TIDMJEFI
RNS Number : 1852L
Jupiter Emerging & Frontier Inc.Tst
12 May 2022
12 May 2022
LEI: 213800RLXLM87NO26S30
Jupiter Emerging and Frontier Income Trust plc
(the "Company" or "JEFIT")
Publication of General Meeting Circular
Further to the announcement made by the Company on 14 April
2022, the Board of Directors of the Company (the "Board") announces
that it has today published a circular (the "Circular") setting out
proposals for a Members' Voluntary Liquidation of the Company (the
"Proposal").
The Circular includes notice of a general meeting to be held at
the offices of Jupiter Asset Management Limited, The Zig Zag
Building, 70 Victoria Street, London SW1E 6SQ, United Kingdom on 13
June 2022 at 3.30 p.m (the "General Meeting"). A resolution will be
put to Shareholders to seek their approval of the Proposal (the
"Resolution").
For further information please contact:
Jupiter Asset Management Limited (Company Secretary)
Magnus Spence
020 3817 1000
investmentcompanies@jupiteram.com
Peel Hunt LLP (Broker)
Liz Yong / Luke Simpson
020 7418 8900
Link Group (Registrar)
Scott Daly
0371 664 0300
enquiries@linkgroup.co.uk
Capitalised terms used in this announcement have the meanings
given to them in the Circular published by the Company today.
EXPECTED TIMETABLE
Ex-dividend date for the Interim 1 June 2022
Dividend
Record date for the Interim Dividend 6 June 2022
Date from which it is advised close of business on 8 June 2022
that dealings in Shares should
only be for cash settlement and
immediate delivery of documents
of title
Latest time and date for receipt 3.30 p.m. on 9 June 2022
of Forms of Proxy or electronic
proxy appointments for use at
the General Meeting
Latest time for delivery to Registrars 5.00 p.m. on 10 June 2022
of documents of title relating
to dealings in Shares subject
to cash settlement
Close of Register and Record 6.00 p.m. on 10 June 2022
Date for participation in the
Members' Voluntary Liquidation
Suspension of Shares from trading 7.30 a.m. on 13 June 2022
on the London Stock Exchange
and suspension of listing on
the Official List
General Meeting to approve the 3.30 p.m. on 13 June 2022
Members' Voluntary Liquidation
Appointment of Liquidators 13 June 2022
Cancellation of the listing of expected to be at 8.00 a.m. on
the Shares on the Official List 15 June 2022
and cancellation of admission
to trading of the Shares on the
Main Market
Payment date for the Interim expected to be on or around 24
Dividend June 2022
First cash distribution to Shareholders* expected to be on or around 31
July 2022
* Actual date to be determined by the Liquidators.
The above times and/or dates may be subject to change and, in
the event of such change, the revised times and/or dates will be
notified to Shareholders by an announcement through a Regulatory
Information Service.
All references to times in the Circular are to London times.
Letter from the Chairman
Recommended Members' Voluntary Liquidation of the Company
1 Background
The Company today announces Proposals to place the Company into
voluntary liquidation.
The current market capitalisation of the Company is below GBP60
million, which the Directors believe to be lower than is desirable
for an investment trust of this kind. JEFIT was launched in May
2017 and, although the subsequent investment performance of the
Company has been respectable in the context of the emerging and
frontier markets into which it invests, the Redemption Facility
offered by the Company has resulted in a significant shrinkage of
its capital base since the onset of the Covid-19 pandemic. In view
of the consequent small size of the Company and the risk of further
shrinkage through future redemptions, the Directors believe that,
for JEFIT to be viable, it would be necessary to grow the Company
through a combination of capital appreciation and the issuance of
new shares. Given current market conditions, in particular the
effect on markets of Russia's invasion of Ukraine, the Directors
believe that for the foreseeable future there are limited
opportunities for the growth of the Company. Accordingly, the Board
is proposing that the Company be wound up, such that Shareholders
are provided with a full cash exit less costs. Whilst the
possibility of a rollover option was considered and a number of
proposals for rollover vehicle candidates were reviewed, the Board
has concluded that it is not in the interests of Shareholders to
offer a rollover option.
