JPE.L Regulatory News (JPE)

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This announcement is not an offer to sell, or a solicitation of an offer to acquire, securities in the United States or in any other jurisdiction in which the same would be unlawful. Neither this announcement nor any part of it shall form the basis of or be relied on in connection with or act as an inducement to enter into any contract or commitment whatsoever.

24 May 2019

JPMorgan Elect plc

Publication of Prospectus

On 21 January 2019, JPMorgan Elect plc (the "Company") published a circular (the "Circular") convening a General Meeting and Class Meetings for each class of the Company's shares (the "Meetings") in connection with, inter alia, a proposal for the Company to issue new shares of the Company (the "New JPM Elect Shares") (the "Issue") in connection with a scheme of reconstruction of El Oro Ltd ("El Oro") (the "Scheme"), subject to the final terms of the Scheme being agreed. All resolutions, as set out in the notices of the Meetings in the Circular, were passed by the Company's shareholders ("Shareholders") at the respective Meetings on 15 February 2019.

The terms of the Scheme have now been agreed, in materially the same form as those set out in the Circular and the Company has today published a prospectus in connection with the Issue (the "Prospectus").

A copy of the Prospectus will shortly be submitted to the National Storage Mechanism and will shortly be available for inspection at www.morningstar.co.uk/uk/NSM. The Prospectus will also shortly be available on the Company's website at www.jpmelect.co.uk where further information on the Company can also be found.

Details of the Scheme

The Issue relates solely to the Scheme and it is expected that the Scheme will be implemented in accordance with the expected timetable set out in this announcement.

Under the terms of the Scheme, El Oro will be wound up on 20 June 2019 by means of a members' voluntary liquidation pursuant to a scheme of reconstruction and eligible shareholders of El Oro ("El Oro Shareholders") will have the opportunity (subject to the passing of certain resolutions to be proposed at a meeting of the El Oro Shareholders in relation to the relevant Scheme (the "El Oro Scheme Resolutions") to realise all or part of their investment in El Oro shares as cash and/or to roll over all or part of their investment in El Oro shares into any combination of New JPM Elect Shares.

Subject to the passing of the El Oro Scheme Resolutions, the Rollover Fund will be transferred to the Company in connection with the Scheme pursuant to the Transfer Agreement.

Under the terms of the Scheme, eligible El Oro Shareholders who make a valid election for New JPM Elect Shares will receive:

● Managed Growth Shares issued at a price equivalent to the net asset value ("NAV") per Managed Growth Share plus the Issue Premium (as described below);

● Managed Income Shares issued at a price equivalent to NAV per Managed Income Share plus the Issue Premium (as described below); and/or

● Managed Cash Shares issued at a price equivalent to NAV per Managed Cash Share plus the Issue Premium (as described below).

The "Issue Premium" will be set at a level which is not less than 0.65 per cent. and not more than 1.0 per cent. In the event that the value of assets represented by the interests of eligible El Oro Shareholders electing to roll their El Oro shares into the Company is less than £40 million then the Issue Premium will be set at 1.0 per cent. In the event that the value of such assets exceeds or equals £40 million then the Issue Premium will reduce on a straight line basis such that if the value of such assets equals £50 million or more the Issue Premium will be set at 0.65 per cent.

To the extent that an eligible El Oro Shareholder does not make a valid election in respect of all or part of their holding of El Oro Shares, they will be deemed to have elected for Managed Income Shares for that proportion of their holding of El Oro Shares.

The Company's assets on completion of the Scheme will continue to be managed in accordance with the Company's existing investment objectives and policies.

The maximum number of New JPM Elect Shares which may be issued by the Company pursuant to the Issue is up to 8,000,000 Managed Growth Shares, up to 55,000,000 Managed Income Shares and up to 55,000,000 Managed Cash Shares. These figures are based on the assumption that all El Oro Shareholders are eligible to participate in the Scheme and elect to roll into the same class of JPM Elect Shares and do not make elections to receive cash. Investors should not take the foregoing maximum numbers of New JPM Elect Shares as being indicative of the actual number of New JPM Elect Shares that will be issued pursuant to the Issue.

The Company's costs in connection with the Scheme will not be borne by existing Shareholders. As a result, and to the extent that New JPM Elect Shares are issued under the Scheme, the Board considers that Shareholders should benefit from the spreading of fixed costs over a wider asset base, and a correspondingly lower ongoing charges ratio, and potentially greater liquidity in each class of shares in which New JPM Elect Shares are issued.

The New JPM Elect Shares are denominated in Sterling. The Issue is not being underwritten.

On completion of the Scheme, assuming that all El Oro Shareholders are eligible to participate and elect to receive New JPM Elect Shares in respect of all their El Oro Shares, had the Issue occurred on 22 May 2019 (being the "Latest Practicable Date"), the Company's net assets would have increased by a minimum of £42.7 million.

Further details relating to the entitlements of El Oro Shareholders under the Scheme and details of the Transfer Agreement which provides for, inter alia, the transfer of the fund comprising the pool of assets attributable to the El Oro shares in respect of which elections are made for New JPM Elect Shares (the "Rollover Fund") from El Oro to the Company are set out in Part 7 of the Prospectus and in the circular published by El Oro on 24 May 2019 in relation to the Scheme (the "El Oro Scheme Circular").

