RNS No 8209d
CU ENVIRONMENTAL TRUST PLC
26th March 1999
CU ENVIRONMENTAL TRUST PLC
to be re-named
THE QUARTERLY HIGH INCOME TRUST PLC
The Board today announces recommended proposals for the
reorganisation of the Company. The Proposals comprise:
- a new investment objective which will be to achieve a
high dividend yield whilst seeking to maintain the
Initial Net Asset Value of the Ordinary Shares.
Dividends on the Ordinary Shares will in future be
paid quarterly, with the first interim dividend
following the introduction of the new investment
policy expected to be paid in August 1999. The Company
will also aim to achieve a pre-determined level of
capital return on a new class of Zero Dividend
Preference Shares;
- the adoption of a new investment policy of investing
predominantly in geared ordinary shares and income
shares of split capital investment trusts;
- a change of name from CU Environmental Trust PLC to
The Quarterly High Income Trust PLC in order to
reflect the proposed new investment and dividend
policy of the Company;
- a reorganisation of the share capital of the Company
by the issue of up to 82,495,000 million New Ordinary
Shares and the issue of such number of Zero Dividend
Preference Shares as represents 25 per cent. of the
Company's Initial Gross Assets. In addition, it is
anticipated that 20 per cent. of the Company's Initial
Gross Assets will be represented by medium term bank
debt;
- a placing of new and existing Ordinary Shares at a
price per share equal to the Formula Asset Value per
share on the Calculation Date. Ordinary Shareholders
may elect to sell some or all of their Ordinary Shares
in the Placing through the Share Sale Facility. The
Proposals will not proceed and no New Ordinary Shares
will be issued until the demand by Ordinary
Shareholders to sell their Ordinary Shares has been
satisfied;
- a placing of new Zero Dividend Preference Shares at
100p per share;
- a Warrant Offer by Warburg Dillon Read for all of the
outstanding Warrants at 27.5p per Warrant. Any
Warrants acquired by Warburg Dillon Read under the
Warrant Offer will then be sold to the Company for the
same consideration and cancelled; and
- the amendment of the Articles of Association.
The expected timetable of the Proposals is:
1999
3.00 p.m. on 23 April Latest time and date for receipt
of Sale Forms relating to the sale of
Ordinary Shares through the Share Sale
Facility and Warrants through the
Warrant Offer
close of business
on 23 April Calculation Date for the Formula
Asset Value
10.00 a.m. on 26 April First Extraordinary General
Meeting
12 noon on 26 April Closing of Placing
27 April Results of Placing and Warrant Offer
announced
30 April Despatch of cheques to (or creation of
assured payment obligations in favour
of) Ordinary Shareholders and
Warrantholders selling Ordinary Shares
and Warrants through the Share Sale
Facility or the Warrant Offer, as the
case may be
30 April Admission to the Official List of the
New Ordinary Shares and the Zero
Dividend Preference Shares and the
Proposals becoming unconditional
30 April Ordinary Shares and Zero Dividend
Preference Shares issued or transferred
in uncertificated form credited to the
stock accounts in CREST of the persons
entitled thereto
close of business on Latest time and date in 1999 for exercise of
30 April Warrants
5 May Despatch of share certificates in
respect of
New Ordinary Shares and Zero Dividend
Preference Shares issued or transferred
in certificated form
10.00 a.m. on 10 May Second Extraordinary General Meeting
Full details of the Proposals will be contained in
documents which will be despatched to Shareholders and
Warrantholders today.
UBS AG, acting through its division Warburg Dillon Read,
and Dresdner Kleinwort Benson, which are regulated in the
United Kingdom by The Securities and Futures Authority
Limited, are acting for CU Environmental Trust PLC and no
other person in connection with the matters described in
this announcement and will not be responsible to anyone
other than CU Environmental Trust PLC for providing the
protections afforded to customers of Warburg Dillon Read or
Dresdner Kleinwort Benson, as the case may be, nor for
giving advice in relation to such matters.