The proposed winding up of the Company requires the approval of
Shareholders at a General Meeting that is being convened pursuant
to the Circular.
The General Meeting will be held at the offices of Jupiter Asset
Management Limited, The Zig Zag Building, 70 Victoria Street,
London SW1E 6SQ, United Kingdom on 13 June 2022 at 3.30 p.m. The
formal notice convening the General Meeting is set out at the end
of the Circular. Shareholders are asked to subject a proxy vote in
advance of the meeting.
The Board believes that approval of a Members' Voluntary
Liquidation at the General Meeting is in the best interests of the
Company and Shareholders as a whole and recommends that you vote in
favour of the Resolution at the General Meeting.
The purpose of the Circular is to provide Shareholders with
details of the Proposals and to set out the reasons why the
Directors are recommending that Shareholders vote in favour of the
Resolution at the General Meeting.
2 Members' Voluntary Liquidation
Under the proposed Members' Voluntary Liquidation, Shareholders
will be able to realise their investment in the Company by way of a
voluntary liquidation of the Company. The Members' Voluntary
Liquidation is conditional upon Shareholder approval of the
Resolution at the General Meeting. If the Resolution is not passed,
the Company shall continue in operation until other proposals can
be put forward.
If the Resolution to place the Company into Members' Voluntary
Liquidation is passed, the Liquidators will work with Jupiter to
realise the Company's portfolio. It is expected that the
Liquidators will make an initial cash distribution, on or around 31
July 2022, as described at paragraph 3 below and will thereafter
continue to work with Jupiter to realise the remaining investments
and distribute any further proceeds to Shareholders. It is not
possible to indicate how long this process may take, particularly
given that some holdings, as detailed below, are in respect of
jurisdictions that are currently incapable of being traded. So far
as possible, the Liquidators and Jupiter will seek to ensure that
the Company's tax status as an investment trust is maintained
throughout this process, although this cannot be guaranteed.
Subject to Shareholder approval, Gareth Rutt Morris and Andrew
Martin Sheridan of FRP Advisory Trading Limited will be appointed
as joint liquidators to the Company and their remuneration shall be
determined by the Company. Upon the appointment of the Liquidators,
all powers of the Board will cease, the Board will stand down, the
listing of Shares on the Official List will be cancelled and the
Liquidators will be responsible for the affairs of the Company
until it is wound up. Following their appointment, the Liquidators
will make an initial cash distribution, discharge the liabilities
and satisfy all the creditors of the Company, divide the surplus
assets of the Company among the Shareholders according to their
respective rights and interests in the Company by way of further
distributions and eventually dissolve the Company.
3 Shareholder distributions
Assuming the Resolution is passed, it is currently expected that
at least 90 per cent. of the Company's portfolio will be realised
for cash within three weeks of the General Meeting. In this case,
the Liquidators expect to make an initial distribution of the cash
proceeds of the liquidation of the Company's portfolio, less the
costs of the Proposals and the amount attributable to the
Liquidation Fund, described below, on or around 31 July 2022 (the
"Initial Distribution").
A small minority of the assets of the Company is relatively
illiquid and it may therefore take some months to fully realise the
portfolio. In particular, as per the announcement published on 3
March 2022, the Company holds Russian securities which are
currently incapable of being traded due to international sanctions
in response to the war in Ukraine. It is not known when or indeed
if such regulations will be revised to permit the Company to
dispose of these Russian securities. However, as these Russian
securities are held at nil value for accounting purposes this will
have a minimal impact on the value of the distributions to
Shareholders relative to the Company's reported NAV as at the date
of the Circular.
The Liquidators will retain sufficient funds in the Members'
Voluntary Liquidation to meet the current, future and contingent
liabilities of the Company, including the costs and expenses
(inclusive of VAT, if applicable) of the liquidation not already
paid at the point of liquidation and an additional retention of
GBP100,000 for unknown contingencies (the "Liquidation Fund").
