closed-ended investment company incorporated in Guernsey with registration number 60440) LEI 549300388LT7VTHCIT59

Circular to Shareholders and Notice of Extraordinary General Meeting relating to the Company’s proposed tender offers

Following the result of a Shareholders’ vote which was announced on 4 December 2020, the Board of UK Mortgages Limited (the “Company”) is recommending for the Company to return in the region of £40,000,000 to Shareholders through proposed tender offers and associated share repurchases. The Company also recommends proposal for further tender offers.

The Board is therefore convening an Extraordinary General Meeting of the Company to be held at 3 p.m. on Tuesday, 23 March 2021 at the offices of Northern Trust International Fund Administration Services (Guernsey) Limited, Trafalgar Court, Les Banques, St. Peter Port, Guernsey, Channel Islands GY1 3QL  in order to approve the proposal.

Introduction

On 4 December 2020 Shareholders voted in favour of the Company’s proposals described in the November Circular to, among other things, (i) distribute the proceeds (net of expenses and future commitments)of the sale of Cornhill No. 6 and Malt Hill No. 2 through a tender offer (to be implemented by Numis, acting as principal) and the subsequent repurchase of Ordinary Shares from Numis by the Company.

On 8 February 2021 the Company announced that it had signed agreements to sell two buy-to-let mortgages portfolios financed by Cornhill No. 6 and Malt Hill No. 2, which subject to successful completion is expected to release capital enabling two tenders to be carried out in February (the “February Tender Offer”) and May (the “May Tender Offer”) respectively, on the terms and subject to the conditions set out in the Circular.

The Company today announces that it proposes to return up in the region of £40,000,000 to Shareholders in two tranches, each by way of a tender offer and associated share repurchase. Having carried out a full review of the Company’s liquid resources, future cash requirements, commitments and costs, the Board has concluded that the February Tender Offer will comprise a capital return of £20,000,000.

It is expected that the May Tender Offer will comprise a capital return in the region of £20,000,000. Details of the May Tender Offer will be provided at a later date by the Company by RIS announcement following the expected completion of the sale of Malt Hill No. 2 in May 2021.

The first return of capital, being the February Tender Offer, will take place by way of a tender offer and associated repurchase of up to 11.5 per cent. of the Ordinary Shares at a price of 75p per Ordinary Shares, which represents a 8.3 per cent. discount to the net asset value per Ordinary Share of the Company as at the Latest Practicable Date.

The price per Ordinary Share under the May Tender Offer and any further Tender Offers will be announced by the Company by RIS announcement on or before the opening of the relevant Tender Offer and shall not be less than 75p per Ordinary Share.

The Tender Offers

Subject to approval by Shareholders at the Extraordinary General meeting, the Board intends that:

Returns of cash are to take the form of two tender offers (to be implemented by Numis, acting as principal) and subsequent repurchases of Ordinary Shares by the Company. Whilst the Company does not currently intend to make further tender offers after the May Tender Offer, it is seeking authority to do so, to provide the Company with that optionality going forward. The terms and conditions of the Tender Offers are set out in Part II of the Circular.

Under the February Tender Offer the Company is proposing to return £20,000,000 at 75p per Ordinary Share (being a 8.3 per cent. discount to the net asset value per Ordinary Share at the Latest Practicable Date). The maximum number of Ordinary Shares subject to Repurchase under the February Tender Offer will be 26,666,666, equivalent to 11.5 per cent. of the issued share capital of the Company which, as at Latest Practicable Date.

Further details of the May Tender Offer, which will be carried out in accordance with the Terms and Conditions of the Tender Offers will be provided by the Company by RIS announcement on or before the opening of the May Tender Offer.

Shareholders whose names appear on the Register on the relevant Tender Record Date may apply to tender their Ordinary Shares for purchase by the Company at the relevant Tender Offer Price.

The number of Ordinary Shares to which the Tender Offers will apply

The number of Ordinary Shares subject to the February Tender Offer (and the associated Repurchase) is 26,666,666, which is calculated by dividing £20,000,000 by the Tender Offer Price and rounding down to the nearest whole number. This is 11.5 per cent. of all Ordinary Shares in issue as at the Latest Practicable Date, which represents the “Basic Entitlement” under the Tender Offer and each Qualifying Shareholder is entitled to tender a percentage of their holding equal to (or less than, if they so choose) the Basic Entitlement. By way of example, the Basic Entitlement of a Qualifying Shareholder with 100 Ordinary Shares would be 11 Ordinary Shares. Qualifying Shareholders will also be entitled to apply to tender Ordinary Shares above their Basic Entitlement, which, may be satisfied on a pro rata basis to the extent that other Qualifying Shareholders do not tender up to their respective Basic Entitlements.

