TIDMSTS
RNS Number : 8318U
STS Global Income & Growth Trust
28 November 2023
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED IN IT ARE NOT
FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY,
IN WHOLE OR IN PART, IN OR INTO, THE UNITED STATES, AUSTRALIA,
CANADA, JAPAN OR THE REPUBLIC OF SOUTH AFRICA OR ANY JURISDICTION
FOR WHICH THE SAME COULD BE UNLAWFUL .
This announcement contains information that is inside
information for the purposes of Article 7 of the UK version of
Regulation (EU) No. 596/2014 which is part of UK law by virtue of
the European Union (Withdrawal) Act 2018, as amended (the Market
Abuse Regulation).
28 November 2023
STS Global Income & Growth Trust plc
LEI: 549300UZ1Y7PPQYJGE19
Combination with Troy Income & Growth Trust plc
Introduction
The Board of STS Global Income & Growth Trust plc ("STS") is
pleased to announce that heads of terms have been agreed for a
proposed combination of STS with the assets of Troy Income &
Growth Trust plc ("TIGT").
The combination, if approved by each company's shareholders,
will be implemented through a scheme of reconstruction pursuant to
section 110 of the Insolvency Act 1986 (the "Scheme"), resulting in
the voluntary liquidation of TIGT and the rollover of its assets
into STS in exchange for the issue of new shares of STS (the "New
STS Shares") to holders of TIGT shares (the "TIGT Shares") with
TIGT shareholders ("TIGT Shareholders") offered the option of up to
100% cash exit (the "Cash Option") (the "Proposals").
Following implementation of the Proposals, the enlarged STS will
continue to be managed, on the same basis as currently, by Troy
Asset Management Limited ("Troy") with James Harries continuing as
the lead portfolio manager, supported by Tomasz Boniek and the
wider Troy investment team.
The Proposals are subject to the approval of TIGT and STS
Shareholders, and also to regulatory and tax approvals.
Benefits of the Proposals
-- An increase in scale, allowing the enlarged STS to spread its
fixed costs over a larger cost base, while also improving expected
liquidity.
-- A reduction in management fees to 0.55% of shareholders'
funds up to GBP250m and 0.50% above GBP250m (currently 0.65% of
shareholders' funds).
-- A significant cost contribution by Troy, the investment
manager of STS, equivalent to an eighteen month fee waiver on the
assets transferred from TIGT to STS (the "Cost Contribution").
-- A material portion of the rollover assets being transferred
in specie given there are a number of common holdings between the
two companies.
-- An increase in shareholder diversification.
Further details of the Scheme
TIGT Shareholders will receive New STS Shares as the default
option if no election is made under the Scheme.
For each company a Formula Asset Value ("FAV") will be
calculated using the companies' respective net asset values (cum
income and debt at fair value) ("NAV"). New STS Shares will be
issued based on the ratio of the STS FAV per share to the TIGT FAV
per share. In calculating the FAVs, each party will bear its own
costs incurred in relation to the Proposals, with the Cost
Contribution applied first to offsetting STS's costs (to the point
that STS Shareholders will not suffer NAV per share dilutions) and
second with any surplus applied to offset TIGT's costs.
TIGT Shareholders may elect to receive cash in respect of all or
part of their holding, with no limit on the number of TIGT Shares
which can be elected for the Cash Option. TIGT Shareholders
electing for the Cash Option will receive an amount in cash equal
to the NAV per TIGT Share less 2%, multiplied by the number of TIGT
Shares elected for the Cash Option.
Under the terms of the Proposals, any costs of realignment
and/or realisation of the TIGT portfolio prior to the Scheme
becoming effective will be borne by TIGT. The anticipated costs of
stamp duty, stamp duty reserve tax or other transaction tax for the
acquisition of the TIGT portfolio by STS will be borne by TIGT,
together with the anticipated London Stock Exchange admission
fees.
In accordance with customary practice for such transactions, the
City Code on Takeovers and Mergers is not expected to apply to the
Proposals.
Cost Contribution and Troy fee reduction
Troy has agreed to contribute towards the costs of the Proposals
an amount equal to the management fees payable to it in respect of
the assets transferred to STS under the Scheme for a period of 18
months, subject to a cap of GBP1.1 million.
In addition, for the enlarged STS, Troy will reduce its annual
management fee to 0.55% of shareholders' funds up to GBP250m and
0.50% above GBP250m (currently 0.65% of shareholders' funds).
Troy will also waive the termination fee payable to it in
respect of the termination of the TIGT investment management
delegation agreement.
STS Board of Directors
Following completion of the Proposals, it is expected that the
STS Board will comprise the current STS Directors and two directors
from the current Board of TIGT. It is expected that two current STS
directors will retire from the Board at, or immediately prior to,
the next STS AGM, which is expected to be held in July 2024, and
they will not stand for re-election. The Chairman of the Board of
STS will continue in that role.
Expected timetable
It is intended that the documentation in connection with the
Proposals will be posted to shareholders in February 2024, with a
view to convening general meetings and completing the Scheme by the
end of March 2024.
The Chairman of STS, John Evans, commented:
"The Board of STS is very pleased to have reached agreement with
the TIGT Board over the proposed combination of the two Investment
Companies.
The combined entity will create a larger investment trust with
significantly reduced overall costs and expected improved liquidity
which will continue to follow Troy's long term, quality focussed,
conservative investment management style with a global opportunity
set. We believe it is an attractive strategy for those with
irreplaceable capital and looking for both income and capital
growth.
We hope this represents an important step in us being able to
offer this investment approach at scale in a closed ended
vehicle."
Enquiries
STS Global Income & Growth Trust plc
John Evans (Chairman) Contact via J.P Morgan Cazenove
J.P. Morgan Cazenove
William Simmonds
Rupert Budge 0203 493 8000
Important Information
This announcement is released by the Company and the information
contained within this announcement is deemed by the Company to
constitute inside information for the purposes of Article 7 of the
UK version of the EU Market Abuse Regulation (Regulation (EU) No.
596/2014) which forms part of UK law by virtue of the European
Union (Withdrawal) Act 2018, as amended. Upon the publication of
this announcement via a Regulatory Information Service, such
information is now considered to be in the public domain.
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END
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