If the Proposals are approved, Shareholders will be provided
with a full cash exit less costs. Accordingly, the Board has
exercised its discretion to suspend the Redemption Facility.
Once the Liquidators have realised the Company's assets, made
the Initial Distribution, satisfied the claims of creditors of the
Company and paid the costs and expenses of the liquidation, it is
expected that the Liquidators would make a final distribution to
Shareholders. This final distribution, if any, would be made solely
at the discretion of the Liquidators.
All Shareholders on the Register on the Record Date (being 6.00
p.m. on 10 June 2022) will be entitled to the distributions from
the Liquidators, including the Initial Distribution.
Nothing in the Proposals contained in the Circular shall impose
any personal liability on the Liquidators or either of them.
4 Interim dividend
In order to retain investment trust status for the period
between 1 October 2021 and 12 June 2022, the Company intends to pay
the Interim Dividend on or around 24 June 2022 to Shareholders on
the Register on 6 June 2022. The amount and precise timing of the
payment of such dividend will be announced via a Regulatory
Information Service in due course.
5 Costs and expenses of the Proposals
The costs and expenses of the Proposals will be borne by the
Company and are expected to be approximately GBP240,000 (including
VAT) in aggregate.
6 The Company's service providers
The Company is taking steps to ensure that the appointments of
certain service providers will terminate should the Resolution be
passed.
It is intended that Jupiter, as AIFM of the Company, will be
retained to assist the Liquidators with the sale of the Company's
assets, given its expertise and knowledge of the portfolio. On 10
March 2022, the Company served protective notice of termination on
the AIFM in accordance with the Investment Management Agreement
between the Company and the AIFM. Assuming the Resolution is
passed, Jupiter has agreed to waive its entitlement to management
fees under the Investment Management Agreement after the end of the
current calendar quarter on 30 June 2022. For the purpose of
calculating the final management fee due for this quarter, the
Company's Net Asset Value will be calculated as at the date of the
General Meeting.
In addition, the Company's Registrars, Link Group, and the
Company's Custodian, JP Morgan, will be retained by the Company
during the liquidation period.
The Company has served notice on the Company's remaining service
providers, such that their appointments will terminate should the
Resolution be passed.
7 Suspension and cancellation of listing and trading of the Shares
The Register will be closed at 6.00 p.m. on 10 June 2022.
Application will be made to the FCA for the suspension of the
listing of the Shares on the Official List and application will be
made to the London Stock Exchange for suspension of trading in the
Shares at 7.30 a.m. on 13 June 2022.
The last day for dealings in the Shares on the London Stock
Exchange on a normal rolling two-day settlement basis will be 8
June 2022. After that date, dealings should be for cash settlement
only and will be registered in the normal way if the transfer,
accompanied by the documents of title, is received by the
Registrars by close of business on 10 June 2022. Transfers received
after that time will be returned to the person lodging them and, if
the Resolution is passed, the original holder will receive any
proceeds from distributions made by the Liquidators.
If the Resolution is passed, the Company will make an
application for the cancellation of the admission of the Shares to
listing on the Official List and to trading on the Main Market
immediately following the General Meeting with the cancellation
expected to take effect at 8.00 a.m. on 15 June 2022.
After the liquidation of the Company and the making of the final
distribution to Shareholders (if any), existing certificates in
respect of the Shares will cease to be of value and any existing
credit of the Shares in any stock account in CREST will be
redundant.
8 General Meeting
The implementation of the Members' Voluntary Liquidation will
require Shareholders to vote in favour of the Resolution at the
General Meeting. The Resolution is being proposed to:
-- place the Company into liquidation and to appoint the Liquidators;
-- fix the remuneration of the Liquidators on the basis of time spent by them;
-- authorise the Liquidators to proceed to wind up the Company
in accordance with the provisions of the Insolvency Act 1986;
and
-- direct that the Company's books and records be held to the order of the Liquidators.