Enquiries:
Warburg Dillon Read John Korwin-Szymanowski/Alex Bance
0171 567 8000
CUIM David Keen
0171 632 5005
Dresdner Kleinwort Benson Andrew Zychowski
0171 623 8000
BACKGROUND TO AND REASONS FOR THE PROPOSALS
The Company was launched in March 1992 with the principal
objective of providing Shareholders with long term capital
growth through investment in companies which were, or were
expected to become, major beneficiaries of environmental
protection expenditure. The Company's current investment
policy is to invest in companies involved in the
environmental sector. The intention has been that the
Company's portfolio should have a strong international
spread and an emphasis towards smaller companies which, in
the main, have historically offered greater opportunities
for capital appreciation.
Since launch in 1992 to 22 March 1999, the undiluted net
asset value of the Company has risen by 36.8 per cent. In
addition, the Company's performance compares very
favourably with its benchmark index, the Cazenove Rozenberg
Global Smaller Companies Index which was launched in 1994.
Between 1 January 1995 and 22 March 1999, the Company's
undiluted net asset value rose by 19.1 per cent. compared
to a rise of 9.2 per cent. in the index over the
corresponding period. Nevertheless, these investment
returns are disappointing compared to stockmarkets in
general, principally due to the poor performance in more
recent times of smaller companies worldwide. The Company's
share price and unaudited diluted net asset value per share
were 115p and 130.7p respectively, as at 22 March 1999,
representing a share price discount to net asset value of
12.0 per cent. The Company's shares have on the whole
tended to trade at a wide discount to their net asset
value, with the average discount over the year to date
being 14.4 per cent.
As Shareholders and Warrantholders are aware, it was
intended to propose an ordinary resolution at the annual
general meeting in 1999 that the Company should continue in
existence as an investment trust for a further year.
The Directors have been reviewing the future of the
Company in the light of the continuing poor performance of
worldwide smaller companies, the discount to net asset
value at which the Ordinary Shares have been trading and
the continuation resolution to be proposed at the 1999
annual general meeting. As part of this review, the
Directors have consulted with Shareholders holding some
74.5 per cent. of the ordinary share capital. As a result,
the Board has concluded that proposals which enable
Shareholders to realise their investment for cash at close
to net asset value would be in the best interests of
Shareholders as a whole.
The Proposals described below will, if they become
unconditional, allow Shareholders to realise their
investment for a cash value marginally greater than they
would have received under a winding up of the Company (for
example, a termination payment will not be payable to the
Manager and costs of appointing a liquidator will be
avoided) and will further enable such cash to be made
available to Shareholders at least as quickly as under a
winding up. In addition, under the Proposals, Shareholders
can decide to maintain their investment, albeit in a
company with a radically different and higher risk
investment policy.
In anticipation of the implementation of the Proposals
(and, if the Proposals were not to become unconditional,
the proposed winding up of the Company) the Board has
instructed the Manager to commence a structured realisation
of the less liquid investments of the Company. As at 22
March 1999, the Company held approximately 99 per cent. of
its assets in cash or readily realisable assets or fixed
interest securities.
As part of the Proposals, Warrantholders are also being
offered the opportunity to sell their Warrants at 27.5p per
Warrant. This represents an uplift of 5.8 per cent. in
value when compared to the closing middle market price of
26p for a Warrant on 24 March 1999.
THE PROPOSALS
Change of investment policy
---------------------------
The Company's new investment objective will be to provide a
high dividend yield whilst seeking to maintain the Initial
Net Asset Value of the Ordinary Shares. The Company will
also aim to achieve a pre-determined level of capital
return on the new class of Zero Dividend Preference Shares.
The investment policy of the Company will initially be to
invest predominantly in geared ordinary and income shares
of split capital investment trusts with the balance of the
portfolio being invested in fixed income securities so as
to achieve a net portfolio yield of approximately 6.8 per
cent. The Manager will seek to achieve a spread in
investment exposure to any particular asset class or
investment style by paying particular attention to the
underlying portfolios of the investment trusts in which it
invests. This diversification will relate to the underlying
exposure to geographical areas, industry sectors, value and
growth investment styles and market capitalisations. Up to
20 per cent. of the Company's portfolio may be invested in
the shares of investment trusts whose investment policy is
predominantly to invest in other investment trusts. The
Manager will also seek to diversify the Company's exposure
to different investment management groups.
