Last checked at 
14 May 2010 16:48
Guernsey 14 May 2010
PRINCESS PRIVATE EQUITY HOLDING LIMITED
(the "Company")
Notice of Annual General Meeting:
Proposed Change of Listing of the Company;
Proposed Conversion of the Company into an open-ended fund authorised under the Guernsey Collective Investment Schemes (Class B) Rules, 1990; and
Proposed Conversion of Ordinary Shares into Participating Shares.
The Board is putting forward resolutions at the Company's annual general meeting to be held on 16 June 2010 in order to seek shareholder approval for the Company's Conversion into an open-ended investment company and the related conversion and redesignation of the Ordinary Shares into Participating Shares and adoption of an amended and restated memorandum and articles of incorporation, the cancellation of the Company's Listing on the Official List of the UK Listing Authority and the discontinuance of trading on the London Stock Exchange. The proposals include the cancellation of the Company's Listing on the Frankfurt Stock Exchange.
Following the Conversion (if approved), as an open-ended investment company, the Company will cease to be eligible for listing on the Official List of the UK Listing Authority and to trading on the London Stock Exchange and it will cease to be listed and traded on the Frankfurt Stock Exchange. However, the Board is conscious that some Shareholders, while wishing to continue being supportive and long-term investors of the Company may not be permitted to hold securities in an unlisted company. The Board has therefore decided to apply for the listing of the Participating Shares, which will result on Conversion, on the Irish Stock Exchange.
Background to the Proposals
The Ordinary Shares of the Company were admitted to trading on the Frankfurt Stock Exchange on 13 December 2006 and on the London Stock Exchange on 1 November 2007. However, the Company's shares have been trading at a significant discount to the Net Asset Value. Over the past 12 months the average discount to Net Asset Value at which the Shares have traded is approximately 55 per cent. (based on prices of the Frankfurt Stock Exchange). On 11 March 2010, the Directors announced that they were considering a change in the capital structure of the Company and providing Shareholders with limited but regular liquidity within an open-ended investment company format.
The Directors and Investment Adviser have investigated a number of possibilities to address the discount with the goal of enhancing shareholder value. In deciding to ask Shareholders to approve the Proposals, the Directors have considered inter alia the following factors:
·; the discount of the Company's share price to the Net Asset Value;
·; the desire of certain Shareholders to value their holding of the Ordinary Shares at Net Asset Value rather than having to mark-to-market;
·; the value to existing Shareholders and potential investors of investing in a company that is listed on a EEA regulated market; and
·; the cost of maintaining listings on the London Stock Exchange and the Frankfurt Stock Exchange compared to a listing on the Irish Stock Exchange.
Accordingly, the Board considers that it would be in the interests of Shareholders to seek the Change of Listings to another EEA regulated market but with the likelihood of no active trading so that the shares can be valued at Net Asset Value, whilst offering Shareholders the prospect of some liquidity after Conversion through redeeming their Participating Shares following the expiry of the Lock-Up Period.
The Proposals
Shareholders will be asked to approve special resolutions in order for the Company to effect the Conversion, make the necessary consequential amendments to the Memorandum and Articles of Incorporation together with certain other amendments to assist with the administration of the Company (described further below), to convert the Ordinary Shares to redeemable Participating Shares (on the basis of one Participating Share for every one Ordinary Share) and to approve the cancellation of the listing on the UKLA Official List and trading on the London Stock Exchange.
Under Guernsey law, the Company may only convert from a closed-ended fund to an open-ended Class B investment fund if it receives consent from its Shareholders and the GFSC to do so. The Company has therefore made application to the GFSC to be approved as an open-ended Class B investment fund and the GFSC has given "in principle" consent to the Company converting to an open-ended Class B investment fund. This consent is conditional upon Shareholder approval of the Conversion by passing the Conversion Resolutions and on the lodgement of the final documents at the GFSC after the Annual General Meeting. If the Conversion Resolutions are passed, the Company will on 13 December 2010 file the requisite documents and apply for final consent from the GFSC for the conversion to an open-ended Class B investment fund under the POI Law and the Class B Rules.