You will find set out at the end of the Circular a Notice
convening the General Meeting to be held at 3.30 p.m. on 13 June
2022. The Notice includes the full text of the Resolution.
The Resolution to be proposed at the General Meeting will be
proposed as a special resolution and, in order to be passed, will
require the approval of 75 per cent. or more of the votes cast at
the General Meeting, whether in person or by proxy.
In accordance with the Articles, all Shareholders present in
person or by proxy shall upon a show of hands have one vote and
upon a poll shall have one vote in respect of each Share held. In
order to ensure that a quorum is present at the General Meeting, it
is necessary for two Shareholders entitled to vote to be present,
whether in person or by proxy (or, if a corporation, by a
representative).
The Board is pleased to be able to give Shareholders the
opportunity to attend the General Meeting in person at the address
set out in the notice convening the General Meeting at the end of
the Circular.
9 Taxation
The following paragraphs, which are intended as a general guide
only, are not exhaustive, and do not constitute legal or tax
advice, are based on current UK legislation and published HMRC
practice, both of which are subject to change, possibly with
retrospective effect. They summarise certain limited aspects of the
UK tax treatment of the cash distributions made to Shareholders in
connection with the Members' Voluntary Liquidation of the Company,
and they relate only to the position of individual and corporate
Shareholders who hold their Shares beneficially as an investment
and (except in so far as express reference is made to the treatment
of non-UK residents) who are resident (and in the case of
individuals domiciled) in the UK for UK tax purposes.
Shareholders are advised to take independent advice in relation
to the tax implications of any matters set out in the Circular and
to consult an appropriate professional tax adviser.
A Shareholder who receives a distribution of cash in the course
of the Members' Voluntary Liquidation should be treated as making a
disposal or part disposal of his Shares for the purposes of UK
taxation of chargeable gains which may, depending on such
Shareholder's individual circumstances (including the availability
of exemptions, reliefs and allowable losses), give rise to a
chargeable gain or allowable loss for the purposes of UK taxation
of chargeable gains.
Shareholders who are not resident in the UK (excluding, in the
case of an individual Shareholder, Shareholders who are only
temporarily non-resident in the UK) for UK tax purposes should not
be subject to UK tax on chargeable gains on a disposal, or part
disposal, of Shares unless such Shares are used, held or acquired
for the purposes of a trade, profession or vocation carried on in
the UK through a branch or agency or, in the case of a corporate
Shareholder, through a permanent establishment. Such Shareholders
may be subject to foreign tax on any gain under local law.
The UK tax code contains provisions which permit HMRC to
counteract tax advantages arising from certain transactions in
securities by (among other things) treating some or all of the
proceeds of capital disposals as distributions of income. Generally
speaking, these provisions should not apply where it can be shown
that the transactions in question were entered into for genuine
commercial reasons and did not involve as one of their main objects
or purposes the obtaining of a tax advantage. Shareholders are
advised to take independent advice as to the potential application
of these and other anti-avoidance provisions in the light of their
own particular circumstances. Application has not been made to HMRC
for clearance as to these matters.
10 Recommendation to Shareholders
The Board considers that the Proposals are in the best interests
of the Company and its Shareholders as a whole. Accordingly the
Board unanimously recommends that Shareholders vote in favour of
the Resolutions to be proposed at the General Meeting. The
Directors intend to vote in favour of the Resolutions in respect of
their holdings of Shares, amounting to 470,973 Ordinary Shares in
aggregate (representing approximately 0.79 per cent. of the issued
share capital of the Company as at the date of the Circular).
The Investment Adviser, as investment manager or adviser to
certain Jupiter-managed investment funds, exercises discretion
over, and intends to vote in favour of the Resolution in respect
of, 7,065,000 Ordinary Shares in aggregate (representing
approximately 11.82 per cent. of the issued share capital of the
Company as at the date of the Circular).
John Scott
(Chairman)
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