17 Dec 2007 17:37
European Utilities Trust PLC (the `Company')
Recommended Proposals for the voluntary winding-up and reconstruction of the
Company
Introduction
On 25 July 2007 the Board announced proposals that the Company undertake a reconstruction under which Ordinary Income Shareholders and ZCP Shareholders would be given the opportunity to roll over their investment into shares in a newly incorporated Guernsey company (`Premier Renewable') with an investment policy of investing principally in companies that generate power from renewable sources, or that will be beneficiaries of the anticipated growth in this sector. The portfolio may include utilities that generate a significant proportion of their earnings from renewable energy and companies that are commercialising other renewable technologies.
The Company today announces that it is posting a Circular to Shareholders today providing further details of the proposals, which inter alia, are conditional on the approval by Shareholders at the EGMs. Notices convening the meetings are set out in the Circular. The Board is recommending that Shareholders vote in favour of all the Resolutions to be proposed at the meetings.
Background
Since the Company's launch in 1994 the Company's investment policy has been to invest in European utility companies. The sector has, over the period, generally proved to be a profitable area in which to invest but has also experienced considerable change, including significant consolidation with a resultant contraction of the Company's investment universe. The Board believe that a significant refocusing of the investment policy will both enhance the potential for future investment returns and appeal to a broader investor universe.
Premier Renewable's investment policy will be to invest principally in companies that generate power from renewable energy sources, or that will be beneficiaries of the anticipated growth in this sector. The portfolio may include utilities that generate a significant proportion of their earnings from renewable energy and companies that are commercialising other renewable technologies.
Premier Renewable's investments in renewable energy may encompass businesses generating power from wind, hydro, landfill gas, biomass, solar energy, marine currents, nuclear, energy crops, wave, waste vegetable oil and animal waste. Investments may be made in manufacturers, operators, energy suppliers and service providers. Premier Renewable will also consider investments in businesses utilising renewable technologies in sectors such as waste recycling, fuel cells, the manufacture of renewable related components and those companies providing services to the renewable energy industry. In addition, up to 15 per cent. of Premier Renewable's gross assets (at the time of the investment) may be invested in unquoted securities.
The Proposals
The key features of the Proposals are:
¢â€" the significant refocusing of the investment policy which will cover a much wider investment universe;
¢â€" Premier Renewable will be domiciled in Guernsey and as such will not be an investment trust or required to maintain investment trust status;
¢â€" the holders of ZCP Shares will be offered an opportunity to realise the whole or part of their investment for cash;
¢â€" subject to ZCP Shareholders making elections to roll over at least 20 per cent. of the ZCP Shares in issue into Premier Renewable ZCP Shares, the holders of ZCP Shares will be offered the opportunity to roll over the whole or part of their investment into Premier Renewable ZCP Shares;
¢â€" the holders of Ordinary Income Shares will be offered an opportunity to realise the whole or part (subject to certain limitations) of their investment for cash or to roll over the whole or part of their investment into Premier Renewable Ordinary Shares. The opportunity to realise the whole or part of their investment for cash will be limited to, in aggregate, 50 per cent. of the Ordinary Income Shares in issue and elections will be scaled back accordingly. Thus, in the event that all Ordinary Income Shareholders elect to realise their Ordinary Income Shares for cash the elections will be scaled back such that each Ordinary Income Shareholder will be entitled to receive cash in respect of 50 per cent. of the Ordinary Income Shares held by him/her, and Premier Renewable Ordinary Shares in respect of the balance of Ordinary Income Shares held;
¢â€" Premier Asset Management Guernsey ("PAM"), which is part of the same group of companies as Premier Fund Managers ("PFM"), will be the investment manager of Premier Renewable and will delegate certain of its duties and responsibilities to PFM which shall be responsible on behalf of PAM Guernsey for the identification and analysis of investments meeting the investment objective and strategy of Premier Renewable;
¢â€" the directors of Premier Renewable are Charles Wilkinson (Chairman), David Hagan, Robert Clinton (all of whom are Directors of the Company), David Copperwaite and David Staples.
Cash Option
Ordinary Income Shareholders who make an election for the Ordinary Share Cash Option in respect of some or all of their Ordinary Income Shares will, save as provided below, receive their capital entitlement on the liquidation of the Company in respect of such Ordinary Income Shares in the form of cash. The cash entitlement will equal the Ordinary Formula Asset Value. ZCP Shareholders who make an election for, or are deemed to have made an election for, the ZCP Share Cash Option in respect of some or all of their ZCP Shares will receive their capital entitlement on the liquidation of the Company in respect of such ZCP Shares in the form of cash. The cash entitlement will equal the ZCP Formula Asset Value.
