Aberforth Split Level Income Trust Plc - Update on planned reconstruction and voluntary winding-up of the Company and further dividend
NOT
FOR
RELEASE,
PUBLICATION
OR
DISTRIBUTION,
IN
WHOLE
OR
IN
PART,
DIRECTLY
OR INDIRECTLY, TO US PERSONS OR IN OR INTO
This announcement is an advertisement and not a prospectus. This announcement does not constitute or form part of, and should not be construed as, any offer for sale or subscription of, or solicitation of any offer to buy or subscribe for, any securities in
Aberforth
Split
Level
Update on planned reconstruction and voluntary winding - up of the Company and further dividend
Introduction and background
The last “Chairman’s Statement”, released with the Company’s Interim Report on
The Board has reached agreement in principle with
AGVIT will be a new investment trust, expected to launch on
AGVIT’s
investment
objective will
be
to
provide AGVIT's
ordinary
shareholders with
high
total
returns, incorporating an attractive level of income, and to provide AGVIT's ZDP shareholders with a pre- determined final capital entitlement on AGVIT's planned winding-up date of
It is also proposed that AGVIT issue AGVIT ordinary shares and AGVIT ZDP shares at the issue price of
Benefits of the Proposals
The Board considers that the Proposals have the following benefits for Shareholders.
# They may offer Shareholders (depending on individual circumstances) the opportunity to roll over their investments in a tax efficient manner (without incurring an immediate liability toUK capital gains tax) into AGVIT's ordinary shares and/or ZDP shares.
# They enable Shareholders to maintain their exposure to a diversified portfolio of smallUK quoted companies through a closed-ended investment vehicle with a fixed life without incurring significant realisation costs or portfolio reorganisation costs.
# They allow Ordinary Shareholders to maintain geared exposure to a portfolio of attractively valued smallUK quoted companies.
# They enable Shareholders to continue to benefit from the management expertise ofAberforth Partners .
# They offer Ordinary Shareholders who wish to realise some or all of their investment the opportunity to do so at close to Net Asset Value.
# They avoid the need to realise all of the Company's small cap investment portfolio in the market to the extent that all or part of it is transferred to AGVIT under the Proposals, thereby saving potential realisation costs which would otherwise be borne by Ordinary Shareholders on the winding up of the Company.
# Shareholders who choose to roll over their investment in the Company into AGVIT will benefit from a £450,000 contribution fromAberforth Partners to the launch costs of AGVIT.
Further details of the Proposals
Under the terms of the proposed Scheme:
# Ordinary Shareholders (other than overseas holders) will be able to exchange some or all of their investment in the Company for ordinary shares in AGVIT and/or to realise some or all of their investment in the Company for cash. To the extent that their election for AGVIT ordinary shares is scaled back, Ordinary Shareholders will be able to elect for AGVIT ordinary shares and AGVIT ZDP shares in a ratio determined by AGVIT’s level of gearing.
# ZDP Shareholders (other than overseas holders) will be able to exchange some or all of their investment in the Company for ZDP shares in AGVIT and/or ordinary shares in AGVIT and/or to realise some or all of their investment in the Company for cash. To the extent that their election for AGVIT ZDP shares is scaled back, ZDP Shareholders will be able to elect for AGVIT ordinary shares and AGVIT ZDP shares in a ratio determined by AGVIT’s level of gearing.
If Shareholders approve of these Proposals, it is currently anticipated that AGVIT would acquire part or all of the Company’s assets, the consideration to be satisfied in part by the issue of AGVIT shares to Shareholders electing to roll over their investment into AGVIT, with the balance being payable by AGVIT to the Company in cash which it intends raising by means of a placing and offer for subscription.
It is intended that the AGVIT board shall have discretion (after consultation with ASLIT,
# will not be larger than the Company; and # the gearing of AGVIT ordinary shares by AGVIT ZDP shares will be in the range of 30 to 40 per cent.
