Downing Strate. Regulatory News (DSM)

8 March 2024  

Downing Strategic Micro-Cap Investment Trust plc

 LEI Number: 213800QMYPUW4POFFX69

Publication of a circular for a General Meeting

Proposed B Share Scheme

Downing Strategic Micro-Cap Investment Trust plc (LSE: DSM) (the "Company) is pleased to announce details of its proposals which seek to return 100 per cent. of Shareholders' capital in cash to Shareholders through a compulsory procedure involving a bonus issue, on a pro rata basis, of B Shares to all Shareholders followed by the redemption of such B Shares. The Board believe that this mechanism treats all Shareholders fairly and allows capital losses and any gains to be treated efficiently, within this current tax year.

The introduction of the B Share Scheme requires Shareholder approval, at a general meeting of the Company to be held at the offices of Dickson Minto, Dashwood House, 69 Old Broad Street, London EC2M 1QS at 2.00 p.m. on 3 April 2024 (the "General Meeting"). Subject to the Resolutions being passed at the General Meeting, the B Share Scheme will provide the Company with the ability to return cash to Shareholders at such time or times as the Board may, at its absolute discretion, determine. B Shares would be issued to Shareholders (at no cost to Shareholders) pro rata to their holdings of Ordinary Shares at the time of issue of the B Shares and, shortly thereafter, redeemed and cancelled in accordance with their terms for an amount not exceeding the amount treated as paid up on the issue of the B Shares.

A circular containing further detail of the proposed B Share Scheme and the notice convening the General Meeting has today been published by the Company (the "Circular"). A copy of the Circular will be submitted to the National Storage Mechanism and will shortly be available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism. The Circular will also be available on the Company's website (https://www.downingstrategic.co.uk/).

Proposed return of capital

Subject to the passing of the Resolutions at the General Meeting, the Board intends to return, in aggregate, a minimum of approximately £10 million to Shareholders via an initial issue and redemption of B Shares. B Shares of £1.00 each will be paid up from the Company's reserves and issued to all Shareholders by way of a bonus issue pro rata to their holdings of Ordinary Shares, currently expected to be on the basis of one B Share for every 5 Ordinary Shares held at the Record Date of 6.00 p.m. on 3 April 2024. The B Shares will be issued on 4 April 2024 and immediately redeemed at £1.00 per B Share. The Redemption Date in respect of this Return of Capital will be 4 April 2024. It is expected that the proceeds from the redemption of the B Shares, which is equivalent to approximately 21.5 pence per Ordinary Share (based on the current issued ordinary share capital of the Company), will be sent to Shareholders through CREST (in respect of uncertificated Shareholders) or via cheque (in respect of certificated Shareholders) by 9 April 2024.

The proposed initial Return of Capital represents approximately 33 per cent. of the Company's Net Asset Value as at 6 March 2024, being the latest published unaudited Net Asset Value prior to the publication of the Circular. The Board further believes that it will be able to return approximately a further £5.2 million (representing 17 per cent. of the Company's Net Asset Value as at 6 March 2024) by the end of June 2024 making a total return by then of over 50 per cent. of Shareholders' current capital. Realisations to date have proceeded well and liquidity has been achieved, ahead of Board expectations across the portfolio without detriment to the listed valuations.

Quote from the Chairman, Hugh Aldous:

"The Board has been considering the best options for Shareholders in this relatively sub-scale investment company and in current markets. It has been conferring with Shareholders and believes that a managed wind down of the Company together with the proposals which seek to return 100 per cent. cash to Shareholders, in a fair, equitable, efficient and orderly manner pursuant to the B Share Scheme, is in the best interests of Shareholders as a whole. It has been very pleased with the support that Shareholders have shown to date for these proposals. The Company continues to be on track to return over 50 per cent. of Shareholders current capital by the end of June 2024 and notes that realisations to date have proceeded well and liquidity has been achieved, ahead of Board expectations across the portfolio without detriment to the listed valuations."

Timetable

It is expected that the timetable will be as follows:

All redemption payments will be paid gross of tax.

Defined terms used in this announcement have the meanings given in the Circular unless the context otherwise requires

For further information please contact: