Blackrock Fr Regulatory News (BRFI)

BlackRock Frontiers Investment Trust Plc - Publication of Prospectus and Circular

PR Newswire

London, October 18

THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO, THE UNITED STATES OF AMERICA, CANADA, AUSTRALIA, JAPAN, NEW ZEALAND, THE REPUBLIC OF SOUTH AFRICA AND THE KINGDOM OF SAUDI ARABIA OR ANY OTHER JURISDICTION WHERE IT IS UNLAWFUL TO DISTRIBUTE THIS ANNOUNCEMENT. PLEASE SEE THE IMPORTANT NOTICE AT THE END OF THIS ANNOUNCEMENT. 

This announcement is an advertisement for the purposes of the Prospectus Rules of the UK Financial Conduct Authority ("FCA") and not a prospectus. This announcement does not constitute or form part of, and should not be construed as, an offer for sale or subscription of, or solicitation of any offer to subscribe for or to acquire, any shares in the Company in any jurisdiction, including in or into the United States, Canada, Australia, Japan, New Zealand, the Republic of South Africa or the Kingdom of Saudi Arabia. Investors should not subscribe for or purchase any shares referred to in this announcement except on the basis of information in the prospectus (the "Prospectus") published by BlackRock Frontiers Investment Trust plc (the "Company") in connection with the proposed admission of its C Shares to the premium listing segment of the Official List of the FCA and to trading on the main market for listed securities of London Stock Exchange plc (the "London Stock Exchange"). A copy of the Prospectus will shortly be available for inspection from the Company's registered office and on its website (www.blackrock.co.uk/brfi).

BLACKROCK FRONTIERS INVESTMENT TRUST PLC

LEI: 5493003K5E043LHLO706

Publication of Prospectus and Circular

19 October 2018

On 17 August 2018, BlackRock Frontiers Investment Trust plc (the "Company") announced that it had agreed in principle for the Company to act as the sole rollover vehicle for ordinary shareholders in BlackRock Emerging Europe plc ("BEEP") ("BEEP Shareholders") in connection with a proposed scheme of reconstruction and voluntary winding up of BEEP under section 110 of the Insolvency Act 1986 (the "Scheme"). Under the Scheme, the Company will issue C shares of $0.10 each in the capital of the Company (“C Shares”) at an issue price of 100 pence per C Share in exchange for the transfer to it of cash, cash equivalents and securities which are consistent with the Company's investment policy (the "Scheme Issue"), that represent the interests of BEEP Shareholders who elect to rollover into the Company. Up to 150 million C Shares are being made available pursuant to the Scheme Issue, which would be sufficient to satisfy all elections of BEEP Shareholders in the event that all BEEP Shareholders elect to rollover their holdings into the Company.

BlackRock Investment Management (UK) Limited believes that there is scope to increase the capacity of the Company's investment in countries within the Frontiers Universe. Accordingly, the Company’s board (the “Board”) is also proposing to issue C Shares by way of a placing and offer for subscription at an issue price of 100 pence per C Share (the "Issue"). The maximum number of C Shares to be issued pursuant to the Issue is 150 million less the number of C Shares issued pursuant to the Scheme Issue. Consequently, a maximum of 150 million C Shares will be issued in aggregate pursuant to the Scheme Issue and the Issue (together, the “Issues”).

In light of the continuing demand for the Company’s ordinary shares of US$0.01 each in the capital of the Company (“Ordinary Shares”) and the issuance of Ordinary Shares to date to satisfy this, the Directors also consider it expedient to renew the Board's authority to allot or to sell from treasury for cash, on a non-pre-emptive basis, Ordinary Shares (the “General Authority”). The General Authority will be sought in respect of 10 per cent. of the Ordinary Shares in issue as at the date of this announcement in substitution for the current authority to allot or sell from treasury Ordinary Shares.

