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Aberdeen Asian Smaller Companies Investment Trust PLC (the "Company")
Placing and open offer of £35 million nominal of 3.5 per cent. Convertible Unsecured Loan Stock 2019 at 100p per £1 nominal ("CULS"), proposed adjustment to the Company's investment policy and notice of General Meeting
The Board announced on 8 March 2012 that the Company and its advisers were exploring the possibility of an issue of convertible unsecured loan stock. The Board is pleased to announce that the Company is raising £35 million through a placing and open offer of CULS.
Matrix Corporate Capital has conditionally placed £35 million nominal of CULS with institutional investors and private client stockbrokers at the issue price of 100p per £1 nominal, subject to claw back of up to £17.5 million nominal of CULS, which is being made available to existing shareholders under the open offer.
The Board believes that introducing structural gearing should enable the Company to generate increased total returns over the longer term. The Directors intend to apply the net proceeds of the Issue, which will be approximately £34.4 million, to repay borrowings drawn down under the Bank Facility, of which the equivalent of £19.5 million of a maximum of £20 million was drawn down as at 18 April 2012. The balance of the Net Issue Proceeds will be available for investment by the Company's investment manager in accordance with the Company's investment policy.
The interest rate on the CULS will be 3.5 per cent. per annum, payable semi-annually. CULS Holders will be able to convert their CULS into Ordinary Shares twice annually throughout the life of the CULS, commencing on 30 November 2012 and all outstanding CULS will be repayable at par on 31 May 2019. The rate of the conversion will be set at a premium of 15 per cent. to the unaudited NAV (including income) per Ordinary Share at the time the CULS is issued, rounded down to the nearest 5 pence.
The Board is also taking the opportunity to restate the Company's investment objective so as to include smaller quoted companies with a market capitalisation of up to approximately US$1 billion at the time of investment (currently US$750 million) and to clarify the Company's gearing policy as part of its investment policy going forward.
Of the £35 million of CULS available under the Issue, £17.5 million is being made available to existing shareholders under the Open Offer, each Shareholder having a pro rata entitlement. In addition to each Shareholder's pro rata entitlement, each Shareholder may apply for an additional amount of up to its maximum pro rata entitlement of CULS and such applications will be satisfied to the extent that other Shareholders have not taken up their entitlements. The effect of this is that each Shareholder may apply for the number of CULS to which it would have been entitled on a pro rata basis had the entire £35 million Issue been reserved for existing Shareholders, although there is no guarantee that such applications will be satisfied in full.
Benefits of the Placing and Open Offer
The Board and the Investment Manager have confidence in the long-term prospects for investing in smaller companies in the economies of Asia and Australasia excluding Japan and believe that gearing should enable the Company to generate increased total returns over the longer term. The Directors believe that an issue of CULS will have the following advantages:
1. The CULS will give the Company:
• long-term structural gearing at a fixed cost that is competitive with the cost of other forms of gearing that the Company might have employed and which has the potential to be converted into the permanent capital base of the Company; and
• additional investable funds, thereby increasing the Company's ability to make new investments of the kind that have contributed significantly to its performance in the past.
2. The CULS will provide CULS Holders with:
• an attractive yield of 3.5 per cent. per annum, which is significantly above the dividend yield on the Ordinary Shares (1.3 per cent. based on the most recent annual dividend of 9.5p per Ordinary Share and an Ordinary Share price of 742.75p at the close of business on 18 April 2012);
• capital protection through repayment at par, with the repayment being well covered by the assets of the Company (more than eight times covered based on an Issue of £35 million nominal of CULS, repayment of the borrowings drawn down under the existing Bank Facility and unaudited net assets of £251million as at 18 April 2012); and
• the potential to participate in further growth in the NAV per Ordinary Share through the ability, semi-annually, to convert the CULS into new Ordinary Shares over the next seven years.
3. Relative to other forms of gearing, CULS Holders' interests should be more closely aligned with those of Shareholders through being convertible into Ordinary Shares in the future and relatively long-term in nature.
4. Following any conversion of CULS:
• the Company would have an increased number of Ordinary Shares in issue, which should, in due course, enhance the liquidity in the market for the Ordinary Shares; and
• the capital base of the Company would increase, allowing the Company's fixed operating costs to be spread across a larger number of Ordinary Shares, which should cause the Company's total expense ratio to fall.