Given the proposed level of gearing within the Company's
own capital structure, the Manager will have particular
regard to the financial gearing of the companies in which
it invests. It will assess the capital prospects of the
underlying portfolios and the rate of capital growth
required to maintain the asset value attributable to the
relevant geared ordinary or income share (its "hurdle
rate").
In respect of individual stock selection and the assessment
of the likelihood of achieving the applicable hurdle rate,
the Manager will take into account historic performance
records and the prospects for capital and income growth of
each geared ordinary and income share. In so doing, the
Manager will examine such measures as underlying portfolio
yield and levels of exposure to particular areas of the
market. The level of income reserves of individual
investment trusts will also form an important element of
this analysis.
In due course, the Manager may consider investing an
element of the portfolio in other listed equities.
Following the implementation of the Proposals, the Company
intends to purchase a material part of its initial
portfolio of investment trust geared ordinary and income
shares from CGU PPT Monthly Income Plus, a unit trust
managed by the Manager. The transfer will be made through
the market at middle market prices, thus saving both the
buyer and the seller the normal bid/offer spread. The
transactions will also be effected at reduced brokerage
charges.
The reorganisation of the Company will enable investors to
gain exposure to the experienced and successful income fund
management team of CUIM.
Change of name
--------------
In order to reflect the proposed new investment and
dividend policy of the Company, it is proposed that the
Company's name should be changed to The Quarterly High
Income Trust PLC.
Capital Reorganisation
----------------------
Following implementation of the Proposals, the issued share
capital will consist of Ordinary Shares and Zero Dividend
Preference Shares in proportions such that the Zero
Dividend Preference Shares will represent approximately 25
per cent. of the Initial Gross Assets of the Company
immediately following implementation of the Proposals. The
Ordinary Shares will represent approximately 55 per cent.
of such gross assets and it is intended that approximately
20 per cent. of gross assets be represented by medium term
bank debt. The Company will have an extended life of a
further eight years to 30 April 2007.
Ordinary Shares
---------------
The Ordinary Shares are intended to offer a high dividend
yield whilst at least maintaining their Initial Net Asset
Value. Holders of Ordinary Shares will be entitled to the
net assets of the Company on any winding up after the
entitlements of creditors and the holders of the Zero
Dividend Preference Shares have been met.
The Company's policy will be to distribute substantially
all its net revenue (after taxation) in the form of
dividends to the holders of the Ordinary Shares. It is
expected that dividends will be paid each quarter, in
August, November, February and May of each year, with the
first dividend payable in respect of existing Ordinary
Shares and the New Ordinary Shares being paid in August
1999 in respect of the period to 30 June 1999.
In order to avoid delay in the payment of dividends the
Company will, other than in the first year, pay four
interim dividends in respect of each financial year. It is
intended that the first three interim dividends will be of
an equal amount, and that the fourth will represent the
balance of the total income to be distributed in the
relevant twelve month period.
Based on the historic yields of the shares which are
expected to form part of the Company's portfolio, the
Directors expect, in the absence of unforeseen
circumstances, that, in respect of the period from
implementation of the Proposals to 31 December 1999, the
Company will pay a total net dividend of 8.2p per Ordinary
Share. This does not include the dividend of 0.5p (net) per
Ordinary Share payable to existing Shareholders on 30 April
1999 in respect of the year ended 31 December 1998. The
issue price of the New Ordinary Shares under the Placing
will not be known until after the Calculation Date when the
Formula Asset Value will have been worked out. However, if
the Formula Asset Value had been calculated on 22 March
1999, (the latest practicable date prior to the
publication of this document), it would have been 129.31p
per Ordinary Share and, on that basis, the initial net
dividend yield (on an annualised basis) would have been 9.5
per cent.
From time to time the Directors may retain income in the
revenue reserves of the Company with a view to producing a
consistent level of dividends for Ordinary Shareholders.
Zero Dividend Preference Shares
--------------------------------
The Zero Dividend Preference Shares to be issued by the
Company in the Placing are designed to provide a pre-
determined level of capital return ranking behind any bank
borrowings but in priority to the Ordinary Shares. Their
holders will have no entitlement to income and the whole of
their return will therefore take the form of capital. The
holders of Zero Dividend Preference Shares will have an
initial capital entitlement of 100p per share growing to
181.7p on the Winding-Up Date, equivalent to capital growth
at an annual rate of 7.75 per cent. compound per annum
based on their Placing Price.
