Voluntary winding-up and reconstruction
10 Novembre 2010 - 7:15PM
UK Regulatory
TIDMHFO
RNS Number : 9934V
Henderson Financial Opps Ltd
10 November 2010
Henderson Financial Opportunities Fund Limited
Proposals for the voluntary winding-up and reconstruction of the Company
10 November 2010
Introduction
The Board of the Company has today announced recommended Proposals for the
reconstruction and members' voluntary liquidation of the Company.
Under the Proposals, Shareholders will be able to elect to receive their
entitlement upon the winding-up of the Company either in cash or to roll over
some or all of their investment into Henderson Global Financials Fund, a
sub-fund of the Henderson OEIC.
The Proposals have been designed to provide Shareholders with a choice of
realising their investment or continuing it through a rollover into Henderson
Global Financials Fund.
Background to the Proposals
At the extraordinary general meeting held in September 2009, Shareholders
approved proposals, including a revised investment policy, which sought to
enable the Company to remain an attractive long term investment and, in due
course, to increase in size in order to improve liquidity in the Shares and also
to reduce the impact of fixed running costs on each Shareholder.
At the same time, the Board, recognising that Shareholders would benefit from
the comfort of knowing that should these objectives not be achieved, they would
have the opportunity to vote on the future of the Company, committed to propose
an ordinary resolution at the annual general meeting of the Company to be held
in 2011 that the Company continue as an investment company. If that resolution
were not passed, then proposals to wind up or otherwise reconstruct the Company
would be put to Shareholders within three months.
In the recent half-year report we noted that, given the current uncertain
outlook for the western economies, and thus for the markets, and some of the
fears that still surround some banks and other financial institutions, it seemed
increasingly unlikely that a fund-raising for the Company would be achievable in
the short term.
Following subsequent consultation with Shareholders representing 66.5 per cent.
of the Shares in issue, the Board has now determined that it would be in the
best interests of Shareholders as a whole if proposals to wind up the Company
were put to Shareholders without the need to hold a continuation vote
(notwithstanding the commitment of the Board to propose an ordinary resolution
at the annual general meeting of the Company to be held in 2011 that the Company
continue as an investment company and Article 166 of the Articles), and further
should be put to Shareholders ahead of the annual general meeting to be held in
2011.
On a winding-up, Shareholders' entitlements will be determined by reference to
the Articles and the Law, under which the Liquidators are obliged to realise the
Company's assets and apply them in satisfaction of the Company's debts and
liabilities pari passu. Any surplus may then be distributed to Shareholders
according to their respective rights and interests in the Company.
Third Interim Dividend and Fourth Interim Dividend
On 13 September 2010, the Board declared the Third Interim Dividend payable on
22 October 2010 to Shareholders on the register as at 24 September 2010. Prior
to the Company entering into liquidation, the Directors will declare, in
accordance with the Articles and the Law, the Fourth Interim Dividend to be paid
to Shareholders. This dividend will be based on the Directors' best estimate of
the revenue profits (including accumulated revenue reserves) available for
distribution prior to liquidation.
The Shares will be declared "ex" the Fourth Interim Dividend entitlement on 17
November 2010, the record date for the Fourth Interim Dividend will be 19
November 2010 and it will be paid on 9 December 2010, prior to the Second GM.
The Fourth Interim Dividend will represent substantially all of the Company's
revenue reserves as at the date of payment.
The Proposals
The Proposals involve the voluntary winding-up of the Company.
Under the Proposals the Company's voluntary winding-up shall commence on 13
December 2010. Shareholders will be able to elect:
(a) to roll over, in a tax-efficient manner, some or all of their investment
into shares in Henderson Global Financials Fund which is an existing sub-fund
within the Henderson OEIC, an open-ended investment company which aims to
achieve long-term capital growth by investing in financial services companies
both in the UK and internationally. In addition to ordinary shares, the
Henderson Global Financials Fund may invest in fixed interest securities,
preference shares, debt securities convertible into ordinary stock, money-market
instruments, deposits and any other permitted asset type deemed appropriate to
meet the investment objective (the "Rollover Option"); and/or
(b) to receive cash in the liquidation of the Company by realising some or all
of their investments (the "Cash Option").
