PEWZ Pewt Sec. Zdp

 
TIDMPEWZ 
 
20 November 2015 
 
           PEWT Securities PLC ("PEWT Securities" or the "Company") 
 
             Publication of Circular and Announcement of Proposals 
 
PEWT Securities plc has today published a circular (the "Circular") in 
connection with the proposals for the reconstruction and voluntary winding-up 
of PEWT Securities and for a Rollover Option for ZDP Shareholders. The Circular 
should be read in conjunction with the prospectus published today relating to 
PEWT Securities 2020 plc (the "Prospectus"). 
 
The Existing ZDP Shares of PEWT Securities confer a right to receive a Final 
Capital Entitlement of 221.78p per Existing ZDP Share (approximately GBP49.8 
million in total) on the winding up of PEWT Securities on 31 December 2015. At 
time of the 2014 reorganisation, the board of the Company's parent, Premier 
Energy and Water Trust plc, announced its intention to consider the various 
options that may be available for refinancing the Existing ZDP Shares nearer to 
the planned winding-up of PEWT Securities, including the issuance by the Group 
of a follow-on zero dividend preference share, to allow ZDP Shareholders who 
wish to do so the opportunity to roll over their investment into a similar 
investment. 
 
Further to this, the Board have today announced Proposals which allow ZDP 
Shareholders to elect to receive their Final Capital Entitlement of 221.78p per 
Existing ZDP Share upon the winding-up of PEWT Securities either: 
 
  * in cash; or 
  * to roll over some or all of their investment into New ZDP Shares to be 
    issued by PEWT Securities 2020 plc ("PEWT Securities 2020"), a new 
    subsidiary of the Parent formed for the purpose of the Proposals. 
 
The latest time and date for receipt of Elections is 1.00 p.m. on 11 December 
2015. If the number of New ZDP Shares which would be issuable pursuant to the 
Scheme as a result of giving full effect to Elections for the Rollover Option 
would exceed the Maximum Issue Size, then the number of New ZDP Shares issuable 
pursuant to the Scheme will be scaled back in the manner set out in the 
Circular. 
 
A copy of the Circular and Prospectus will be submitted to the National Storage 
Mechanism and will shortly be available for inspection at: http:// 
www.morningstar.co.uk/uk/NSM and on the Company's website: https:// 
www.premierfunds.co.uk/investors/investments/investment-trusts/ 
premier-energy-and-water-trust. Copies of the Circular and Prospectus, together 
with a Form of Election (for those ZDP Shareholders holding their Existing ZDP 
Shares in certificated form), will be sent to ZDP Shareholders of the Company 
today. 
 
Capitalised terms used but not defined in this announcement have the meanings 
set out in the Circular dated 20 November 2015. 
 
Enquiries: 
 
Premier Fund Managers Limited          + 44 (0) 1483 30 60 90 
Nigel Sidebottom 
James Smith 
Claire Long 
 
N+1 Singer                             + 44 (0) 20 7496 3000 
James Maxwell 
Liz Yong 
Tom Smale 
 
The following is a reproduction, without material adjustment, of the Chairman's 
Letter to ZDP Shareholders which is contained within the Circular: 
 
Dear ZDP Shareholder 
 
          Reconstruction and voluntary winding-up of PEWT Securities 
 
 1. Introduction 
 
As you will be aware, PEWT Securities is due to be wound up on 31 December 2015 
and ZDP Shareholders repaid their Final Capital Entitlement of 221.78p per ZDP 
Share. 
 
Your Board announced today proposals for an issue of New ZDP Shares and the 
opportunity for existing ZDP Shareholders to roll over their capital 
entitlement into New ZDP Shares. 
 
The Proposals provide for a members' voluntary liquidation of PEWT Securities 
and scheme of reconstruction pursuant to section 110 of the Insolvency Act 
1986. Under the Proposals, ZDP Shareholders may receive their Final Capital 
Entitlement upon the winding-up of PEWT Securities in cash or elect to roll 
over some or all of their investment into New ZDP Shares to be issued by PEWT 
Securities 2020, a new subsidiary of the Parent formed for the purpose of the 
Proposals. A rollover of an investment in the Existing ZDP Shares to the New 
ZDP Shares issued by PEWT Securities 2020 provides an alternative to the cash 
payment to which ZDP Shareholders are entitled upon a straight winding-up and 
will allow ZDP Shareholders who elect for the rollover to continue their 
investment in the Group. ZDP Shareholders who elect to roll over their 
investment into New ZDP Shares should not generally be treated as making a 
disposal for the purposes of UK taxation of chargeable gains as a result of 
doing so (as to which, please see the discussion at paragraph 2 of Part 5 of 
the Circular). 
 