Zero Dividend Preference Shares will not normally carry
voting rights at general meetings of the Company. Their
holders will, however, have a right to vote in certain
limited circumstances and their separate approval as a
class will normally also be required for certain proposals
which would be likely to affect their position.
The Share Sale Facility
------------------------
On the terms and subject to the conditions set out in the
Circular and the relevant Sale Form, Shareholders may
tender their Ordinary Shares for sale through the Share
Sale Facility at a price equal to the Formula Asset Value
on the Calculation Date. The Share Sale Facility is not
being underwritten with respect to any of the Shares.
Warburg Dillon Read has agreed to use its reasonable
endeavours to procure placees to take up Ordinary Shares
offered for sale through the Share Sale Facility but will
not have any liability if such placees are not procured.
The CUET FAV will be calculated as at the Calculation Date,
in accordance with the formula set out in the Circular.
Accordingly, the sale price per Ordinary Share sold through
the Share Sale Facility can only be finally determined
after the Calculation Date.
In offering to sell Ordinary Shares through the Share Sale
Facility, Shareholders warrant that the Ordinary Shares to
be placed will be sold by them free from all liens,
charges, equitable interests and encumbrances and together
with all rights now or subsequently attached to such
shares, including the right to receive all dividends and
other distributions declared, paid or made in respect of
them on or after 30 April 1999, other than the interim
dividend of 0.5p (net) per Ordinary Share to be paid in
respect of the financial year ended 31 December 1998 on 30
April 1999 to Shareholders on the register at the close of
business on 12 April 1999.
Shareholders selling Ordinary Shares through the Share Sale
Facility will sell free of commissions and PTM levy, but
will be liable to pay the stamp duty or stamp duty reserve
tax which would otherwise have been payable by the
purchasers of their shares. Accordingly an amount in
respect of such stamp duty (50p for every #100 or part of
#100 of the consideration) or stamp duty reserve tax (0.5
per cent. of the consideration) will be deducted from the
sale proceeds.
Warrant Offer
-------------
On the terms and subject to the conditions set out in the
Circular and the relevant Sale Form, Warburg Dillon Read
offers, as principal, to acquire all of the Warrants on the
following basis:
For each Warrant 27.5p in cash
The Warrants to be acquired by Warburg Dillon Read pursuant
to the Warrant Offer will be acquired free from all liens,
commissions, charges, commissions, equitable interests and
encumbrances and together with all rights now or
subsequently attached to such Warrants. Any Warrants
acquired by Warburg Dillon Read under the Warrant Offer
will be immediately repurchased by the Company for the
same consideration and cancelled.
FINANCIAL EFFECTS OF SELLING ORDINARY SHARES THROUGH THE
SHARE SALE FACILITY AND ACCEPTING THE WARRANT OFFER
The Share Sale Facility
-----------------------
The price receivable for each Ordinary Share placed can
only be finally determined on the Calculation Date. By way
of illustration only, had the Calculation Date fallen on 22
March 1999 (the latest practicable date prior to the
publication of this document), based on the Company's
calculation of the CUET FAV on that date and after
deducting an amount in respect of stamp duty or stamp duty
reserve tax as appropriate, a participating Shareholder
selling 1,000 Ordinary Shares through the Share Sale
Facility would have been entitled to receive #1,287 in
cash.