The Scheme
Under the Scheme, Shareholders will be entitled to receive the Scheme Asset
Value per Share in respect of their Options. The Scheme Asset Value per Share
for these purposes is an amount equal to the amount of cash or assets which
would be available to the Company (less the value of the Liquidation Fund) to
pay the capital entitlement of each Share divided by the number of Shares in
issue.
The net assets of the Company as at 8 November 2010 were approximately GBP15.7
million. The amount of these net assets takes into account the anticipated costs
of liquidating the Company (estimated at GBP150,000) as well as the retention
anticipated to be required by the Liquidators (to meet contingent and unknown
liabilities) of GBP100,000.
Based on the net assets of the Company as set out above and assuming that: there
is no change in those net assets between now and the Effective Date; that such
net assets were represented solely by cash; that the level of revenue reserves
does not change between now and the Effective Date; and that shares in the
Rollover Fund were issued at 49.79p (being their issue price as at close of
business on 8 November 2010), this would give rise to the following payment per
Share in cash or shares in the Rollover Fund under the Scheme:
For each Share: 41.18p in cash or 0.827 shares in the Rollover Fund
Due to the short interval between the Calculation Date 9 December 2010 and the
Transfer Date, 14 December 2010, Shareholders who elect for the Rollover Option
will be exposed to any movement over that interval in the market value of the
assets to be transferred as part of the Rollover Pool. These assets are expected
to be principally cash and short-dated government securities.
Shareholders should note that following the initial distribution of either cash
or shares, any further payments will be paid by the Liquidators in cash only to
all Shareholders regardless of the Option they choose for the initial
distribution. Any such further payments will be paid to Shareholders only by the
Liquidators following fulfilment of any outstanding liabilities of the Company.
There will not be an initial charge to roll over into the Henderson Global
Financials Fund for Shareholders who elect for the Rollover Option.
Failure to make an Election
Shareholders (other than Overseas Holders) who make no valid election will be
deemed to have elected for the Rollover Option in respect of their entire
holding of Shares. Overseas Holders will be deemed to have elected for the Cash
Option.
Further details of the Options are described under the section entitled "The
Options" below.
Advantages of the Proposals
The Directors believe that the Proposals are in the best interests of
Shareholders because:
? shares in the Rollover Fund are being issued on terms which are more
favourable than the terms on which Shareholders could generally purchase such
shares due to the Rollover Manager's agreement to waive the initial charge of
5.25 per cent. of the gross investment in the Class A Income Shares. In
addition, the Rollover Manager has agreed to waive any requirements in respect
of minimum investment levels;
? the Rollover Fund pursues an investment policy that is similar to that of
the Company which is to achieve long-term capital growth by investing in
financial services companies both in the UK and internationally, albeit that the
yield is lower. In addition to ordinary shares, the Henderson Global Financials
Fund also may invest in fixed-interest securities, preference shares, debt
securities convertible into ordinary stock, money-market instruments, deposits
and any other permitted asset type deemed appropriate to meet the investment
objective;
? they should allow Shareholders to elect to receive shares in the Rollover
Fund, thereby allowing Shareholders to retain an investment exposure without
triggering a disposal for capital gains purposes until disposing of such shares
at a time of their choosing; and
? Shareholders who elect for the Cash Option will be able to receive cash in
the liquidation of the Company at close to the SAY per Share.
The choice between the Options available under the Proposals will be a matter
for each Shareholder to decide and will be influenced by their individual
circumstances and investment objectives.
The Options
Under the Proposals, Shareholders have the choice of electing for one or both of
the Options in respect of their Shares. Information on each of the Options is
set out below.
The Rollover Option
Henderson Global Financials Fund aims to achieve long-term capital growth by
investing in financial services companies both in the UK and internationally. In
addition to ordinary shares, the Henderson Global Financials Fund may also
invest in fixed interest securities, preference shares, debt securities
convertible into ordinary stock, money-market instruments, deposits and any
other permitted asset type deemed appropriate to meet the investment objective.
Henderson Global Financials Fund is managed by Henderson Investment Funds
Limited who is the Authorised Corporate Director.
As at 31 October 2010, Henderson Global Financials Fund had assets of
approximately GBP88.3 million and the dividend yield was 0.08 per cent. Source:
Morningstar
No initial charges will be levied on the issue of the Henderson Global Financial
Fund Shares pursuant to the Scheme.
The Rollover Manager has also agreed to waive the normal minimum investment
requirement for Shareholders who wish to elect for the Rollover Option.
The Cash Option
Shareholders who elect for the Cash Option will receive a cheque in respect of
their entitlement.
Liquidation Fund
Under the Proposals, the Company will be wound up by means of a members'
voluntary liquidation. The Liquidators will set aside sufficient assets in the
Liquidation Fund of the Company to meet its liabilities. If any further cash is
received by the Company after the Effective Date, it will form part of the
Liquidation Fund.
The Liquidators also will provide in the Liquidation Fund for a Retention which
they consider sufficient to meet any contingent and unknown liabilities of the
Company. The Retention is currently expected to amount to approximately
GBP100,000. To the extent that all of this Retention is not required to meet
such liabilities, the balance will be distributed in cash only by the
Liquidators to those Shareholders holding Shares on the Record Date.
In accordance with section 397 of the Law, the Liquidators have a statutory duty
to realise the Company's assets and discharge its liabilities before
distributing surplus assets to Shareholders.
Final meeting prior to dissolution
As soon as the Company's affairs are fully wound up, the Liquidators will
prepare an account of the winding-up in accordance with section 400(1)(a) of the
Law and call a further general meeting of the Company at which the account will
be presented and an explanation given, in accordance with section 400(1)(b) of
the Law. Immediately after such meeting the Liquidators will give notice to the
Registrar of Companies in Guernsey that such meeting has been held and the date
on which it was held. The Company then will be dissolved on the expiry of three
months beginning from the date of delivery of such notice.
Details of the Proposals
Shareholders' approval is required under the provisions of the Law in order to
implement the Proposals. As part of the reconstruction and winding-up of the
Company it is necessary, for technical reasons, to reorganise its share capital.
The Scheme is conditional on the passing of the Resolutions at the Meetings
which require (whether on a poll or by a show of hands) approval by a majority
of not less than 75 per cent. of those attending and voting at each Meeting.
At the First GM, a special resolution will be proposed to:
(i) re-classify the rights attaching to the Shares such that those
Shareholders who elect, or are deemed to elect, to roll over into Henderson
Global Financials Fund will hold shares with "A" rights giving them the right to
receive Henderson Global Financials Fund Shares on a winding-up of the Company
and those Shareholders who elect, or are deemed to elect, to receive cash will
hold Shares with "B" rights giving them the right to receive cash on the
winding-up of the Company;
(ii) authorise the implementation of the Scheme by the Liquidators including
an application to delist the Company's Shares from the Official List of the UKLA
and the Official List of the CISX; and
(iii) amend the Articles for the purposes of its implementation.
Shareholders may attend and vote, or appoint a proxy to vote on their behalf, at
the First GM.
Conditional upon the resolutions proposed at the First General Meeting being
passed and conditional upon the amendment to the Official List of the UKLA and
the Official List of the CISX to reflect the reclassification of the Shares, a
special resolution will be proposed at the Second GM to wind the Company up
voluntarily, to appoint the Liquidators, to fix the remuneration of the
Liquidators, to confer certain powers on the Liquidators and to instruct the
Secretary to hold the books of the Company to the Liquidators' order.
Shareholders may attend and vote at the Second GM.
In order to implement the Scheme, the assets of the Company will be divided into
three Pools on the Calculation Date, being the Cash Pool, the Rollover Pool and
the Liquidation Fund. The assets of the Company will comprise cash and
securities. The division of the assets of the Company will be on the basis of
the value attributable to Elections for the Rollover Option and the value
attributable to Elections for the Cash Option as a proportion of the total value
attributable to Elections. In order to make the division between the three
Pools, the Manager, in consultation with the Liquidators, will calculate for the
purposes of determining SAY the aggregate value of the Company in accordance
with the Scheme as at 5.00 p.m. on the Calculation Date.
