Last checked at 10 Dec 2010 11:01
CITY OF LONDON INVESTMENT MANAGEMENT COMPANY LIMITED
OPEN LETTER TO THE CHAIRMAN OF edinburgh dragon trust plc
City of London Investment Management Company Limited, a wholly owned subsidiary of City of London Investment Group PLC, wrote an open letter yesterday evening to the Chairman of Edinburgh Dragon Trust plc, Allan McKenzie. The text of the letter is set out below.
"Dear Mr McKenzie,
City of London Investment Management is interested in 19,354,114 Edinburgh Dragon Trust plc shares which represents 9.9% of the ordinary shares issued. We note the Board's plan to issue via a placing and open offer up to £50m of 3.5% convertible unsecured loan stock (CULS) and I am writing to confirm that we will vote against this issue.
We have discussed with you and your advisers the merits of Edinburgh Dragon adopting a more formal discount control policy. These discussions are especially pertinent at this point because the CULS will lead to a significant increase in the amount of stock issued by the Company. We are disappointed that the board has declined to take this opportunity to reassure shareholders with a more explicit discount control policy.
In each of the past three years the discount has traded at significantly over 10%. A double digit discount is not acceptable to us. In our opinion shareholders are entitled to expect action from the board if, in normal market conditions, the discount does trade in double digits for a prolonged period.
We are not against the CULS issue in principle. However we do believe that when raising more assets for the manager, the board should also strengthen those policies that will protect Dragon shareholders from possible discount widening in the future.
Yours sincerely,
Simon Westlake,
Business Development Executive"
For further information contact:
Simon Westlake, Business Development Executive | Simon Hudson / Andrew Dunn |
City of London Investment Management Company | Tavistock Communications |
Tel: 020 7711 0771 | Tel: 020 7920 3150 |
City of London Investment Group plc is a specialist asset management group that provides emerging market asset management products and services to institutional clients via its principal operating company City of London Investment Management Company Limited. The Group listed on the AIM market in 2006 and was admitted to the London Stock Exchange main list in October 2010. It is based in the UK and also has offices in the US, Singapore and Dubai. As at end November 2010, total funds under management were US$5.5 billion.