Set out below is an illustration of the effects for
Shareholders who wish to sell their holding(s) of Ordinary
Shares, based on a holder wishing to sell 1,000 Ordinary
Shares and assuming a Calculation Date of 22 March 1999:
Value of 1,000 Ordinary Shares (1)
#1,150
Formula Asset Value of 1,000 Ordinary Shares
(less an amount in respect of stamp duty or stamp
duty reserve tax) #1,287
Increase in value #137
This represents an increase of 11.9%
The Warrant Offer
-----------------
Set out below is an illustration of the effects for
Warrantholders who wish to sell their Warrants by accepting
the Warrant Offer based on a holder wishing to sell 1,000
Warrants:
Value of 1,000 Warrants (2) #260
Cash Consideration #275
Increase in value #15
This represents an increase of 5.8%
Notes
-------
(1) The value of an Ordinary Share has been taken to be
115p, being its middle market price (as derived from
the London Stock Exchange Daily Official List) on 24
March 1999 (the latest practicable date prior to the
posting of the Circular)
(2) The value of a Warrant has been taken to be 26p, being
its middle market price (as derived from the London
Stock Exchange Daily Official List) on 24 March 1999
(the latest practicable date prior to the posting of
this document)
(3) No account has been taken of any liability to
taxation, other than stamp duty and stamp duty reserve
tax to the extent mentioned
Amendment of the Articles of Association
----------------------------------------
It is proposed that the Company should amend the Articles
of Association (i) to reflect its new capital structure,
(ii) to reflect the changes in the relevant listing rules
of the London Stock Exchange which have taken place since
the Company's formation in 1992, and (iii) to reflect the
provisions relating to investment companies in Section 266
of the Companies Act 1985 and to make changes to the
article relating to reserves.
Amendment to the Management Agreement
-------------------------------------
Under the Management Agreement, the Manager has agreed to
manage the investments and other assets of the Company, to
act as secretary of the Company and to administer the
business and affairs of the Company.
The Management Agreement originally provided that the
Company would pay a quarterly fee of 0.1875 per cent. (0.75
per cent. per annum) (plus VAT) of gross assets (including
long term borrowings) less current liabilities.
With effect from 1 January 1997 the Manager agreed to limit
its management fee to an annual rate of 0.75 per cent. per
annum (plus VAT) on the first #20 million of gross assets
(including long term borrowings) less current liabilities
of the Company and 0.50 per cent. per annum (plus VAT) on
the remainder at each quarter end. By a supplementary
agreement expected to be dated 26 March 1999 the Management
Agreement is proposed to be amended to provide for the
management fee of 0.75 per cent. per annum (plus VAT) of
gross assets including long term borrowings less current
liabilities to be reinstated with effect from the date on
which the Proposals become unconditional.
Save as described above, as the Proposals involve a
continuation of the Company, there will be no additional
costs or expenses relating to the Management Agreement.
The existing secretarial arrangements between the Company
and the Manager remain unaltered. The secretarial fee
amounted to #43,000 (plus VAT) for the year ended 31
December 1998 and is subject to indexation.
Dividend
--------
It is proposed that a dividend of 0.5p (net) per Ordinary
Share be paid on 30 April 1999 to existing Ordinary
Shareholders on the register at the close of business on
12 April 1999. The dividend will be paid as an interim
dividend in lieu of a final dividend in respect of the year
ended 31 December 1998. It is necessary for the dividend to
be paid in order to enable the Company to retain its status
as an investment trust under Section 842 of the Income and
Corporation Taxes Act 1988.
Conditions
----------
The Proposals are conditional upon:
(a) the passing at the First Extraordinary General
Meeting (or at any adjournment thereof) of the
resolution contained in the notice of meeting set out
at the end of this document;
(b) Admission of the Zero Dividend Preference Shares and
the New Ordinary Shares to the Official List by no
later than 30 April 1999;
(c) the issued share capital of the Company immediately
following the Placing not being less than 20 million
Ordinary Shares and the corresponding number of Zero
Dividend Preference Shares;
(d) sufficient Ordinary Shares being taken up under the
Placing to enable all Ordinary Shares offered by
Shareholders under the Placing (via the Share Sale
Facility) to be sold;
(e) the Company having before Admission obtained
appropriate bank facilities on terms satisfactory to
the Board; and
(f) the Placing Agreement otherwise becoming unconditional
in all respects and not being terminated before
Admission.
THE POSITION OF THE COMPANY IF THE PROPOSALS DO NOT PROCEED
The Proposals are conditional on the matters summarised
above under the heading Conditions. If the Proposals do not
become unconditional, the Directors believe that the most
appropriate course would be to wind up the Company. In
order to avoid delay, a Second Extraordinary General
Meeting is being convened for 10 May 1999 at which a
special resolution will be proposed to wind-up the Company.