On the Effective Date, or as soon as practicable thereafter, the Liquidators
will distribute the value of the Cash Pool to Shareholders with "B" rights. On
the Transfer Date the Liquidators will transfer the assets in the Rollover Pool
to Henderson Global Financials Fund in exchange for Henderson Global Financials
Fund Shares which will be issued to the Shareholders with "A" rights, pro rata,
on the basis of the value of the Rollover Pool as at the Calculation Date and
the Henderson Global Financials Fund Share Issue Price being the price of such
shares as at noon on the Transfer Date.
The transfer of the Rollover Pool will be carried out in accordance with the
terms of the Transfer Agreement.
Cancellation of the listing of the Reclassified Shares on the Official Lists is
expected to take place by 9 November 2011.
Guernsey regulatory notification
The Company has been declared to be an authorised closed-ended investment scheme
by the GFSC pursuant to Section 8 of the POI Law and Rule 6.02 (pursuant to Rule
7.02) of the Rules made thereunder. Notification of the Proposals has been made
to the GFSC pursuant to Part 5 of the Rules.
Overseas Holders
Overseas Holders will not receive a Form of Election or the Simplified
Prospectus and will (unless the Directors determine otherwise) receive cash
directly from the Company in respect of their entire holding of Shares unless
they have satisfied the Directors that it is lawful for shares to be issued to
them under any relevant overseas laws and regulations.
Costs and expenses
The total costs in connection with the Proposals, including financial, legal and
tax advice, are estimated to be approximately GBP150,000 (inclusive of the
estimated Liquidator's costs but excluding the Retention to be made by the
Liquidators).
Of the costs referred to above, the Board, having consulted with its advisers,
has determined that all such costs will be charged to capital.
Conditions to the Proposals
The Scheme which provides for, and which will effect, the Rollover Option, is
conditional upon:
(i) the resolutions at the First GM and the Second GM being passed; and
(ii) the amendment to the Official List of the UKLA and the Official List of
the CISX to reflect the reclassification of the Shares.
If the Resolutions to be proposed at the Second GM are not passed, the Proposals
will not become effective and the Company will continue as a closed-ended
investment company.
Certain considerations relating to the Proposals
The implementation of, and an Election for one or more Options under, the
Proposals carry with them certain considerations for Shareholders as described
below:
? if Shareholders elect to roll over some or all of their entitlement into
the Rollover Fund the subsequent disposal by such Shareholders of shares in that
fund may incur redemption charges and will constitute a disposal for the
purposes of crystallising a liability to any tax on capital gains;
? the Company makes quarterly income distributions whereas the Rollover Fund
distributes income biannually, which may be a material consideration for some
Shareholders;
? whilst the Rollover Fund invests in the same sector as the Company, it
should be noted that the yield of the Fund is lower than that of the Company,
reflecting a greater emphasis on capital growth;
? there can be no assurance that the Rollover Fund will not raise its annual
management charge and/or other fees in the future; or that there will not be any
changes to key personnel within the Rollover Manager; or that the investment
objective and policy of the Rollover Fund will not change; or that the Rollover
Manager will not be acquired by another fund management firm.
Money laundering
The prevailing money laundering legislation requires that the identity of
investors in Henderson Global Financials Fund, including Shareholders who have
elected for the Rollover Option, be verified; otherwise redemption proceeds
cannot be paid if and when Henderson Global Financials Fund Shares are redeemed.
Therefore, Shareholders to whom Henderson Global Financials Fund Shares are
issued pursuant to the Scheme will, when relevant, be required to complete the
necessary money laundering forms in due course. Shareholders to whom Henderson
Global Financials Fund Shares are issued will not be able to receive redemption
proceeds in connection with any subsequent redemption until the necessary
identity verification under anti-money laundering procedures has been complied
with.
ISAs
Notwithstanding that the shares in the Rollover Fund should generally qualify
for holding in a ISA, Shareholders who hold their Shares within ISAs should,
before making any Election for the Rollover Option or Cash Option, consult their
ISA plan administrator as regards their own position.