In addition to the Scheme, the Proposals also include a conditional Placing of 
further New ZDP Shares. The number of New ZDP Shares to be issued pursuant to 
the overall Issue is limited to the Maximum Issue Size, which is designed to 
protect New ZDP Shareholders by ensuring that the Cover on the New ZDP Shares 
as at Admission (calculated by reference to the Gross Assets as at 11 December 
2015, the deadline for submission of Elections) is at least the Minimum Initial 
Cover. ZDP Shareholders seeking to roll over their investment into New ZDP 
Shares will be allocated New ZDP Shares in preference to any subscriptions from 
investors under the Placing. Accordingly, if there is sufficient demand for the 
Rollover Option from ZDP Shareholders, it is possible that no New ZDP Shares 
will be issued pursuant to the Placing. 
 
The Proposals are not conditional on the approval of ZDP Shareholders or 
Ordinary Shareholders of the Parent. The Proposals are conditional on the 
approval of the ordinary shareholder of PEWT Securities, which is the Parent, 
at the General Meetings. The Proposals are expected to proceed and the Circular 
is being sent to provide ZDP Shareholders with information regarding the 
Proposals and the Elections that may be made in respect of the Scheme. 
 
Details of the action to be taken by ZDP Shareholders in relation to the 
Proposals are set out in Part 2 of the Circular. It is important that ZDP 
Shareholders read Part 2 carefully and, if they wish to make a full or partial 
election for New ZDP Shares, where their Existing ZDP Shares are held in 
certificated form, return their Forms of Election or, where their Existing ZDP 
Shares are held in uncertificated form, submit their transfer to escrow 
instruction via CREST (TTE Instruction) so as to be received no later than 1.00 
p.m. on 11 December 2015. 
 
Failure to return or submit a valid Form of Election or a TTE Instruction or 
the return or submission of a Form of Election or a TTE Instruction which is 
not validly completed will result in the relevant ZDP Shareholder being deemed 
to have elected for the Cash Option. 
 
The attention of Shareholders is drawn to paragraph 2 of Part 5 of the Circular 
which sets out a general guide to certain aspects of current UK taxation law 
and HMRC published practice. 
 
The Circular should be read in conjunction with the Prospectus relating to PEWT 
Securities 2020. 
 
 1. Key features of the New ZDP Shares 
 
The New ZDP Shares: 
 
  * will have a repayment date of 30 November 2020 and will effectively rank as 
    to capital in priority to the Ordinary Shares; 
  * are designed to provide a pre-determined level of capital growth equivalent 
    to a gross redemption yield of 4.75 per cent. per annum based on the issue 
    price of a New ZDP Share of 100p; and 
  * subject to the Group having sufficient assets at the time and assuming the 
    Scheme is effective on 31 December 2015, will carry the right to be paid 
    the 2020 Final Capital Entitlement of 125.6519p in cash on 30 November 
    2020. 
 
The Issue Price will be 100 pence per New ZDP Share. Accordingly, if a ZDP 
Shareholder were to elect for the Rollover Option, where there is no scaling 
back, they would receive 2,217 New ZDP Shares for every  1,000 Existing ZDP 
Shares held on the Effective Date (entitlements to New ZDP Shares under the 
Scheme will be rounded down to the nearest whole number). 
 
However, the number of New ZDP Shares that may be issued under the Issue is 
limited to the Maximum Issue Size. The Board has determined that the gearing to 
be provided to the Group by the New ZDP Shares will be less than the gearing 
currently provided to the Group by the Existing ZDP Shares. Accordingly, if a 
sufficient number of ZDP Shareholders were to elect for the Rollover Option, 
such ZDP Shareholders would be scaled back in accordance with paragraph 14 of 
Part 4 of the Circular and would receive part of their Final Capital 
Entitlement in cash. By way of example, and assuming that the Maximum Issue 
Size is achieved, if all ZDP Shareholders elect for the Rollover Option, each 
ZDP Shareholder will be scaled back to the extent that they would receive 
approximately 53.6 per cent. of their Final Capital Entitlement in New ZDP 
Shares and the remainder of their Final Capital Entitlement in cash. 
 
On the assumption that (i) Gross Assets on 31 December 2015 are GBP75.9 million, 
which were the Gross Assets as at the Latest Practicable Date; and (ii) the 
Maximum Issue Size is achieved, then it is expected that following completion 
of the Scheme and the Placing, Gross Assets would need to fall by 31.0 per 
cent. in total, and 7.3 per cent. annually, in order for the New ZDP Shares not 
to receive their full 2020 Final Capital Entitlement of 125.6519p per New ZDP 
Share on 30 November 2020. 
 
 1. Background to the Proposals 
 
In August 2014, Shareholders approved proposals to extend the life of the 
Parent beyond its then-planned winding up date of 31 December 2015 and to 
implement a reorganisation of the Parent through a scheme of arrangement. The 
reorganisation became effective in September 2014, pursuant to which old zero 
dividend preference shares issued by the Parent were replaced with the Existing 
ZDP Shares issued by PEWT Securities, a subsidiary of the Parent which was 
formed for the purpose of the reorganisation. 
 

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