This resolution will be conditional on the Proposals not
having become unconditional by 7 May 1999 and, accordingly,
if the Proposals become unconditional in all respects the
winding-up resolution will be redundant.
Shareholders
------------
If the Proposals do not proceed, the liquidators will begin
the process of settling the Company's liabilities and
returning assets to Shareholders as soon as practicable
after the special resolution to liquidate the Company has
been passed at the Second Extraordinary General Meeting on
10 May 1999. Distributions to Shareholders will be made in
accordance with the Articles with the first distribution of
the majority of assets expected to be made one month later.
Warrantholders
--------------
If the Proposals do not become unconditional and the
winding-up resolution is passed on 10 May 1999, the
entitlement of Warrantholders will be as follows. If in
such winding-up there is a surplus available for
distribution amongst Shareholders (including for this
purpose Ordinary Shares arising on exercise of all the
subscription rights) which exceeds, in respect of each
Ordinary Share, an amount equal to the subscription price
of the Warrants (assuming all subscription rights are
exercised immediately before the date of the winding up
resolution) each holder of a Warrant shall be entitled to
receive out of the assets available in the liquidation pari
passu with the holders of Ordinary Shares such sum as he
would have received had he been a holder of the Ordinary
Shares to which he would have been entitled by virtue of
such subscription after deducting an amount equal to the
subscription price per Ordinary Share.
The subscription price would be subject to adjustment if
the Company is wound up. According to the relevant formula
set out in the deed poll of the Company dated 24 March 1992
constituting the Warrants if the winding-up resolution is
passed Warrantholders will receive a minimum of 24.35p per
Warrant held at that date.
If the Company is wound-up, Shareholders and Warrantholders
who receive distributions under the winding-up will be
treated as having made part disposals of their Ordinary
Shares or Warrants for the purposes of capital gains
taxation, with a subsequent disposal taking place at the
time of the final distribution.
EXTRAORDINARY GENERAL MEETINGS
A special resolution approving the Proposals is set out in
the notice of the First Extraordinary General Meeting to be
held at 10.00 am on 26 April 1999. Implementation of the
Proposals is conditional upon and requires the passing of
this resolution which will, if passed:
(a) approve the change of the Company's name from CU
Environmental Trust PLC to The Quarterly High Income
Trust PLC;
(b) approve the change in the Company's investment policy;
(c) increase the capital of the Company by the creation of
79,000,000 Ordinary Shares and 100,000,000 Zero
Dividend Preference Shares;
(d) grant the Directors authority under Section 80 of the
Companies Act 1985 to allot relevant securities with
an aggregate nominal value of up to #45,623,750 under
the Placing and, after the Placing, with a nominal
value of up to an amount equal to 10 per cent. of the
enlarged issued share capital of the Company
immediately following implementation of the Proposals.
This authority will expire at the Company's annual
general meeting in 2000;
(e) authorise the Directors to allot securities other than
in accordance with the pre-emption provisions of
section 89 of the Companies Act 1985. This authority
will be limited to the allotment of shares under the
Placing and, otherwise than under the Placing, with a
nominal value of up to ten per cent of the issued
share capital of the Company immediately following
implementation of the Proposals; and
(f) amend the Articles of Association.
If the Proposals do not become unconditional by 7 May 1999,
it is proposed that the Company should be wound up and a
special resolution to this effect is set out in the notice
of the Second Extraordinary General Meeting of the
Company. The liquidation resolution is a special
resolution and will, if passed, approve the members'
voluntary liquidation of the Company and approve the
appointment of Stephen Treharne and Jeremy Simon Spratt of
KPMG as joint liquidators, the retention of the books and
records by the Manager and the basis for the joint
liquidators' remuneration. In addition, an extraordinary
resolution is proposed which will, if passed, authorise the
joint liquidators to pay all creditors in full and to make
compromises with creditors and debtors, and, in accordance
with the Articles, divide the assets of the Company among
Shareholders and Warrantholders.
Shareholder intentions
Shareholders holding 74.5 per cent, of the issued share
capital of the Company (including members of the CGU group
which hold 45.7 per cent.) have confirmed to the Company
that it is their intention to vote in favour of the
resolutions to be proposed at the Extraordinary General
Meetings.