Record date for Shareholders' entitlements under the Open Offer
6.00 p.m. on Thursday, 19 April
Open Offer opens and this Prospectus, Application Forms and Forms of Proxy despatched to Shareholders
Monday, 23 April
8.00 a.m. on Tuesday, 24 April
Open Offer Entitlements and Excess CREST Open Offer Entitlements credited to stock accounts in CREST of Qualifying CREST Shareholders
Tuesday, 24 April
Latest recommended time and date for requested withdrawal of Open Offer Entitlements and Excess CREST Open Offer Entitlements from CREST
4.30 p.m. on Tuesday, 8 May
Latest time and date for receipt of completed Savings Plans Application Forms and payment in full from Savings Plans Participants
11.00 a.m. on Wednesday, 9 May
Latest time and date for depositing Open Offer Entitlements and Excess CREST Open Offer Entitlements into CREST
3.00 p.m. on Wednesday, 9 May
Latest time and date for splitting Application Forms (to satisfy bona fide market claims)
3.00 p.m. on Thursday, 10 May
Latest time and date for receipt of completed Forms of Direction for use at General Meeting from Savings Plans Participants
11.00 a.m. on Friday, 11 May
Latest time and date for receipt of completed Application Forms and payment in full under the Open Offer and settlement of relevant CREST instructions (as appropriate) and Open Offer closed
11.00 a.m. on Monday, 14 May
Conversion Price calculated
as at Monday, 14 May
Latest time and date for receipt of Forms of Proxy and electronic proxy appointments via CREST system for use at General Meeting
9.00 a.m. on Tuesday, 15 May
Commitments undertaken by investors pursuant to Placing on a T + 3 basis
Tuesday, 15 May
Result of the Placing and Open Offer and conversion premium announced through an RIS
Wednesday, 16 May
General Meeting to approve matters in connection with the Issue
9.00 a.m. on Thursday, 17 May
Admission and commencement of dealings in CULS on London Stock Exchange's Main Market
8.00 a.m. on Friday, 18 May
CREST stock accounts credited with CULS issued in
Friday, 18 May
Definitive certificates for CULS issued in certificated form despatched
week commencing Monday, 21 May
1. References to times in this Prospectus are to London time.
2. All times and dates in the expected timetable above, elsewhere in this Prospectus and in the Application Form are indicative only and may be adjusted by the Company (with the agreement of Matrix Corporate Capital). Any changes to the timetable will be notified by publication of a notice through an RIS.
3. CREST Shareholders should inform themselves of CREST's requirements in relation to electronic proxy appointments.
A document which comprises (i) a prospectus prepared in accordance with the Prospectus Rules in connection with the Issue and the applications for Admission and (ii) a circular prepared in accordance with the Listing Rules in connection with the General Meeting is being published today and will be submitted to the National Storage Mechanism and will shortly be available for inspection at www.morningstar.co.uk/uk/NSM.
Copies of the Prospectus are also available from the Company at its registered office at Bow Bells House, 1 Bread Street, London, EC4M 9HH.
Matrix Paul Fincham/Robert Naylor 020 3206 7000
Aberdeen Asset Managers Limited
William Hemmings 020 7463 6000
Matrix Coporate Capital LLP ("Matrix"), which is authorised and regulated in the United Kingdom by the FSA, is acting solely for the Company and for no one else in connection with the Issue and Admission and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Matrix or for affording advice in relation to the Issue, Admission or any other matter referred to in this announcement or the Prospectus.
Words and expressions defined in the Prospectus have the same meanings when used in this announcement.
Neither the National Storage Mechanism website nor the Company's website nor the content of any website accessible from hyperlinks on those websites (or any other website) is (or is deemed to be) incorporated into, or forms (or is deemed to form) part of, this announcement.
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, CULS or any other security in the Company or securities in any other entity, in any jurisdiction, including the United States, 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, any contract or investment decision whatsoever, in any jurisdiction. This announcement does not constitute a recommendation regarding any securities. Any investment decision must be made exclusively on the basis of the Prospectus and any supplement thereto.
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