In exercising its discretion, it is the intention of the AGVIT board to seek to ensure a fair allocation and give preference, so far as is practicable, in allocating AGVIT ordinary shares, to those Ordinary Shareholders who have elected (or are deemed to elect) to rollover into AGVIT ordinary shares and, in allocating AGVIT ZDP shares, the AGVIT board intends to give preference, so far as is practicable, to those investors who have also subscribed for (or rolled into) AGVIT ordinary shares and/or ZDP shares.
The AGVIT board anticipates that, in the absence of unforeseen circumstances, and on the basis of a gearing ratio at the higher end of the indicated 30-40%. range, the target aggregate dividends, in respect of the period from AGVIT's launch to
Second interim dividend
The Board had previously indicated that it planned to declare a second interim dividend to be paid to all Ordinary Shareholders (including those who elect to receive cash and not roll over their investment in the Company into AGVIT) by the end of
Next Steps
The Board, in conjunction with the AGVIT board, and advisers to both companies, is working towards publishing final proposals by the end of
26 April 2024
For further information, please contact:
Investment Managers
Aberforth Partners LLP +44 (0) 131 220 0733
Euan
Financial Advisers to the Company and AGVIT
J.P. Morgan Cazenove (JPMC) +44 (0) 207 742 4000
Solicitors to the Company and AGVIT
Important notices
The content of this announcement, which has been prepared by, and is the sole responsibility of, the Company, has been approved by
The information contained in this announcement is given at the date of its publication (unless otherwise marked) and is subject to updating, revision and amendment from time to time.
J.P. Morgan Cazenove, which is authorised and regulated by the Financial Conduct Authority, is acting only for the Company and AGVIT in connection with the matters described in this announcement and is not acting for or advising any other person, or treating any other person as its client, in relation thereto and will not be responsible to anyone other than the Company and AGVIT for providing the protections afforded to clients of J.P. Morgan Cazenove or advice to any other person in relation to the matters contained herein.
This announcement may include statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements can be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "anticipates", "expects", "intends", "may", "will" or "should" or, in each case, their negative or other variations or comparable terminology. All statements other than statements on historical facts included in this announcement, including, without limitation, those regarding the Company's financial position, strategy, plans, proposed acquisitions and objectives, are forward-looking statements.
Forward-looking statements are subject to risks and uncertainties and, accordingly, AGVIT's actual future financial results and operational performance may differ materially from the results and performance expressed in, or implied by, the statements. These forward-looking statements speak only
as
at
the
date of this
announcement
and
cannot be
relied
upon
as
a
guide
to
future
performance.
None
of
the
Company, AGVIT,
Aberforth
Partners
LLP,
J.P.
Morgan
Cazenove or
Dickson
Minto
LLP, or any of their respective affiliates, accepts any responsibility or liability whatsoever for or makes any representation
or warranty,
express
or
implied,
as
to
this
announcement,
including the
truth,
accuracy or completeness of this information in this announcement (or whether any information has been omitted from the announcement) or any other information relating to the Company or associated companies, whether written, oral or in visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of the announcement or its contents or otherwise
arising
in
connection
therewith.
The
Company,
AGVIT,
Aberforth
Partners
LLP,
J.P.
Morgan Cazenove and
This announcement does not constitute a prospectus relating to AGVIT, or form part of, any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any shares in the Company or AGVIT in any jurisdiction nor shall it, or any part of it, or the fact of its distribution, form the basis of, or be relied on in connection with or act as any inducement to enter into, any contract therefor. Investors should not purchase or subscribe for any transferable securities referred to in this announcement except on the basis of information contained in the prospectus being considered for publication by AGVIT in due course. The contents of such prospectus will, if published, supersede the information in this announcement.
Nothing in this document constitutes investment advice and any recommendations that may be contained herein have not been based upon a consideration of the investment objectives, financial situation or particular needs of any specific recipient. Copies of the prospectus, if published, will be available from