JEFI.L Regulatory News (JEFI)

12 May 2022

LEI: 213800RLXLM87NO26S30

Jupiter Emerging and Frontier Income Trust plc

(the "Company" or "JEFIT")

Publication of General Meeting Circular

Further to the announcement made by the Company on 14 April 2022, the Board of Directors of the Company (the "Board") announces that it has today published a circular (the "Circular") setting out proposals for a Members' Voluntary Liquidation of the Company (the "Proposal").

The Circular includes notice of a general meeting to be held at the offices of Jupiter Asset Management Limited, The Zig Zag Building, 70 Victoria Street, London SW1E 6SQ, United Kingdom on 13 June 2022 at 3.30 p.m (the "General Meeting"). A resolution will be put to Shareholders to seek their approval of the Proposal (the "Resolution").

For further information please contact:

Jupiter Asset Management Limited (Company Secretary)

Magnus Spence

020 3817 1000

investmentcompanies@jupiteram.com

Peel Hunt LLP (Broker)

Liz Yong / Luke Simpson

020 7418 8900

Link Group (Registrar)

Scott Daly

0371 664 0300

enquiries@linkgroup.co.uk

Capitalised terms used in this announcement have the meanings given to them in the Circular published by the Company today.

EXPECTED TIMETABLE

* Actual date to be determined by the Liquidators.

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 the Circular are to London times.

Letter from the Chairman

Recommended Members' Voluntary Liquidation of the Company

1 Background

The Company today announces Proposals to place the Company into voluntary liquidation.

The current market capitalisation of the Company is below £60 million, which the Directors believe to be lower than is desirable for an investment trust of this kind. JEFIT was launched in May 2017 and, although the subsequent investment performance of the Company has been respectable in the context of the emerging and frontier markets into which it invests, the Redemption Facility offered by the Company has resulted in a significant shrinkage of its capital base since the onset of the Covid-19 pandemic. In view of the consequent small size of the Company and the risk of further shrinkage through future redemptions, the Directors believe that, for JEFIT to be viable, it would be necessary to grow the Company through a combination of capital appreciation and the issuance of new shares. Given current market conditions, in particular the effect on markets of Russia's invasion of Ukraine, the Directors believe that for the foreseeable future there are limited opportunities for the growth of the Company. Accordingly, the Board is proposing that the Company be wound up, such that Shareholders are provided with a full cash exit less costs. Whilst the possibility of a rollover option was considered and a number of proposals for rollover vehicle candidates were reviewed, the Board has concluded that it is not in the interests of Shareholders to offer a rollover option. 

The proposed winding up of the Company requires the approval of Shareholders at a General Meeting that is being convened pursuant to the Circular.

The General Meeting will be held at the offices of Jupiter Asset Management Limited, The Zig Zag Building, 70 Victoria Street, London SW1E 6SQ, United Kingdom on 13 June 2022 at 3.30 p.m. The formal notice convening the General Meeting is set out at the end of the Circular. Shareholders are asked to subject a proxy vote in advance of the meeting.

The Board believes that approval of a Members' Voluntary Liquidation at the General Meeting is in the best interests of the Company and Shareholders as a whole and recommends that you vote in favour of the Resolution at the General Meeting.

The purpose of the Circular is to provide Shareholders with details of the Proposals and to set out the reasons why the Directors are recommending that Shareholders vote in favour of the Resolution at the General Meeting.

2 Members' Voluntary Liquidation

Under the proposed Members' Voluntary Liquidation, Shareholders will be able to realise their investment in the Company by way of a voluntary liquidation of the Company. The Members' Voluntary Liquidation is conditional upon Shareholder approval of the Resolution at the General Meeting. If the Resolution is not passed, the Company shall continue in operation until other proposals can be put forward. 

If the Resolution to place the Company into Members' Voluntary Liquidation is passed, the Liquidators will work with Jupiter to realise the Company's portfolio. It is expected that the Liquidators will make an initial cash distribution, on or around 31 July 2022, as described at paragraph 3 below and will thereafter continue to work with Jupiter to realise the remaining investments and distribute any further proceeds to Shareholders. It is not possible to indicate how long this process may take, particularly given that some holdings, as detailed below, are in respect of jurisdictions that are currently incapable of being traded. So far as possible, the Liquidators and Jupiter will seek to ensure that the Company's tax status as an investment trust is maintained throughout this process, although this cannot be guaranteed.

Subject to Shareholder approval, Gareth Rutt Morris and Andrew Martin Sheridan of FRP Advisory Trading Limited will be appointed as joint liquidators to the Company and their remuneration shall be determined by the Company. Upon the appointment of the Liquidators, all powers of the Board will cease, the Board will stand down, the listing of Shares on the Official List will be cancelled and the Liquidators will be responsible for the affairs of the Company until it is wound up. Following their appointment, the Liquidators will make an initial cash distribution, discharge the liabilities and satisfy all the creditors of the Company, divide the surplus assets of the Company among the Shareholders according to their respective rights and interests in the Company by way of further distributions and eventually dissolve the Company.

3 Shareholder distributions

Assuming the Resolution is passed, it is currently expected that at least 90 per cent. of the Company's portfolio will be realised for cash within three weeks of the General Meeting. In this case, the Liquidators expect to make an initial distribution of the cash proceeds of the liquidation of the Company's portfolio, less the costs of the Proposals and the amount attributable to the Liquidation Fund, described below, on or around 31 July 2022 (the "Initial Distribution").

A small minority of the assets of the Company is relatively illiquid and it may therefore take some months to fully realise the portfolio. In particular, as per the announcement published on 3 March 2022, the Company holds Russian securities which are currently incapable of being traded due to international sanctions in response to the war in Ukraine. It is not known when or indeed if such regulations will be revised to permit the Company to dispose of these Russian securities. However, as these Russian securities are held at nil value for accounting purposes this will have a minimal impact on the value of the distributions to Shareholders relative to the Company's reported NAV as at the date of the Circular.

The Liquidators will retain sufficient funds in the Members' Voluntary Liquidation to meet the current, future and contingent liabilities of the Company, including the costs and expenses (inclusive of VAT, if applicable) of the liquidation not already paid at the point of liquidation and an additional retention of £100,000 for unknown contingencies (the "Liquidation Fund"). 

If the Proposals are approved, Shareholders will be provided with a full cash exit less costs. Accordingly, the Board has exercised its discretion to suspend the Redemption Facility.

Once the Liquidators have realised the Company's assets, made the Initial Distribution, satisfied the claims of creditors of the Company and paid the costs and expenses of the liquidation, it is expected that the Liquidators would make a final distribution to Shareholders. This final distribution, if any, would be made solely at the discretion of the Liquidators.

All Shareholders on the Register on the Record Date (being 6.00 p.m. on 10 June 2022) will be entitled to the distributions from the Liquidators, including the Initial Distribution.

Nothing in the Proposals contained in the Circular shall impose any personal liability on the Liquidators or either of them.

4 Interim dividend

In order to retain investment trust status for the period between 1 October 2021 and 12 June 2022, the Company intends to pay the Interim Dividend on or around 24 June 2022 to Shareholders on the Register on 6 June 2022. The amount and precise timing of the payment of such dividend will be announced via a Regulatory Information Service in due course.

5 Costs and expenses of the Proposals

The costs and expenses of the Proposals will be borne by the Company and are expected to be approximately £240,000 (including VAT) in aggregate.

6 The Company's service providers

The Company is taking steps to ensure that the appointments of certain service providers will terminate should the Resolution be passed.

It is intended that Jupiter, as AIFM of the Company, will be retained to assist the Liquidators with the sale of the Company's assets, given its expertise and knowledge of the portfolio. On 10 March 2022, the Company served protective notice of termination on the AIFM in accordance with the Investment Management Agreement between the Company and the AIFM. Assuming the Resolution is passed, Jupiter has agreed to waive its entitlement to management fees under the Investment Management Agreement after the end of the current calendar quarter on 30 June 2022. For the purpose of calculating the final management fee due for this quarter, the Company's Net Asset Value will be calculated as at the date of the General Meeting.

In addition, the Company's Registrars, Link Group, and the Company's Custodian, JP Morgan, will be retained by the Company during the liquidation period.

The Company has served notice on the Company's remaining service providers, such that their appointments will terminate should the Resolution be passed.

7 Suspension and cancellation of listing and trading of the Shares

The Register will be closed at 6.00 p.m. on 10 June 2022. Application will be made to the FCA for the suspension of the listing of the Shares on the Official List and application will be made to the London Stock Exchange for suspension of trading in the Shares at 7.30 a.m. on 13 June 2022.

The last day for dealings in the Shares on the London Stock Exchange on a normal rolling two-day settlement basis will be 8 June 2022. After that date, dealings should be for cash settlement only and will be registered in the normal way if the transfer, accompanied by the documents of title, is received by the Registrars by close of business on 10 June 2022. Transfers received after that time will be returned to the person lodging them and, if the Resolution is passed, the original holder will receive any proceeds from distributions made by the Liquidators.