APPENDIX
The following definitions apply throughout this
announcement unless the context requires otherwise:
Admission the admission of the New Ordinary
Shares and the Zero Dividend Preference
Shares to the Official List
Articles the Articles of Association of the Company
Board or
Directors the board of directors of the Company
Calculation Date the date on which the Formula Asset
Value will be calculated, which is
expected to be the close of business on
23 April 1999
Company or CUET CU Environmental Trust PLC
Dresdner Kleinwort
Benson Kleinwort Benson Securities Limited
Effective Date the date on which the Proposals become
effective, which is expected to be
30 April 1999
Extraordinary the First Extraordinary General Meeting and
General Meetings the Second Extraordinary General Meeting.
First Extraordinary the Extraordinary General Meeting of the
General Meeting Company to approve the Proposal
which as been convened for 10.00 a.m.
on 26 April (or any adjournment thereof)
Formula Asset Value the formula asset value for each Ordinary
or CUET FAV Share to be calculated on the Calculation Date
Initial Gross Assets the gross assets of the Company
immediately following implementation of
the Proposals after making provision
for the costs of implementing the proposals
Initial Net Asset Value in respect of an Ordinary Share,
the net asset value of that Ordinary
Share immediately following
implementation of the Proposals
Listing Particulars the Listing Particulars issued by the
Company dated 26 March 1999
London Stock Exchange London Stock Exchange Limited
Manager or CUIM Commercial Union Investment Management Limited
Management Agreement the investment management and
secretarial agreement dated 24 March
1992 between the Company and the Manager
New Ordinary Shares up to 82,495,000 new Ordinary Shares to
be issued pursuant to the Placing
Official List the Official List of the London Stock Exchange
Ordinary Shareholders
or Shareholders holders of Ordinary Shares
Ordinary Shares ordinary shares of 25p each in the capital of the
Company
Placing the Placing by Warburg Dillon Read of
up to 100,000,000 Ordinary Shares
(including those to be sold through
the Share Sale Facility) and the
corresponding number of Zero Dividend
Preference Shares
Placing Agreement the agreement dated 26 March 1999
between the Company, the Manager and
Warburg Dillon Read relating to the
Placing, further details of which are
set out in Part V of the Listing
Particulars
Placing Price in the case of an Ordinary Share, an
amount per share equal to the Formula
Asset Value of an Ordinary Share on the
Calculation Date and, in the case of a
Zero Dividend Preference Share, 100p
per share
Proposals the Board's proposals for the
reorganisation of the Company as
described in this document including
the proposed change of name and
investment policy, the Placing
(including the Share Sale Facility) and
the Warrant Offer and the adoption of
new Articles of Association
Registrars Lloyds TSB Registrars
Sale Form(s) the form of acceptance and authority
relating to the Share Sale Facility
and/or the Warrant Offer, as the case
may be
Second Extraordinary the Extraordinary General Meeting of the
General Meeting Company to approve a winding up of the
Company if the Proposals do not become
unconditional and which has been
convened for 10 May 1999 (or any
adjournment thereof)
Shares Ordinary Shares and/or Zero Dividend
Preference Shares, as the context may require
Share Sale Facility the facility under which Shareholders
may sell all or part of their holding
of Ordinary Shares through the Placing
on the terms and subject to the
conditions set out in this document
Warburg Dillon Read UBS AG, acting through its division
Warburg Dillon Read
Warrant Offer the offer by Warburg Dillon Read for
the purchase of Warrants on the terms
set out in this document
Warrants the existing warrants of the Company to
subscribe for one Ordinary Share at a
subscription price of #1.00 on the
terms and subject to the conditions set
out in the deed poll constituting the
warrants dated 24 March 1992
Warrantholder a holder of Warrants
Winding-Up Date 30 April 2007 on the basis of the
Proposals being implemented
Zero Dividend Preference
Shareholders holders of Zero Dividend Preference Shares
Zero Dividend Zero Dividend Preference Shares of 25p each in
Preference Shares the capital of the Company to be issued
pursuant to the Placing
END
MSCNFKDKAANNEFN
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