ZCP Shareholders will be able to elect to receive cash for some or all of their ZCP Shares at a price which on Calculation Date would represent a gross redemption yield equivalent to a premium of 50 basis points over Treasury 4.25 per cent. 2011 gilt.
Where ZCP Shareholders make elections or are deemed to have made elections, for Premier Renewable ZCP Shares in respect of less than 20 per cent. of the ZCP Shares in issue, such ZCP Shareholders who have made elections for Premier Renewable ZCP Shares will be deemed to have elected for the ZCP Share Cash Option.
CREST accounts will be credited and cheques will be sent in respect of cash entitlements on or around 28 January 2008. Cheques will be sent to the registered address held by the Company's receiving agents at a Shareholder's own risk.
Benefits of the Proposals
The Board also believe that the Proposals offer Shareholders the following additional benefits:
¢â€" the opportunity to realise some or all (subject to certain limitations, in the case of Ordinary Income Shares), of their investment for cash through the liquidation;
¢â€" the opportunity to roll over some or all of their investment into a fund with an investment objective of providing Premier Renewable Shareholders with an attractive overall return to be achieved primarily through long term capital growth and a refocused investment policy whilst avoiding dealing costs on the reinvestment of their liquidation proceeds.
Default Provisions
Shareholders who do not make a valid election for cash will be deemed to have elected to receive Premier Renewable Ordinary Shares and/or Premier Renewable ZCP Shares (as the case may be).
Costs and Expenses of the Proposals
The Board has sought to limit the expenses of the Scheme to minimise the impact on shareholder value. The cost and expenses relating to the Proposals to be paid by the Company, including legal and other professional costs, the costs of printing this document and the costs relating to the liquidation of the Company, but excluding the costs associated with the realisation of the Company's assets and the retention required by the Liquidators, are estimated to amount to approximately ‚£195,000 excluding VAT (the Company has provided for this amount in full). A further ‚£350,000 is estimated to be payable by Premier Renewable in connection with its launch.
Interim Dividend
Based on current estimates of costs and revenues for this financial year, the Board anticipates that the Company will pay a final interim dividend on 21 January 2008 to Ordinary Income Shareholders on the register on 4 January 2008. This final interim dividend is expected to be declared on, or around, 19 December 2007.
Conditions of the Scheme
The Scheme is conditional on the passing of the Resolutions at the Shareholder Meetings and on the satisfactions of the other conditions listed in paragraph 11 of Part 3 of the Circular which include the approval of the applications for Admission of the Premier Renewable Ordinary Shares and the Premier Renewable ZCP Shares to be issued pursuant to the Scheme to listing on the Official List and to trading on the main market of the London Stock Exchange and the value of the Premier Renewable Fund being at least ‚£10,000,000.
The Scheme is conditional on:
¢â€" the passing of all the resolutions to be proposed at the Shareholder Meetings (or any adjournments thereof) and on any conditions of such resolutions (other than any such conditions relating to this paragraph) being satisfied;
¢â€" the Directors not having exercised their right, not to proceed with the Scheme; and
¢â€" the UK Listing Authority having agreed to admit the Premier Renewable Ordinary Shares and the Premier Renewable ZCP Shares (if any are issued pursuant to the Scheme) to the Official List and the London Stock Exchange having agreed to admit the Premier Renewable Ordinary Shares and Premier Renewable ZCP Shares (if any are issued pursuant to the Scheme) to trading on its main market for listed securities;
¢â€" the value of the Premier Renewable Fund being at least ‚£10,000,000;
¢â€" Premier Renewable obtaining consent under the Control of Borrowing (Bailiwick of Guernsey) Ordinance 1959, as amended, to the issue of the Prospectus.
Dealings and Settlement
The last day for trading in the Shares on the London Stock Exchange for normal settlement (in order to enable settlement prior to the Record Date) will be 14 January 2008. As from 15 January 2008, dealings should be for cash settlement only and will be registered in the normal way if the transfer, accompanied by all requisite documents of title, is received by the Registrar. The Record Date, being the date for determining which Shareholders are entitled to participate in the Scheme, is the close of business on 16 January 2008. The register of Shareholders will close on 16 January 2008.
Recommendation
The Board, which has been advised by Fairfax, considers the Proposals to be in the best interests of Shareholders as a whole. Accordingly, the Board unanimously recommends Shareholders to vote in favour of the resolutions to be proposed at the Shareholder Meetings, as the Directors intend to do in respect of their own beneficial holdings. In providing advice to the Board, Fairfax has taken into account the Board's commercial assessment of the Proposals.
The Board cannot and does not give any advice or recommendations to OrdinaryIncome Shareholders or ZCP Shareholders as to whether, or as to what extent,they should elect for any of the options under the Proposals. The choicebetween the options is a matter for each Shareholder to decide and will beinfluenced by their individual financial and tax circumstances and theirinvestment objectives. Shareholders should seek advice from their ownindependent financial adviser if they are in any doubt as to the action thatthey should take.EnquiriesCharles Wilkinson 01483 306 090 European Utilities Trust Nigel Sidebottom 01483 306 090 Premier Asset Management Paul Richards 020 7598 5368 Fairfax I.S. PLC Expected TimetableAll references are to UK time Record date for interim dividend on Ordinary 4 January 2008Income Shares
Latest time and date for receipt of Forms of 10.00 a.m., 10.05 a.m. and Proxy for the ZCP Shareholder Meeting, the 10.10 a.m. respectively on 15 Ordinary Income Shareholder Meeting and the First
January 2008EGM
Latest time and date for receipt of Form(s) of 11 a.m. on 16 January 2008 Election or TTE Instruction(s) from Ordinary
Income Shareholders and ZCP Shareholders
Record date for entitlements under the Proposals 5.00 p.m. on 16 January 2008 and closing of Registers
ZCP Shareholder Meeting 10.00 a.m. on 17 January 2008 Ordinary Income Shareholder Meeting * 10.05 a.m. on 17 January 2008 First EGM * 10.10 a.m. on 17 January 2008
Suspension of the listing and of trading in the 7.30 a.m. on 18 January 2008 Ordinary Income Shares and ZCP Shares on the
London Stock Exchange Payment date for interim dividend by 21 January 2008 Calculation Date as at 5.00 p.m. on 22 January 2008
Latest time and date for receipt of Forms of 10.00 a.m. on 23 January 2008 Proxy for the Second EGM
NAV, Ordinary FAV and ZCP FAV announced 24 January 2008 Second EGM 10.00 a.m. on 25 January 2008 Effective Date for implementation of the Scheme 25 January 2008and commencement of the Company's liquidation Issue and dealings commence in Premier Renewable 28 January 2008Ordinary Shares and Premier Renewable ZCP Shares to be issued pursuant to the Scheme Premier Renewable Ordinary Shares and Premier 28 January 2008Renewable ZCP Shares issued in uncertificated form under the Scheme credited to CREST accounts CREST accounts credited and cheques despatched in 28 January 2008respect of Cash Elections under the Scheme Latest date for despatch of definitive 5 February 2008certificates in respect of Premier Renewable Ordinary Shares and Premier Renewable ZCP Shares issued in certificated form pursuant to the Scheme
* or so soon thereafter as the previous meeting shall have concluded or been adjourned.
Definitions
The following definitions apply throughout this document unless the context requires otherwise: "Admission" the admission of the Premier Renewable Ordinary Shares and the Premier Renewable ZCP Shares to be issued pursuant to the Scheme to the Official List and to trading on the London Stock Exchange's market for listed securities becoming effective "Assumptions" the bases and assumptions on which statistics relating to Premier Renewable ZCP Share Cover has been calculated "Calculation Date" the day as at which the Company calculates the NAV, Ordinary Formula Asset Value and the ZCP Formula Asset Value for the purposes of the Scheme, expected to be the close of business on 22 January 2008, or such other date as the Company may determine "Board" or "Directors" the directors of the Company "Cash Options" the Ordinary Share Cash Option and the ZCP Share Cash Option "Circular" this document to be issued in connection with the Proposals "Company" European Utilities Trust plc "CREST" the relevant system (as defined in the CREST Regulations) in respect of which Euroclear is the Operator (as defined in the CREST Regulations) "CREST Regulations" the Uncertificated Securities Regulations 2001 (as amended) "Effective Date" the date on which the Scheme becomes effective (which is expected to be 25 January 2008) "Euroclear" Euroclear UK & Ireland Limited "Extraordinary General the First EGM and the Second EGM, as the Meetings" or "EGMs" context may require "Fairfax" Fairfax I.S. PLC "First EGM" the extraordinary general meeting of the Company, notice of which is set out in pages 57 to 60 of the Circular, or, where applicable, any adjournment thereof "Form(s) of Election" the form(s) of election issued by the Company for use by Shareholders in connection with the Scheme "FSA" the Financial Services Authority "Liquidators" the liquidator(s) for the time being of the Company, being initially the persons appointed jointly and severally at the Second EGM "Listing Rules" the listing rules of the UK Listing Authority made under section 73A of FSMA "London Stock Exchange" London Stock Exchange plc "NAV" or "Net Asset Value" the amount which would be payable to holders of Ordinary Income Shares on any given date if the Company were wound up and its assets distributed on that date after having made provision for all the Company's liabilities in accordance with the normal accounting