The number of Ordinary Shares subject to further Tender Offers and the Basic Entitlements of Shareholders in relation to such Tender Offers will be calculated using the same methodology as is applied in respect of the February Tender Offer and will be notified to Shareholders in an RIS announcement on or before the opening of the relevant Tender Offer.

Benefits of the Tender Offers

The Board considers the Tender Offers and the subsequent Repurchases to be in the best interests of the Company and Shareholders as a whole and is, therefore, recommending that Shareholders vote in favour of the Resolution. However, the Board is not making any recommendation to Shareholders as to whether tendering Ordinary Shares under any Tender Offer is in their own individual best interests. Whether or not Qualifying Shareholders decide to tender all or any of their Ordinary Shares is a decision for individual Qualifying Shareholders.

Qualifying Shareholders should take into account their tax position when deciding whether or not to participate in the Tender Offers. A summary of material UK taxation considerations in connection with the Tender Offers is set out in Part III of the Circular. Qualifying Shareholders are advised to take independent advice in relation to the tax implications for them of selling Ordinary Shares pursuant to the Tender Offers.

The Board reserves the right not to proceed with any Tender Offer (and the subsequent Repurchase) if it concludes, at any time prior to the announcement of the results of the relevant Tender Offer, that the implementation of that Tender Offer (and the associated Repurchase) are no longer in the interests of the Company and the Shareholders as a whole.

Extraordinary General Meeting

An extraordinary general meeting is being convened at 3 p.m. on Tuesday, 23 March 2021 at the offices of Northern Trust International Fund Administration Services (Guernsey) Limited, Trafalgar Court, Les Banques, St. Peter Port, Guernsey, Channel Islands GY1 3QL to consider and, if thought fit, pass the Resolution, as set out in full in the Notice of General Meeting at the end of the Circular.

Recommendation

The Board considers the Proposal to be in the best interest of Shareholders as a whole. Accordingly, the Board unanimously recommends that Shareholders vote in favour of the Resolution to be proposed at the Extraordinary General Meeting. The Directors intend to vote in favour of the Resolution in respect of their holdings of Ordinary Shares amounting to 219,050 Ordinary Shares in aggregate (representing approximately 0.09 per cent. of the issued Ordinary Share capital of the Company, as at the Latest Practicable Date

Expected Timetable

Notes:
1. References to times above and in the Circular generally are to London time unless otherwise specified.
2. All times and dates in the expected timetable and in the Circular may be adjusted by the Company. Any changes to the timetable will be notified via an RIS.

Terms used and not defined in this announcement shall have the meaning given to them in the Circular.

Enquiries:

UK Mortgages Limited
Christopher Waldron (Chairman)               020 7260 1000

Numis Securities Limited, Financial Adviser and Corporate Broker
Hugh Jonathan                                           020 7260 1000
Nathan Brown

Important notice

This announcement is not intended to and does not constitute an offer to buy or the solicitation of an offer to subscribe for or sell or an invitation to purchase or subscribe for any securities or the solicitation of any vote in any jurisdiction. The release, publication or distribution of this announcement in whole or in part, directly or indirectly, in, into or from certain jurisdictions may be restricted by law and therefore persons in such jurisdictions should inform themselves about and observe such restrictions.

Numis Securities Limited ("Numis"), which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively for UK Mortgages Limited and no one else in connection with the matters set out in this announcement and will not regard any other person as its client in relation to the matters in this announcement and will not be responsible to anyone other than UK Mortgages Limited for providing the protections afforded to clients of Numis, nor for providing advice in relation to any matter referred to herein.

Forward looking statements

This announcement, oral statements made regarding the Proposal, and other information published by the Company may contain statements which are, or may be deemed to be, “forward-looking statements”. Forward-looking statements are prospective in nature and are not based on historical facts, but rather on current expectations and projections of the management of The Company about future events, and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements. Often, but not always, forwardlooking statements can be identified by the use of forward-looking words such as “plans”, “expects” or “does not expect”, “is expected”, “is subject to”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “should”, “would”, “might” or “will” be taken, occur or be achieved. Although The Company believe that the expectations reflected in such forward-looking statements are reasonable, The Company can give no assurance that such expectations will prove to be correct. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by such forwardlooking statements. Such forward-looking statements should therefore be construed in the light of such factors. Neither The Company, nor any of its associates or directors, officers or advisers, provides any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this announcement will actually occur. You are cautioned not to place undue reliance on these forward-looking statements. Other than in accordance with its legal or regulatory obligations (including under the Disclosure Guidance and Transparency Rules of the FCA), the Company is under no obligation, and expressly disclaims any intention or obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Publication on website and availability of hard copies

Copies can be downloaded from the Company's website:

https://twentyfouram.com/en/funds/uk-mortgages-fund/