After conversion to an open-ended Class B investment fund, the Company's Shares will be redeemable at the option of the Shareholders in certain circumstances. Under Guernsey company law, in order for shares to be able to be redeemed they must either be issued as, or converted to, "redeemable" shares. The Company's Ordinary Shares, as presently constituted, are not redeemable. Accordingly, a special resolution will be proposed at the Annual General Meeting to convert the Ordinary Shares into redeemable Participating Shares having the rights attached to them in the New Articles. In addition an ordinary resolution will be proposed to increase the capital of the Company by the creation of 100 management shares, which are non-voting and carry no right to dividends and will be issued to the Investment Manager. The management shares will be issued to provide flexibility to the Company on its liquidation to enable an expedient return of capital to Shareholders.
The changes to the Memorandum and Articles of Incorporation include the insertion of provisions necessary for the operation of the Company as an open-ended Class B investment fund; the removal of the requirement for directors to retire by rotation and the extension of the notice period for general meetings from 10 days to 14 days. In addition, the dividend provisions have been simplified to be consistent with the Guernsey Companies Law which gives authority to declare dividends to the directors.
Shareholders will also be asked to approve the cancellation of the listing of the Ordinary Shares on the Official List and the discontinuance of trading on the London Stock Exchange. Under the Listing Rules, it is a requirement that the cancellation be approved by at least 75 per cent of the Shareholders voting at a general meeting.
The Proposals include the De-Listing from the Frankfurt Stock Exchange and the ISE Admission which do not require shareholder approval. The ISE Admission is conditional on the Conversion. The Irish Stock Exchange has confirmed that, following Conversion, the Company will be eligible for admission to the ISE.
If the Conversion Resolutions are passed by the requisite majority at the Annual General Meeting, it is intended that formal requests for the De‑listing will be made with effect from 22 September 2010 in the case of the Frankfurt Stock Exchange, to comply with requirement of the Frankfurt Stock Exchange and to allow a smooth transition for holders of depositary interests, and with effect from 16 December 2010 in the case of the Official List to the UK Listing Authority.
Application will be made to the Irish Stock Exchange for the admission of the Participating Shares to the ISE Official List and to trading on the main market of the ISE with effect from the date of the De-listing from the London Stock Exchange which is expected to be on 16 December 2010. However, it is not expected that an active secondary market in the Participating Shares on the ISE will develop.
Dealings
Shareholders will be able to carry out dealings in the Company's Ordinary Shares on the Frankfurt Stock Exchange up to 21 September 2010 and on the London Stock Exchange up to 10 December 2010. The register of members will close at 5.00 p.m. on the last day of dealings on the London Stock Exchange and the London Listing will be suspended on the next following business day (13 December 2010).
Unwinding of Co-ownership Interests upon De-listing from the Frankfurt Stock Exchange
In December 2006 the Company entered into an agreement with, inter alia, Clearstream Banking AG ("Clearstream") pursuant to which Clearstream had issued a global bearer certificate ("Global Bearer Certificate") for the purpose of good delivery of the Ordinary Shares on the Frankfurt Stock Exchange. Shareholders trading their shares on the Frankfurt Stock Exchange hold Co-ownership Interests in the Global Bearer Certificate. This agreement shall terminate subsequent to the de-listing from the Frankfurt Stock Exchange and consequently the Global Bearer Certificate shall be unwound. Pursuant to the terms and conditions of the Global Bearer Certificate Clearstream shall as of the de-listing from the Frankfurt Stock Exchange request from the holders of the Co-ownership Interests instructions through their depositary banks stating to whom the Ordinary Shares being represented by the Co-ownership Interests shall be delivered, respectively, the address to which the certificate evidencing the registration of the previous holder of the Co-ownership Interests in the Company's register shall be mailed by the Company's Registrar and Transfer Agent. In case such instruction is not received by 15 November 2010, the respective Co-ownership Interests will be subject to a compulsory conversion into Ordinary Shares.
The Conversion
The Directors believe that the investment objective of the Company, namely to provide Shareholders with capital growth in the mid to long-term by investing in private equity, private debt, other private market investments and other alternative investments, can be better achieved by the Conversion of the Company into an open-ended investment fund. There will be no change to the Company's investment objective and strategy or to its investment policy.
Under the Conversion, the Ordinary Shares will be converted into Participating Shares which, like the Ordinary Shares, carry the right to any dividends and to attend and vote at any general meeting, but also have certain redemption rights. No net redemption will be permitted during the Lock-Up Period; i.e. redemptions will be permitted to the extent that they do not exceed subscriptions of new Participating Shares on the same Redemption Day. The Lock-Up Period will extend for as long as is necessary for the Company to ensure compliance with any Credit Facility provided always that the Lock-Up Period may not be longer than three years from the date of Conversion. Thereafter, Participating Shares may be redeemed quarterly, subject to a redemption gate in the event that redemption requests, on a net basis, represent in aggregate more than the Applicable Rate of the number of Participating Shares outstanding at the end of the relevant quarter.
