Saba Capital Announces Intention to Requisition General Meetings at Four U.K.-Listed Trusts to Provide Liquidity for Shareholders Through Open-Ended Fund Transition
Intends to Requisition General Meetings at Trusts Managed by
Plans to Submit Proposal for the Trusts to Transition to Comparable Open-Ended Funds to Give Shareholders the Opportunity to Receive Long-Overdue Liquidity at NAV
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In connection with the announcement, Saba today issued the following open letter to its fellow shareholders of the four Trusts. For more information, visit: www.mindthegap-uktrusts.com.
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Fellow Shareholders,
On behalf of
We believe that Saba’s proposal would provide the Trusts’ shareholders with the following benefits:
- Long-Overdue Liquidity at NAV: A transition to an open-ended structure would eliminate the discount in each of these Trusts and would enable shareholders to achieve liquidity at NAV.
- Manager & Strategy Continuity: Shareholders would remain invested in the same strategy with the same manager in an open-ended – rather than closed-ended – structure.
- Tax Efficiency: Expected opportunity for shareholders to roll over their investment into an open-ended fund without triggering capital gains tax.
Responding to Shareholder Feedback: Providing the Option for Liquidity at NAV
During our campaign to deliver value to shareholders of
In our experience, shareholder action is often the impetus that some boards and managers need to take control of discount problems and deliver liquidity options for shareholders. For example, several of the
Saba’s Proposal: Give Shareholders the Option to Achieve Liquidity in an
It is apparent that shareholders of CYN, ESCT, MCT and SCP have been trapped in closed-end vehicles trading at deep discounts for years. In our view, the necessary solution is to roll or convert these Trusts into open-ended funds, which by definition trade at NAV and are free of the structural issues that plague closed-end funds. As a result, we intend to requisition General Meetings to give you the chance to vote on a proposal for the Trusts to implement a scheme or process that would provide you the opportunity to roll your investment into a better performing open-ended fund with the same strategy and the same manager.
While MCT and SCP were not part of our initial campaign, we believe they have traded at wide discounts for too long and that their shareholders would greatly benefit from an open-ended fund structure. Of the seven trusts targeted in our initial campaign, we have focused on CYN and ESCT because we believe they are best positioned for an open-ended fund conversion and, unlike HOT and KPC, their boards have not shown an intent to take this action on their own.
|
Trust |
Discount |
|
|
|
Current |
3-Year Average |
|
|
-11.8% |
-13.5% |
|
|
-7.5% |
-13.2% |
|
Middlefield Canadian Income PCC |
-11.7% |
-13.1% |
|
|
-10.1% |
-12.9% |
|
Total Potential Gain for the Trusts’ Shareholders If All Proposals Are Accepted4 |
£125.1 million |
|
|
Source: Bloomberg. Data is in GBP and as of |
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The Opportunity: Remain Invested in a Fund That Will Never Trade at a Discount to NAV
Our goal is simple: provide you the opportunity to remain invested in the same strategy within an open-ended fund structure that will never trade at a discount to NAV.
The choice is yours to make, and we are excited to offer you the long-overdue liquidity opportunity that you deserve. Saba remains committed to acting as a positive force in the market by putting shareholders’ interests first, delivering enhanced returns for investors and helping rehabilitate the fractured
Sincerely,
Founder & Chief Investment Officer,
***
SABA HOLDINGS IN EACH TRUST
As of
|
Trust |
Manager of Interest |
Aggregate Interest |
|
|
|
29.7% |
|
|
|
29.3% |
|
Middlefield Canadian Income PCC |
|
29.3% |
|
|
|
11.3% |
About Saba
DISCLAIMER
Saba may continue transacting in the shares and securities of the Trusts, and/or derivatives referenced to them (which may include those providing long and short economic exposure) for an indefinite period following the date of this announcement and may increase or decrease its interests in such shares, securities and/or derivatives at any time.
FORWARD LOOKING STATEMENTS
This announcement contains certain forward-looking statements and information that are based on Saba’s beliefs, as well as assumptions made by, and information currently available to, Saba. These statements include, but are not limited to, statements about strategies, plans, objectives, expectations, intentions, expenditures and assumptions and other statements that are not historical facts. When used herein, words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan” and “project” and similar expressions (or their negative) are intended to identify forward-looking statements. These statements reflect Saba’s current views with respect to future events, are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. Further, certain forward-looking statements are based upon assumptions as to future events that may not prove to be accurate. Actual results, performance or achievements may vary materially and adversely from those described herein. There is no assurance or guarantee with respect to the prices at which any securities of the Trusts or any other trust will trade, and such securities may not trade at prices that may be implied herein. Any estimates, projections or potential impact of the opportunities identified by Saba herein are based on assumptions that Saba believes to be reasonable as of the date hereof, but there can be no assurance or guarantee that actual results or performance will not differ, and such differences may be material and adverse. No representation or warranty, express or implied, is given by Saba or any of its officers, employees or agents as to the achievement or reasonableness of, and no reliance should be placed on, any projections, estimates, forecasts, targets, prospects or returns contained herein. Neither Saba nor any of its directors, officers, employees, advisers or representatives shall have any liability whatsoever (for negligence or misrepresentation or in tort or under contract or otherwise) for any loss howsoever arising from any use of information presented in this announcement or otherwise arising in connection with this announcement. Any historical financial information, projections, estimates, forecasts, targets, prospects or returns contained herein are not necessarily a reliable indicator of future performance. Nothing in this announcement should be relied upon as a promise or representation as to the future. Nothing in this announcement should be considered as a profit forecast.
PERMITTED RECIPIENTS
In relation to the
DISTRIBUTION
Not for release, publication or distribution, in whole or in part, directly or indirectly, in, into or from any jurisdiction where to do so would constitute a violation of the relevant laws of that jurisdiction. The distribution of this announcement in certain countries may be restricted by law and persons who access it are required to inform themselves and to comply with any such restrictions. Saba disclaims all responsibility where persons access this announcement in breach of any law or regulation in the country of which that person is a citizen or in which that person is residing or is domiciled.
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1 Saba previously requisitioned general meetings at
2 Ibid.
3 HOT circular dated
4 The amount of capital trapped in the Trusts due to their discounts, which is also the amount of capital that shareholders could gain across the Trusts if they had an opportunity to exit at NAV.
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Investor Contact
saba@allianceadvisors.com
Media Contact
ckiaie@longacresquare.com / ksylvester@longacresquare.com
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