policies of the Company and after providing for the expenses of the Proposals and the amount of the Liquidation Fund including the retention, or, as the context requires, the Net Asset Value or NAV per Ordinary "Ordinary FAV" or "Ordinary the lesser of: Formula Asset Value" a. 97.5 per cent. of the NAV per Ordinary Income Share as at the Calculation Date; and b. the NAV per Ordinary Income Share as at the Calculation Date as reduced to take account of any premium to the accrued capital entitlement of the ZCP Shares as at the Calculation Date to be paid to ZCP Shareholders who have elected for the ZCP Share Cash Option "Ordinary Income Shares" ordinary income shares of ‚£0.01 each in the capital of the Company "Ordinary Income Shareholders" holders of Ordinary Income Shares "Ordinary Share Cash Option" the option being made available under the Proposals for Ordinary Income Shareholders to receive cash equal to the Ordinary Formula Asset Value per Ordinary Income Share at the Calculation Date "Ordinary Income Shareholder the separate general meeting of holders of Meeting" Ordinary Income Shares, notice of which is set out on page 56 of the Circular, or, where applicable, any adjournment thereof "Overseas Ordinary Income Ordinary Income Shareholders who are resident Shareholders" in, or nationals of, jurisdictions outside the United Kingdom "Premier Renewable" Premier Renewable Energy Fund Limited "Premier Renewable Ordinary ordinary shares of no par value in the capitalShares" of Premier Renewable "Premier Renewable Ordinary the option being made available under the Share Option" Proposals for Ordinary Income Shareholders to receive Premier Renewable Ordinary Shares, in respect of some or all of their holding of Ordinary Income Shares, on the winding-up of the Company "Premier Renewable Shares" Premier Renewable Ordinary Shares and/or Premier Renewable ZCP Shares "Premier Renewable Shareholders" holders of Premier Renewable Shares "Premier Renewable ZCP Share shall represent a fraction where the numeratorCover" is equal to the gross assets of Premier Renewable on the relevant calculation date and the denominator is equal to the aggregate on the calculation date of (i) the aggregate Premier Renewable Final Capital Entitlement of the Premier Renewable ZCP Shares in issue on the relevant calculation date and (ii) the outstanding amounts payable by Premier Renewable under bank facilities and any borrowings ranking in priority to the Premier Renewable ZCP Shares "Premier Renewable ZCP Share the option being made available under the Option" Proposals for ZCP Shareholders, subject to ZCP Shareholders making elections to roll over at least 20 per cent. of the ZCP Shares in issue into Premier Renewable ZCP Shares, to receive Premier Renewable ZCP Shares, in respect of some or all of their holding of ZCP Shares, on the winding up of the Company
"Premier Renewable ZCP Shares" redeemable zero coupon preference shares of no
par value in the capital of Premier Renewable "Proposals" the proposals described in this document, including the proposed voluntary winding-up and the reconstruction of the Company "Prospectus" the prospectus issued by Premier Renewable dated 14 December 2007 prepared in accordance with the Listing Rules and the Prospectus Rules of the FSA "Record Date" the date on which Shareholders must be on the Register in order to participate in the Proposals, expected to be the close of business on 16 January 2008 "Register" the register of members of the Company "Resolutions" the resolutions to be proposed at the Shareholder Meetings and set out in the notices concerning the Shareholder Meetings at the end of this document "Scheme" the proposed scheme of reconstruction of the Company under section 110 of the Insolvency Act 1986 as set out in Part 3 of this document "Second EGM" the extraordinary general meeting of the Company, notice of which is set out on pages 61 and 62 of the Circular, or, where applicable, any adjournment thereof "Shares" Ordinary Income Shares and/or ZCP Shares (as the case may be) "Shareholder Meeting(s)" the ZCP Shareholder Meeting, the Ordinary Income Shareholder Meeting, and the EGMs (or any of them as the context may require) "Shareholders" holders of Ordinary Income Shares and/or ZCP Shares (as the case may be) "ZCP Share Cash Option" the option being made available under the Proposals for ZCP Shareholders to receive cash equal to the ZCP Formula Asset Value per ZCP Share at the Calculation Date "ZCP Shareholder Meeting" the separate general meeting of the holders of ZCP Shares, notice of which is set out on page 55 of the Circular, or, where applicable, any adjournment thereof "ZCP Shares" redeemable zero coupon preference shares of ‚£0.01 each in the capital of the Company having a redemption date of 31 December 2010 "ZCP Shareholders" holders of ZCP Shares "ZCP FAV" or "ZCP Formula an amount per ZCP Share which would constitute a Asset Value" gross redemption yield equivalent to a premium of 50 basis points over Treasury 4.25 per cent. 2011 gilt at the Calculation Date
EUROPEAN UTILITIES TRUST PLC