Last checked at 29 Nov 2011 07:00
29 November 2011 London Finance & Investment Group P.L.C. ("LFIG" or the "Company") Posting of Class 1 Circular in connection with Proposed Disposal of Investment Property
Further to the announcement made on 4 November 2011, the Company is pleased to announce that it has posted a Class 1 Circular to Shareholders (the "Circular") on Monday 28th November 2011 seeking Shareholder approval for the disposal of the Company's property in Rutland Gate, Knightsbridge, London (the `Property') for a cash consideration of £2.625 million (the "Disposal"). A notice of General Meeting is set out at the end of the Circular convening a General Meeting of the Company to be held at 30 City Road, London EC1Y 2AG at 3.30 p.m. on 21 December 2011.
The Circular is available from the offices of the Company and from its website, www.city-group.com.
The Circular includes the following additional disclosure in relation to the financial effects of the Disposal and also clearly sets out the Investment Policy.
Subject to Shareholder approval, the expected cash proceeds of the Disposal, net of transaction costs and tax will be £2,397,000, representing 34.9 per cent. of the Company's market capitalisation as at 25 November 2011, the last practicable date prior to the publication of this Document. The cash proceeds of the Disposal will be held on the Company's balance sheet as cash and cash equivalents pending reinvestment in line with the Company's investment policy, as set out below. The effect on earnings will be that the Company will no longer receive annual rental income from the Property of £53,000 per annum; this will be offset to the extent that a return can be made on new investments and the Net Cash Proceeds pending investment.
Investment Policy
The Company's investment policy is to invest in a range of "strategic" investments, a "general portfolio" consisting primarily of highly liquid stock market investments, both in equity instruments and bonds, and, at the Board's discretion, `other investments', typically property and other physical assets. This investment policy is designed to achieve the Company's objectives of capital growth in real terms over the medium term, while maintaining a progressive dividend policy.
Both "strategic" and "general portfolio" investments can be in any industry sector. "Strategic" investments are significant minority positions in UK small cap companies which can be either quoted or unquoted; to diversify risk, the policy is to maintain a number of such investments. Most such investments will be in shares of companies that are publicly traded but investments can also be made in publicly traded and untraded debt or equity instruments of companies that are strategic investments. The "general portfolio" aims to further diversify risk through a spread of investments and a target of between 20 and 30 holdings in some of the largest European quoted companies.
The intention is for between 30 per cent. and 70 per cent. of the overall investment portfolio with a maximum limit of 80 per cent. to be in "strategic" investments at the point of investment, with the balance of the portfolio, net of "other investments", to be in the "general portfolio". "Other investments" will be limited to 20 per cent. of the overall value of the investment portfolio, measured at the point of investment. No one "strategic investment" or "other investment" will represent more than 30 per cent. and 20 per cent. respectively of the value of all investments at the time of making such investment and no one "general portfolio" investment will represent more than 10 per cent. of the value of the "general portfolio" at the time of such investment.
Within these parameters, changes in strategic and other investments are decided on by the Board and changes to the general portfolio are decided on by the Board or, between Board meetings, by an Investment Committee of the Board. The investment guidelines within which the Investment Committee operates allow the Investment Committee discretion within the parameters set by the Investment Policy. The investment mix and level of borrowings are reviewed at each board meeting.
The Company's gearing is limited at or below 70 per cent. of the total value of investments.
Enquiries:
London Finance & Investment Group P.L.C.
Lloyd Marshall
Tel: 020 7448 8950
Beaumont Cornish Limited, Sponsor
Roland Cornish
Tel: 0207 628 3396
XLON