If the Resolution is passed, the Company will make an application for the cancellation of the admission of the Shares to listing on the Official List and to trading on the Main Market immediately following the General Meeting with the cancellation expected to take effect at 8.00 a.m. on 15 June 2022.

After the liquidation of the Company and the making of the final distribution to Shareholders (if any), existing certificates in respect of the Shares will cease to be of value and any existing credit of the Shares in any stock account in CREST will be redundant.

8 General Meeting

The implementation of the Members' Voluntary Liquidation will require Shareholders to vote in favour of the Resolution at the General Meeting. The Resolution is being proposed to:

· place the Company into liquidation and to appoint the Liquidators;

· fix the remuneration of the Liquidators on the basis of time spent by them;

· authorise the Liquidators to proceed to wind up the Company in accordance with the provisions of the Insolvency Act 1986; and

· direct that the Company's books and records be held to the order of the Liquidators.

You will find set out at the end of the Circular a Notice convening the General Meeting to be held at 3.30 p.m. on 13 June 2022. The Notice includes the full text of the Resolution.

The Resolution to be proposed at the General Meeting will be proposed as a special resolution and, in order to be passed, will require the approval of 75 per cent. or more of the votes cast at the General Meeting, whether in person or by proxy.

In accordance with the Articles, all Shareholders present in person or by proxy shall upon a show of hands have one vote and upon a poll shall have one vote in respect of each Share held. In order to ensure that a quorum is present at the General Meeting, it is necessary for two Shareholders entitled to vote to be present, whether in person or by proxy (or, if a corporation, by a representative).

The Board is pleased to be able to give Shareholders the opportunity to attend the General Meeting in person at the address set out in the notice convening the General Meeting at the end of the Circular.

9 Taxation

The following paragraphs, which are intended as a general guide only, are not exhaustive, and do not constitute legal or tax advice, are based on current UK legislation and published HMRC practice, both of which are subject to change, possibly with retrospective effect. They summarise certain limited aspects of the UK tax treatment of the cash distributions made to Shareholders in connection with the Members' Voluntary Liquidation of the Company, and they relate only to the position of individual and corporate Shareholders who hold their Shares beneficially as an investment and (except in so far as express reference is made to the treatment of non-UK residents) who are resident (and in the case of individuals domiciled) in the UK for UK tax purposes.

Shareholders are advised to take independent advice in relation to the tax implications of any matters set out in the Circular and to consult an appropriate professional tax adviser.

A Shareholder who receives a distribution of cash in the course of the Members' Voluntary Liquidation should be treated as making a disposal or part disposal of his Shares for the purposes of UK taxation of chargeable gains which may, depending on such Shareholder's individual circumstances (including the availability of exemptions, reliefs and allowable losses), give rise to a chargeable gain or allowable loss for the purposes of UK taxation of chargeable gains.

Shareholders who are not resident in the UK (excluding, in the case of an individual Shareholder, Shareholders who are only temporarily non-resident in the UK) for UK tax purposes should not be subject to UK tax on chargeable gains on a disposal, or part disposal, of Shares unless such Shares are used, held or acquired for the purposes of a trade, profession or vocation carried on in the UK through a branch or agency or, in the case of a corporate Shareholder, through a permanent establishment. Such Shareholders may be subject to foreign tax on any gain under local law.

The UK tax code contains provisions which permit HMRC to counteract tax advantages arising from certain transactions in securities by (among other things) treating some or all of the proceeds of capital disposals as distributions of income. Generally speaking, these provisions should not apply where it can be shown that the transactions in question were entered into for genuine commercial reasons and did not involve as one of their main objects or purposes the obtaining of a tax advantage. Shareholders are advised to take independent advice as to the potential application of these and other anti-avoidance provisions in the light of their own particular circumstances. Application has not been made to HMRC for clearance as to these matters.

10 Recommendation to Shareholders

The Board considers that the Proposals are in the best interests of the Company and its Shareholders as a whole. Accordingly the Board unanimously recommends that Shareholders vote in favour of the Resolutions to be proposed at the General Meeting. The Directors intend to vote in favour of the Resolutions in respect of their holdings of Shares, amounting to 470,973 Ordinary Shares in aggregate (representing approximately 0.79 per cent. of the issued share capital of the Company as at the date of the Circular).

The Investment Adviser, as investment manager or adviser to certain Jupiter-managed investment funds, exercises discretion over, and intends to vote in favour of the Resolution in respect of, 7,065,000 Ordinary Shares in aggregate (representing approximately 11.82 per cent. of the issued share capital of the Company as at the date of the Circular).

John Scott

(Chairman)