Interim Management Statement
May 31 2008 - 5:48PM
UK Regulatory
US SPECIAL OPPORTUNITIES TRUST PLC
INTERIM MANAGEMENT STATEMENT FOR THE QUARTER ENDED
29 FEBRUARY 2008
Material Events and Transactions
Investment objective and future of the Company
The Company's objective has been to provide its shareholders with capital
growth and high income through investing in equities and convertibles issued by
US smaller companies and UK high yield securities, primarily comprising the
shares of split capital and high income investment trusts. The Company's
planned wind up date is 31 May 2008.
On 29 February 2008, the Company announced that Lord Lang of Monkton, Ernest
Fenton and William Vanderfelt resigned as Directors of the Company and that
Duncan Abbot (Chairman), Rory Macleod and Andrew Pegge had been appointed as
Directors of the Company, to take immediate effect. On that date the Company
further announced that it was currently structuring proposals with the
Company's advisers to extend the life of the Company in order to realise the
Company's assets and return the realisation proceeds to shareholders on an
expedient basis. Further announcements were made on 28 March 2008 and 4 April
2008 detailing these proposals. A summary of the current proposals is set out
below.
* ZDP Shareholders will be repaid on or shortly after the current wind up date
of 31 May 2008 via a tender offer;
* The life of the Company will be extended until 31 May 2011 and the existing
classes of Income Shares and Capital Shares will be retained;
* The investment objective and policy of the Company will be amended, to
provide shareholders with capital growth through investment in equity and
equity-related instruments, which will be predominantly securities domiciled,
listed, quoted or traded in North America (some of these securities will have
an underlying business that is not in North America). The portfolio will be
managed on the basis that the Company is fully invested in equity and
equity-related instruments to the extent practicable for the remainder of its
life (subject to the recommendation of the Fund Manager who may wish to
increase the cash holding due to market conditions). Liquidity will be managed
so that the costs of realising the portfolio (including market impact costs)
are reduced to the extent practicable as the end of the life of the Company
approaches. It is expected that liquidation of investments will take place in
the last three months of the life of the Company so that a mixture of liquid
securities and cash are handed to the liquidator. The Company may use an
element of gearing if appropriate;
* A tender offer will be made to Income Shareholders (save for certain overseas
shareholders) at 100p per share (irrespective of the actual asset values of the
shares), so as to provide a cash exit on or around 31 May 2008 for no more than
50 per cent of their shareholding. Income Shareholders who do not elect for a
cash exit shall remain invested in the Company. For the avoidance of doubt,
Income Shareholders who elect for a greater percentage shall be scaled back to
50 per cent;
* The rights of the Income Shares will be amended so as to provide Income
Shareholders with a revised and increased final capital entitlement per Income
Share on 31 May 2011: the proposal is that, on a winding-up or return of
capital, and subject to sufficiency of assets, the remaining Income
Shareholders will be entitled to a final capital entitlement on 31 May 2011 of
GBP1.2082 per Income Share.
* The Capital Shareholders will continue to be entitled to all surplus assets
of the Company available for distribution on a winding-up;
* The voting rights of the Income Shares and the Capital Shares will be
adjusted following the tender offer to protect the class rights of the Income
Shares;
* An interim dividend will be paid on or shortly after the current wind up date
of 31 May 2008 to Income Shareholders equal to an amount of the revenue
reserves and accrued income to the record date less certain costs;
* Income Shareholders will continue to enjoy such dividends as may be generated
from surplus income from the portfolio although the managers will not have a
yield objective;
* The terms of the existing management agreement will be amended to include a
lower base management fee and an appropriate performance fee.
A circular in relation to these proposals is expected to be published in early
May for approval at separate class meetings of Income Shareholders, Capital
Shareholders and ZDP Shareholders and an Extraordinary General Meeting of the
Company to be convened on 30 May 2008. If the proposals are not approved by
Shareholders, a resolution will be proposed at a Second Extraordinary General
Meeting convened for the same day at which a resolution to wind up the Company
voluntarily will be put. Weighted voting rights under the Articles mean that
this resolution will be passed if put.
Dividends
On 11 January, the Company declared a second interim dividend in respect of the
year ending 31 May 2008 of 0.80p per Income share. This dividend was paid on 16
February 2008.
On 2 April 2008, the Company declared a third interim dividend in respect of
the year ending 31 May 2008 of 0.80p per Income share. This dividend will be
paid on 16 May 2008.
Banking and hedging arrangements
On 29 February 2008, the Company repaid the final �7 million of its debt
liability. The Company does not currently have any bank borrowings.
Financial Highlights
29 February 30 November % change
2008 2007
Zero Dividend Preference share NAV 178.77p 175.05p 2.13%
Mid price 178.25p 175.25p 1.71%
Income share NAV* 101.58p 101.64p (0.06)%
Mid price 91.00p 93.00p (2.15)%
Capital share NAV 2.73p 14.94p (81.73)%
Mid price 5.75p 14.00p (58.93)%
Unit (1 Cap and 1 Inc share) NAV* 104.31p 116.58p (10.52)%
Mid price 99.00p 107.50p (7.91)%
Russell 2000 Index (�) (capital 344.95 373.40 (4.99)%
return)
FTSE All Share (capital return) 3013.02 3280.87 (8.16)%
US Dollar/Sterling exchange rate 1.9892 2.05615 (3.26)%
* Including current period revenue
Largest Holdings (% of Gross Assets)
US Growth portfolio
Fushi International 6.26
Bovie Medical 4.19
Points International 4.05
Zhongpin (A Prefs) 3.12
A-Power Energy Generation Systems 2.64
Cover-All Technologies 2.60
Williams Companies 2.32
Zhongpin (Common Stock) 2.29
Medical Action Industries 2.28
Comtech Group 2.02
Hanwei Energy Services 1.61
OmniVision Technologies 1.53
HLS Systems International 1.46
Wonder Auto Technologies 1.45
Simtek 1.18
Motorcar Parts of America 1.08
Silverleaf 1.07
FBR Capital Market 1.04
Hemobiotech 0.97
Asian Financial 0.97
Income portfolio
RABO Bank 5.89% CD 21/04/08 2.31
Deutsche Bank 5.30% CD 09/02/09 1.28
Standard Chartered 5.61% CD 20/05/08 1.28
UBS 6.29% CD 07/07/08 1.16
Acorn Income Fund 1.08
Calyon 5.73% CD 07/04/08 0.96
Credit Agricole 5.91% CD 21/04/08 0.77
Small Companies Dividend 0.72
KPN 8.25% 11/04/08 0.64
GE Capital UK Funding 4.75% 15/12/10 0.38
RABO Bank 9.62% 03/07/09 (Prudential) 0.36
Barclays 10.90% 16/08/10 (Land Secs) 0.35
T2 Income Fund 0.30
ING Bank 5.88% CD 21/04/08 0.26
RABO Bank 10.15% 18/05/09 (Vodafone) 0.26
Barclays 10.00% 03/10/08 (Emap) 0.25
Yorkshire BS 5.98% CD 19/05/08 0.24
Deutsche Bank 9.84% 18/06/10 0.24
(GlaxoSmithKline)
HSBC Infrastructure 0.23
BP 0.22
Further Information
Daily prices, Company announcements, Report and Accounts and monthly fact
sheets are available via www.premierassetmanagement.co.uk.
Enquiries:
Cenkos Securities plc- William Rogers/Dion Di Miceli 0207 3971920/1921
Duncan Abbot, Chairman Tel: 07702 776320
10 April 2008
END
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