Recommendation
The Board of the Company, that has received financial advice from Numis
Securities Limited in the context of the Proposals, considers that the Proposals
are in the best interests of Shareholders as a whole and recommends Shareholders
to vote in favour of all of the Resolutions. In providing its advice, Numis
Securities Limited has placed reliance on the Directors' commercial assessment
of the Proposals.
The Directors intend to vote in favour of all the Resolutions in respect of
their beneficial holdings representing, in aggregate, 101,000 Shares
(representing 0.265 per cent. of the Shares in issue) as at 8 November 2010.
Expected timetable
+---------------+--------+-----------------------------------------+
| 2010 | | |
+---------------+--------+-----------------------------------------+
| 10 November | | Despatch of the Scheme circular |
+---------------+--------+-----------------------------------------+
| 19 November | | Record Date for the Fourth Interim |
| | | Dividend |
+---------------+--------+-----------------------------------------+
| 1 December | 1.00 | Latest time and date for receipt of the |
| | p.m. | Forms of Election and |
| | | TTE Instructions from Shareholders |
+---------------+--------+-----------------------------------------+
| 1 December | 5.00 | Record Date for participation in the |
| | p.m. | Proposals and Register |
| | | closes |
+---------------+--------+-----------------------------------------+
| 2 December | 11.00 | Latest time and date for receipt of |
| | a.m. | Forms of Proxy for the First |
| | | GM |
+---------------+--------+-----------------------------------------+
| 6 December | 11.00 | First GM and Shares reclassified into |
| | a.m. | Reclassified Shares |
+---------------+--------+-----------------------------------------+
| 7 December | | Opening of Register and amendment to |
| | | the Official Lists to |
| | | reflect the reclassification of the |
| | | Shares |
+---------------+--------+-----------------------------------------+
| 9 December | 11.00 | Latest time and date for receipt of |
| | a.m. | Forms of Proxy for the |
| | | Second GM |
+---------------+--------+-----------------------------------------+
| 9 December | 5.00 | Calculation Date |
| | p.m. | |
+---------------+--------+-----------------------------------------+
| 9 December | | Fourth Interim Dividend paid to |
| | | Shareholders |
+---------------+--------+-----------------------------------------+
| 13 December | 7.30 | Listing of Reclassified Shares |
| | a.m. | suspended on the Official Lists |
+---------------+--------+-----------------------------------------+
| 13 December | 11.00 | Second GM and, if the Scheme becomes |
| | a.m. | unconditional, Effective Date for the |
| | | implementation of the Proposals and |
| | | commencement of liquidation |
+---------------+--------+-----------------------------------------+
| 13 December | | Effective Date |
+---------------+--------+-----------------------------------------+
| 14 December | | Expected date of issue of the Henderson |
| (or as soon | | Global Financials Fund Shares, which |
| as | | are issued as part of the Scheme |
| practicable | | |
| thereafter) | | |
+---------------+--------+-----------------------------------------+
| Week | | Despatch of: (i) cheques or CREST |
| commencing 27 | | accounts credited to |
| December | | Shareholders who elect for the Cash |
| | | Option and (ii) letters of |
| | | confirmation in respect of Henderson |
| | | Global Financials Fund |
| | | Shares |
+---------------+--------+-----------------------------------------+
| By 9 November | | Cancellation of listing of Shares on |
| 2011 | | the Official Lists |
+---------------+--------+-----------------------------------------+
For further information please contact:
Company
Julian Tregoning, Chairman
020 7818 6125
Henderson
James de Sausmarez, Head of Investment Trusts
020 7818 3349
Numis Securities
David Benda, Corporate Broking
020 7260 1275
The information in this announcement should be read in conjunction with the full
text of the circular to shareholders dated 10 November 2010 (the "Circular").
Capitalised terms used in this announcement shall, unless the context otherwise
requires, bear the meaning given to them in the Circular.
A copy of the Prospectus has been submitted to the National Storage Mechanism
and will shortly be available for inspection at www.hemscott.com/nsm.do
This information is provided by RNS
The company news service from the London Stock Exchange
END
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