Conditions of the Issue

The Issue is conditional, among other things, upon:

(i) the passing of all the necessary El Oro Scheme Resolutions to be proposed at the El Oro Scheme Meeting (or any adjournment thereof) and all conditions to such El Oro Scheme Resolutions (excluding any condition relating to the passing of any other El Oro Scheme Resolution) being fulfilled;

(ii) the directors of El Oro not resolving to abandon the Scheme; and

(iii) the Financial Conduct Authority (the "FCA") having agreed to admit the New JPM Elect Shares to be issued pursuant to the Scheme to the premium segment of the Official List and London Stock Exchange plc (the "London Stock Exchange") having agreed to admit such New JPM Elect Shares to trading on the main market for listed securities of the London Stock Exchange.

Certain El Oro Shareholders which, together, represent approximately 55.4 per cent. of the voting share capital of El Oro, have undertaken to vote in favour of the El Oro Scheme Resolutions and have undertaken to elect for New JPM Elect Shares under the Scheme in respect of 27,560,643 El Oro Shares in aggregate, representing approximately 43.6 per cent. of the issued share capital of El Oro. These undertakings are conditional upon the Scheme not lapsing and expire on 30 June 2019.

Subject to the satisfaction of the conditions of the Scheme, El Oro will be placed into members' voluntary liquidation and the Scheme will take effect. It is expected that the Scheme will become effective on the Scheme Effective Date, whereupon, provided the conditions of the Issue are fulfilled and El Oro Shareholders have elected to receive any combination of New JPM Elect Shares under the Scheme, the Rollover Fund will be transferred to the Company in connection with the Scheme pursuant to the Transfer Agreement.

Settlement and dealings

Applications will be made to the FCA and the London Stock Exchange for the New JPM Elect Shares to be admitted to the premium segment of the Official List and to trading on the London Stock Exchange's main market for listed securities ("Admission"). Subject to the precise timing of the implementation of the Scheme, it is expected that Admission will become effective, and that dealings in such New JPM Elect Shares will commence, at 8.00 am on 24 June 2019.

All New JPM Elect Shares will be issued, fully paid, with effect from the date of Admission, and will be delivered in uncertificated form (unless otherwise requested). It is expected that CREST accounts will be credited with the New JPM Elect Shares on 24 June 2019 (or as soon as practicable thereafter).

Dealings in the New JPM Elect Shares in advance of the crediting of the relevant CREST accounts or the issue of certificates will be at the risk of the persons concerned.

Costs of the Issue

The costs of the Company's participation in the Scheme will be met, in the first instance, by the Issue Premium at which the New JPM Elect Shares will be issued. To the extent that the Issue Premium does not cover these costs, JPMorgan Funds Limited ("JPMF") has agreed to meet any such shortfall.

To the extent that the Issue Premium relating to a class of JPM Elect Shares amounts to more than the costs of the Scheme borne by that class, such surplus will accrue to the benefit of the holders of shares in that class. For these purposes, the costs of the Scheme borne by the Company will be allocated to each class of JPM Elect Shares in proportion to the value of the assets to be transferred to each pool pursuant to the Scheme. As a result of these arrangements, the Scheme is not expected to result in any decrease in the NAV per share of any of the Company's share classes.

Transaction taxes, stamp duty/stamp duty reserve tax (if any) payable on the transfer of assets pursuant to the Scheme to the Company shall be borne by the Company.

JPMF has also agreed to meet the Company's costs incurred in relation to the Scheme in the event that the Company ceases to be a rollover option for the El Oro Shareholders.

Overseas investors

The issue of New JPM Elect Shares to persons not resident in, or who are outside, the United Kingdom may be affected by the laws or regulatory requirements of relevant jurisdictions. Restricted Persons should inform themselves about and observe any applicable legal requirements.

It is the responsibility of Restricted Persons to satisfy themselves as to the full observance of the laws of the relevant jurisdiction in connection with the Issue, including obtaining any governmental or other consents which may be required, compliance with all necessary formalities and the payment of any issue, transfer or other taxes due to such jurisdiction.

Those El Oro Shareholders with a registered address in the United States, Canada, Australia, Japan, New Zealand or the Republic of South Africa should note that they are not eligible to receive the Prospectus and will receive cash out of the liquidation fund to be retained by the liquidators in the context of the Scheme unless they satisfy the Company's directors and the directors of El Oro that it is lawful for the Rollover Fund to issue New JPM Elect Shares to them under any relevant overseas laws and regulations.

Expected timetable

Each of the times and dates in the expected timetable may (where permitted by law) be extended or brought forward without further notice and in particular the dates relating to the Scheme and the issue of the New JPM Elect Shares are provisional only. If any of the above times and/or dates change, the revised time(s) and/or date(s) will be notified to Shareholders by an announcement through a Regulatory Information Service. All references to times in this document are to London time.

Capitalised terms used but not defined in this announcement will have the same meaning as set out in the Prospectus.

For further information: