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LONDON (Alliance News) - BlackRock Frontiers Investment Trust PLC on Thursday said it will give shareholders the chance to tender their shares for repurchase.
The company said Winterflood, its broker, may sell tendered shares into the market as opposed to the company itself repurchasing them, as some investors may wish to build their shareholdings. The tender offer proposals will require the approval of shareholders at a general meeting to be held on February 10, 2016.
"If the number of shares tendered is such that the directors are of the view that the continuance of the company is not in the best interests of the continuing shareholders, they may withdraw the tender offer, and in such circumstances the company will put forward further proposals to shareholders," the company said.
The company said its investment manager sees scope to increase its frontier markets investing strategy, and could deploy an additional amount of about USD100.0 million in current market conditions. That means there should be "limited take-up" of the tender offer as well as "sufficient demand" from investors to be able to utilise that capacity.
"Given the potentially illiquid nature of the company's investment opportunities and the time it could take to deploy any proceeds, depending on the level of demand it may be appropriate for the company to issue C shares to satisfy this demand. The company is therefore seeking shareholder authority at the AGM to issue up to 65 million C shares at 100 pence per C share," BlackRock Frontiers Investment Trust said.
"The board gives no assurance that any C shares will be issued and a prospectus would be required in connection with any issue, but if shareholder approval is granted at the AGM the company would have the required shareholder authorities to issue C shares without needing to convene a separate general meeting," BlackRock Frontiers Investment Trust said.
The trust also wants to give its manager more flexibility to invest by changing its investment policy.
"The company currently invests in companies listed or operating in frontier markets (defined as any country which is not in either the MSCI Emerging Markets Index or the MSCI Developed Markets Index). The board is proposing an amendment to the company's current investment objective and policy so as to define frontier markets as any country that is not a constituent of the MSCI Emerging Markets Index or the MSCI Developed Markets Index as at December 1, 2015," the company said
"In addition to this, it is proposed that up to 20% of the gross value of the portfolio (on an ongoing basis) may be invested in Columbia, Egypt, Peru or The Philippines, which have been identified by the investment manager as countries that are members of the MSCI Emerging Markets Index as at 1 December 2015 but which share similar characteristics to those of less developed markets (such as low per capita GDP, high growth potential and less developed capital markets)," the company said.
Over the year to September 30, the company's net asset value per share fell by 17.9% and the share price fell by 22.9%. The MSCI Frontier Markets Index fell by 24.2% and the MSCI Emerging Markets Index fell by 19.3%, respectively.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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