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13 Aug 2010 14:16
ANNOUNCEMENT
MATRIX INCOME & GROWTH 2 VCT PLC
13 AUGUST 2010
RECOMMENDED PROPOSALS TO MERGE THE SHARE CLASSES OF THE COMPANY AND MAKE CONSEQUENTIAL AMENDMENTS TO THE ARTICLES, RENEW AND INCREASE THE AUTHORITY TO ISSUE AND BUY-BACK SHARES, AMEND THE INVESTMENT POLICY OF THE COMPANY AND CANCEL THE SHARE PREMIUM ACCOUNT OF THE COMPANY.
SUMMARY
The board of directors of the Company ("Board"), which is managed by Matrix Private Equity Partners LLP ("Matrix Private Equity"), is pleased to advise that they are today writing to shareholders with proposals to consolidate the share classes of the Company into one class of share ("Share Merger").
The Share Merger, if approved, is expected to become effective on 10 September 2010. The proposal requires the approval of resolutions to be proposed to shareholders of the Company at an extraordinary general meeting and separate class meetings to be held on 9 September 2010 ("the Meetings").
It is also proposed to amend the investment policy of the Company in relation to its uninvested cash, renew and increase share issue and share repurchase authorities and cancel the share premium account of the Company. The proposals require the approval of resolutions to be proposed to shareholders of the Company at the Meetings.
BACKGROUND
The Company was originally launched in 2000 and raised funds pursuant to an issue of ordinary shares of 1p each ("Ordinary Shares"). Approval from shareholders was obtained in 2005 to create and issue C ordinary shares of 1p each ("C Shares"), this fund being largely raised in 2009. It was agreed that the Company should raise this additional capital through a separate class of shares to enable the Company to raise additional capital on a basis which would be entirely neutral to any changes in net asset value of the Ordinary Shares fund.
The Ordinary Shares and C Shares have been managed as separate funds as envisaged at the time of launch of the C Shares. It was, however, provided that a merger of the Ordinary Shares and C Shares would take place when the Board believed it to be in the best interests of shareholders for the funds to be merged.
The portfolios of both the Ordinary Shares fund and the C Shares fund are now established and are pursuing a common investment policy. Separate share classes can also result in additional annual expenses in relation to registrars, auditors and other fixed fees. The Board, therefore, believes it to be in the best interests of both the shareholders and the Company to merge the Ordinary Shares and C Shares into one class of share to achieve simplification and to reduce administrative and other costs.
The Board therefore propose to merge the share classes which will provide the Company with cost savings and strategic benefits.
THE SHARE MERGER
The Share Merger will be effected by first merging the Ordinary Shares into the C Shares and then redesignating the C Shares as Ordinary Shares (this being referred to herein as "New Ordinary Shares").
The Share Merger will be completed by reference to the relative NAVs of the Ordinary Shares fund and the S Shares fund (adjusted for dividends to be paid) as at close of business on 9 September 2010.
MATRIX PRIVATE EQUITY PARTNERS LLP AND THE MANAGEMENT, ADMINISTRATION AND PERFORMANCE INCENTIVE ARRANGEMENTS
Matrix Private Equity is the Company's investment manager and it has also assumed the responsibilities of providing administrative services in place of Matrix-Securities Limited following a reorganisation of the Matrix Group. Matrix Private Equity will continue to be the investment manager to the Company following the Share Merger.
The management and administration arrangements for the Company with Matrix will, remain the same in all material respects, the only material changes being that the numerous existing annual management and administration agreements for the Company and Matrix will be amalgamated into one agreement across the merged Share class and that those payments presently made quarterly in arrears will be made quarterly in advance. This is to reflect the fact that the administration services originally provided by Matrix-Securities are now provided by Matrix Private Equity following a re-organisation of the Matrix group structure.
In connection with the two different management incentive schemes, the underlying objective has been to retain the existing arrangements so that Shareholders are not disadvantaged and, on this basis, the Board considers that this is best achieved by the existing performance incentive arrangements continuing in place within the merged Share class.
AMENDMENT TO THE INVESTMENT POLICY
Shareholders will be aware that the income earned on the Company's funds awaiting investment, currently held in cash and lower risk money market funds, has fallen to very low levels, adversely affecting the level of income dividends shareholders can receive. The Board believes that the current investment policy on these funds constrains them from considering a wider range of alternatives to the current holdings in money-market funds. Accordingly, shareholders are being asked to approve a change in investment policy relating to the funds awaiting investment.
The Board will consider whether the Company's cash resources could be invested in a wider range of opportunities, to aim to achieve a higher rate of income return, while still aiming to safeguard the Company's capital.
ISSUE OF SHARES AND CANCELLATION OF SHARE PREMIUM ACCOUNT
The Board also proposes to renew and increase the authorities to issue and buy-back shares, and to cancel the share premium account of the Company.
EXPECTED TIMETABLE
Share Merger NAV Reference Date close of business on 9
September 2010 Extraordinary General Meeting 12.30 pm on 9 September 2010 Ordinary Share Class Meeting 12.40 pm on 9 September 2010 C Share Class Meeting 12.45 pm on 9 September 2010
Record Date and Share Merger NAV Reference Date close of business on 9 for the Sharere Merger
September 2010 Effective Date for the Share Merger 10 September 2010 Amendment to the listing of Shares 13 September 2010 CREST accounts re-credited 14 September 2010 Certificates for the New Ordinary Shares 24 September 2010dispatched
FURTHER INFORMATION
Shareholders will receive a copy of a circular convening the Extraordinary General Meeting and separate class meetings to be held on 9 September 2010 at which shareholders will be invited to approve resolutions in connection with the proposals. A copy of the circular for the Company has also been submitted to the UK Listing Authority and will be shortly available for inspection at the UK Listing Authority's Document Viewing Facility which is situated at:
Financial Services Authority25 The North ColonnadeCanary WharfLondon E14 5HSTelephone: 0207 066 1000
For further information, please contact:
Investment Manager to the CompanyMatrix Private Equity Partners LLPMark WignallTelephone: 020 3206 7000Administrator to the CompanyMatrix Private Equity Partners LLP/Matrix-Securities LimitedRobert Brittain/Ross LaceyTelephone: 020 3206 7000Solicitors to the CompanyMartineauKavita PatelTelephone: 0800 763 2000
MATRIX INCOME & GROWTH 2 VCT PLC