The Board is therefore pleased to announce that the Company has today published a prospectus (the “Prospectus”) in relation to the issue of C Shares pursuant to the Issues, together with a circular (the “Circular”) to provide the Company’s ordinary shareholders (the “Shareholders”) with further details of the Scheme, the Issues and the General Authority (together, the “Proposals”) and to convene a general meeting of the Company (the “General Meeting”) to seek Shareholder approval for the Proposals. Further details on the Scheme and the Issues are set out at the end of this announcement.

The costs and expenses of the Scheme (excluding the costs associated with the Scheme Issue) will be paid by BEEP. The costs and the net proceeds of the Issue (which comprises the Placing and the Offer for Subscription) are dependent on the level of subscriptions received under the Issue.

The costs and expenses of the Issues, up to a maximum of 1 per cent. of the Gross Proceeds, will be borne indirectly by holders of C Shares since they will be paid out of the pool of assets attributable to the C Shares. In the event that the costs and expenses of the Issues (excluding, for the avoidance of doubt, transaction costs incurred in connection with the deployment of the proceeds of the Issues) exceed 1 per cent. of the Gross Proceeds, the excess costs will be offset against any amounts payable by the Company to the Manager for management fees. For the avoidance of doubt, any offset shall apply against the management fees payable in respect of the C Shares or be taken account of as part of the Conversion, such that there is no impact, positive or negative, on the amount of the management fees payable in respect of existing Ordinary Shares.

In the event that the Issues do not proceed, all costs and expenses of the Company associated with the Issues will be offset against any amounts payable by the Company to the Manager for the management fees.

In accordance with the Company’s normal dividend timetable, it is intended that a final dividend will be declared on the Ordinary Shares in respect of the financial year ended 30 September 2018 and such dividend is expected to have a record date of 4 January 2019 and to be paid in early February 2019. This will be declared as a final dividend and will therefore be subject to approval by Shareholders at the Company’s annual general meeting, expected to be held on 5 February 2019, before it can be paid. It is the Board’s expectation that the record date for the dividend will be prior to the conversion calculation date for the C Shares and, accordingly, it is not expected that C Shareholders will be entitled to receive this dividend.

Application will be made to the UK Listing Authority for the C Shares issued in connection with the Issues to be admitted to the premium segment of the Official List. Application will also be made to the London Stock Exchange for the C Shares issued in connection with the Issues to be admitted to trading on the premium segment of the main market. It is expected that the C Shares issued in connection with the Issues will be admitted to the Official List on 27 November 2018, and the first day of dealings in such shares on the main market of the London Stock Exchange will be 27 November 2018.

The ISIN of the C Shares will be GB00BD5GQJ41 and the SEDOL code will be BD5GQJ4.

Copies of the Circular and the Prospectus will shortly be available on the Company's website, www.blackrock.co.uk/brfi, and at the National Storage Mechanism, www.morningstar.co.uk/uk/nsm.

Terms used and not defined in this announcement shall have the meanings given to them in the Prospectus unless the context otherwise requires.

Expected timetable

Notes:

The above times and/or dates may be subject to change and in the event of such change, the revised times and/or dates will be notified to Shareholders by an announcement through a Regulatory Information Service.

All references to times in this document are to London time unless otherwise stated.

Enquiries:

Further details on the Scheme and the Issues

The Scheme

Pursuant to the terms of the Scheme, BEEP will be wound up by means of a members' voluntary liquidation pursuant to a scheme of reconstruction under section 110 of the Insolvency Act 1986.

Under the Scheme, eligible BEEP Shareholders ("Eligible Beep Shareholders") will be able to elect for the following options in respect of their holdings of BEEP Ordinary Shares:

to realise all or some of their investment in BEEP for cash (the "Cash Option"); and/or

to roll-over all or some of their investment into the Company and receive C Shares at an issue price of 100 pence per C Share (the "Rollover Option").

Eligible BEEP Shareholders who do not make a valid Election under the Scheme will be deemed to have elected for the Rollover Option.

If the Scheme is implemented, the Company will acquire a pool of assets (made up of cash, cash equivalents and securities which are consistent with the Company's investment policy). The consideration for such acquisition will be satisfied by the issue of C Shares by the Company to Eligible BEEP Shareholders who validly elect (or are deemed to elect) for the Rollover Option.

The Issue

The Issue will offer existing and new investors the opportunity to invest capital while allowing the Company to take advantage of opportunities in the investible universe.

In the event that commitments under the Placing and valid applications under the Offer for Subscription (when aggregated with the C Shares to be issued pursuant to the Scheme Issue) exceed 150 million C Shares, it would be necessary to scale back applications under the Placing and the Offer for Subscription.

Benefits of the Scheme Issue and the Issue

The Board believes that the Scheme Issue and the Issue will have, inter alia, the following principal benefits for Shareholders:

the additional capital raised will enable the Company to take advantage of attractive investment opportunities, whilst also diversifying its investment portfolio;

an increase in the size of the Company is expected to improve market liquidity of the Ordinary Shares. This may enhance the marketability of the Company and may result in a broader investor base over the longer term; and

an increase in the size of the Company will mean that the fixed costs of operating the Company are spread over a larger asset base thereby reducing the Company's ongoing charges ratio.

The issue of C Shares is designed to overcome the potential disadvantages for both existing and new investors which could arise out of an issue of further Ordinary Shares for cash. In particular:

the assets representing the Net Proceeds will be accounted for as a separate pool of assets until the Conversion Date; by accounting for the Net Proceeds separately, holders of existing Ordinary Shares will not be exposed to a portfolio containing substantial amounts of uninvested cash nor to the costs of investing the Net Proceeds;

subject to the Issues proceeding, the Net Asset Value of the existing Ordinary Shares will not be diluted by the expenses associated with the Issues which will be borne indirectly by the subscribers for C Shares, and in certain circumstances, the Manager; and

the basis upon which the C Shares will convert into Ordinary Shares is such that the number of Ordinary Shares to which the C Shareholders will become entitled will reflect the relative Net Asset Value per Share of the assets attributable to the C Shares and the Ordinary Shares. As a result, the Net Asset Value per Ordinary Share will not be adversely affected by Conversion.

Upon Conversion, the investments which were attributable to the C Shares will be merged with the Company’s existing portfolio of investments. The new Ordinary Shares arising on Conversion of the C Shares will rank pari passu, subject to the terms of the Articles, with the Ordinary Shares then in issue.

Conditions to the Scheme

The Scheme Issue is conditional upon, inter alia:

the passing of all resolutions to be proposed at the BEEP General Meetings to approve the Scheme and to appoint the Liquidators and upon any conditions of such resolutions being fulfilled;

the passing of the Scheme Resolutions; and

the UK Listing Authority agreeing to amend the listing of the BEEP Ordinary Shares to reflect their reclassification as Reclassified Shares for the purpose of implementing the Scheme.

Conditions to the Issue

The Issue, which is not underwritten, is conditional upon:

Admission having become effective on or before 8:00 a.m. on 27 November 2018 or such later time and/or date as the Company and Winterflood may agree (not being later than 8:00 a.m. on 31 December 2018);

the Issue Resolutions being passed at the General Meeting; and

the Placing and Offer Agreement becoming wholly unconditional (save as to Admission) and not having been terminated in accordance with its terms at any time prior to Admission.

The Scheme Issue and Issue are not conditional on each other.

IMPORTANT NOTICE

The information in this announcement is for background purposes only and does not purport to be full or complete. No reliance may be placed for any purpose on the information contained in this announcement or its accuracy or completeness. The material contained in this announcement is for information purposes only, is given as at the date of its publication (unless otherwise marked) and is subject to updating, revision and amendment. In particular, any proposals referred to herein are subject to revision and amendment.

This announcement is not for publication or distribution, directly or indirectly, in or into the United States (including its territories and possessions, any state of the United States and the District of Columbia), Canada, Australia, Japan, New Zealand, the Republic of South Africa or the Kingdom of Saudi Arabia or to US Persons (as defined below). The distribution of this announcement may be restricted by law in certain jurisdictions and persons into whose possession any document or other information referred to herein comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. Other than the United Kingdom, no action has been taken by the Company or Winterflood Securities Limited ("Winterflood") that would permit an offering of the C Shares or possession or distribution of the announcement of any other offering or publicity material relating to such shares in any jurisdiction where action for that purpose is required.

In member states of the European Economic Area ("EEA") other than the United Kingdom, this announcement is only addressed to and directed at persons who are "qualified investors" within the meaning of Article 2(1)(e) of the Prospectus Directive (Directive 2003/71/EC (and amendments thereto, including by Directive 2010/73/EU) and includes any relevant implementing measure in each Relevant Member State). Further, in relation to each member state in the EEA that has implemented the AIFM Directive, no C Shares have been or will be directly or indirectly offered to or placed with investors in that member state at the initiative of or on behalf of the Company, the Manager, the Investment Manager or Winterflood other than in accordance with the methods permitted in that member state.

This announcement does not contain or constitute an offer for sale of, or the solicitation of an offer or an invitation to buy or subscribe for, C Shares to any person including in the United States, Canada, Australia, Japan, New Zealand, the Republic of South Africa or the Kingdom of Saudi Arabia or in any jurisdiction to whom or in which such offer or solicitation is unlawful.

The C Shares will be offered and sold only outside the United States in offshore transactions as defined in and in reliance on Regulation S ("Regulation S") under the United States Securities Act of 1933 (as amended) (the "US Securities Act") to persons who are not, and are not acting for the account or benefit of, US persons as defined in Regulation S ("U.S. Persons"). The C Shares and the Ordinary Shares have not been and will not be registered under the US Securities Act or with any securities regulatory authority of any state or other jurisdiction of the United States, and may not be offered or sold within the United States or to U.S. Persons, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction in the United States. There will be no public offer of the Shares in the United States. The Company has not been and will not be registered under the United States Investment Company Act of 1940, as amended (the "US Investment Company Act"), and investors will not be entitled to the benefits of the US Investment Company Act.

The C Shares and the Ordinary Shares have not been approved or disapproved by the U.S. Securities and Exchange Commission, any state securities commission in the United States or any other U.S. regulatory authority, nor have any of the foregoing authorities passed upon or endorsed the merits of the offering of C Shares or the accuracy of adequacy of the Prospectus. Any representation to the contrary is a criminal offence in the United States and any re-offer or resale of any of the C Shares in the United States or to U.S. Persons may constitute a violation of U.S. law or regulation. Any person in the United States who obtains a copy of the Prospectus is requested to disregard it.

The offer and sale of C Shares has not been and will not be registered under the applicable securities laws of any state, province or territory of Canada, Australia, Japan, New Zealand, the Republic of South Africa or the Kingdom of Saudi Arabia. Subject to certain exceptions, the C Shares may not be offered or sold in Canada, Australia, Japan, New Zealand, the Republic of South Africa or the Kingdom of Saudi Arabia or to, or for the account or benefit of, any national, resident or citizen of Canada, Australia, Japan, New Zealand, the Republic of South Africa or the Kingdom of Saudi Arabia.

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 of 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, the Company's actual future financial results and operational performance may differ materially from the results and performance expressed in, or implied by, the statements. These factors include but are not limited to those described in the Prospectus. These forward-looking statements speak only as at the date of this announcement and cannot be relied upon as a guide to future performance. The Company, the Manager, the Investment Manager and Winterflood expressly disclaim any obligation or undertaking to update or revise any forward-looking statements contained herein to reflect actual results or any change in the assumptions, conditions or circumstances on which any such statements are based unless required to do so by the Financial Services and Markets Act 2000, the Prospectus Rules of the Financial Conduct Authority, the EU Market Abuse Regulation or other applicable laws, regulations or rules.

Prospective investors should be aware that any investment in the Company should not be regarded as short-term in nature, involves a degree of risk, and could result in the loss of all or substantially all of their investment. Results can be positively or negatively affected by market conditions beyond the control of the Company, the Manager or the Investment Manager which may be different in many respects from those that prevail at present or in the future, with the result that the performance of investment portfolios originated now may be significantly different from those originated in the past. Persons considering making such an investment should consult an authorised person specialising in advising on such investments.

Winterflood is authorised and regulated by the FCA. Winterflood is acting exclusively for the Company and no-one else in connection with the Scheme Issue and the Issue. Winterflood will not regard any other person as its client in relation to the subject matter of this announcement and will not be responsible to anyone other than the Company for providing the protections afforded to its clients, nor for providing advice in relation to the contents of this announcement or any transaction, arrangement or other matter referred to herein.

None of Winterflood, the Company, the Manger or the Investment Manager, or any of their respective parents or subsidiary undertakings, or the subsidiary undertakings of any such parent undertakings, or any of such person's respective directors, officers, employees, agents, affiliates or advisers or any other person ("their respective affiliates") accepts (save where required by law) 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 the information in this announcement (or whether any information has been omitted from the announcement) or any other information relating to the Company, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of this announcement or its contents or otherwise arising in connection therewith.

This announcement does not constitute a recommendation concerning the proposed Issues. Past performance is not a guide to future performance. Before acquiring any C Shares, persons viewing this announcement should ensure that they fully understand and accept the risks that are set out in the Prospectus. Information in this announcement or any of the documents relating to the Issues cannot be relied upon as a guide to future performance. The timetable may be influenced by a range of circumstances such as market conditions. There is no guarantee that the Issues will occur and you should not base your financial decisions on the Company's intentions in relation to the Issues or the information contained in this announcement. The contents of this announcement are not to be construed as legal, business or tax advice. Each prospective investor should consult his, her or its own legal adviser, financial adviser or tax adviser for legal, financial or tax advice.

Recipients of this announcement are reminded that C Shares may only be acquired on the basis of the information contained in the Prospectus.

INFORMATION TO DISTRIBUTORS

Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended ("Directive 2014/65/EU"); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing Directive 2014/65/EU; and (c) local implementing measures (together, the "MiFID II Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the MiFID II Product Governance Requirements) may otherwise have with respect thereto, the Shares have been subject to a product approval process, which has determined that the Shares are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in Directive 2014/65/EU; and (ii) eligible for distribution through all distribution channels as are permitted by Directive 2014/65/EU (the "Target Market Assessment").

Notwithstanding the Target Market Assessment, distributors should note that: the price of the Shares may decline and investors could lose all or part of their investment; the Shares offer no guaranteed income and no capital protection; and an investment in the Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Issues. Furthermore, it is noted that, notwithstanding the Target Market Assessment, Winterflood will only procure investors under the Issue who meet the criteria of professional clients and eligible counterparties.

For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of Directive 2014/65/EU; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the Shares.

Each distributor is responsible for undertaking its own target market assessment in respect of the Shares and determining appropriate distribution channels.

PRIIPS Regulation

In accordance with the Regulation (EU) No 1286/2014 of the European Parliament and of the Council of 26 November 2014 on key information documents for packaged retail and insurance-based investment products (PRIIPs) and its implementing and delegated acts (the "PRIIPs Regulation"), a key information document in respect of the C Shares has been prepared by the Manager and will be available to investors on the Company's website.

If you are distributing the C Shares, it is your responsibility to ensure that the relevant key information document is provided to any clients that are "retail clients".