In addition, the Directors may declare a suspension or postponement of redemptions in exceptional cases where circumstances so require and provided the suspension is justified having regard to the interest of Shareholders. The Directors may also in certain situations compel the redemption of a Shareholder's Participating Shares. As an open-ended fund following Conversion, investors will also be able to subscribe for new Participating Shares in the Company on a quarterly basis.
Annual General Meeting
The Proposals are conditional upon the approval of Shareholders and, accordingly, Resolutions to approve the Proposals will be proposed at the Annual General Meeting to be held at 10.30 a.m. on 16 June 2010 at Third Floor, Tudor House, Le Bordage, St Peter Port, Guernsey.
The other items of business to be proposed at the Annual General Meeting are to receive and consider the financial statements of the Company for the year ended 31 December 2009, to re-elect certain directors who are retiring by rotation or otherwise, to approve the re-appointment of the auditors, PricewaterhouseCoopers CI LLP, as auditors of the Company and to authorise the Directors to fix their remuneration, and to authorise the Company to make market purchases of Ordinary Shares in the Company. The Directors do not intend to use the market purchase authority unless the Conversion Resolutions are not passed and in that event will do so only if they consider that such use would be for the benefit of the Company and Shareholders as a whole.
Circular
A circular (the "Circular") has today been posted to shareholders which includes the Notice of Annual General Meeting (the "Notice"). The Circular and the Notice can also be found on the Company's website at http://www.princess-privateequity.net/.
Copies of the Circular have also today been submitted to the UKLA and will shortly be available for inspection at the UKLA's Document Viewing Facility, which is situated at:
Financial Services Authority
25 The North Colonnade
Canary Wharf
London E14 5HS
EXPECTED TIMETABLE OF PRINCIPAL EVENTS
| 2010 | |
| Latest time and date for receipt of Forms of Instruction and Proxy for Annual General Meeting | 5.00 p.m. on 1 June |
| Latest time and date for receipt of Forms of Proxy for Annual General Meeting | 10.30 a.m. on 14 June |
| Annual General Meeting | 10.30a.m. on 16 June |
| Last day of dealings in the Ordinary Shares deliverable in the form of Co-Ownership Interests on the Frankfurt Stock Exchange | 21 September |
| Cancellation of listing and trading on the prime market of the Frankfurt Stock Exchange becomes effective | 22 September |
| Last day of dealings in the Ordinary Shares on the London Stock Exchange | 10 December |
| Close of register | 5.00 p.m. on 10 December |
| Suspension of listing of the Ordinary Shares on London Stock Exchange | 8.00 a.m. on 13 December |
| Conversion of the Company to an open-ended authorised fund and of the Ordinary Shares to Participating Shares | 13 December |
| Cancellation of listing on the UKLA Official List and trading on the main market of the London Stock Exchange | 8.00 a.m. on 16 December |
| Admission to the Irish Official List and to trading on the main market of the Irish Stock Exchange | 16 December |
DEFINITIONS
| "AGM" or "Annual General Meeting" | the annual general meeting of the Company convened for 16 June 2010, notice of which is set out at the end of this document and any adjournment thereof |
| "Applicable Rate" | a rate to be applied after the end of the Lock-Up Period at (i) 2.5 per cent. during the first eight calendar quarters and (ii) 5 per cent. thereafter |
| "Board" or "Directors" | the directors of the Company for the time being |
| "Business Day" | any day where banks in London, Guernsey, Germany and Ireland are open for business (excluding Saturdays and Sundays) and/or such other day or days as the Directors may from time to time determine |
| "Change of Listings" | the cancellation of the Company's entire issued share capital from the Official List of the UK Listing Authority and to trading on the London Stock Exchange and the Frankfurt Stock Exchange and subsequently for the Company's entire issued share capital to be admitted to the Irish Official List and to trading on the main market of the Irish Stock Exchange |
| "Class B Rules" | The Guernsey Collective Investment Scheme (Class B) Rules, 1990, as amended from time to time |
| "Conversion" | the conversion of the Company into an open-ended authorised fund under the POI Law and the Class B Rules and the conversion of the Ordinary Shares into Participating Shares |
| "Conversion Resolutions" | Special Resolutions 8, 9 and 10 to be proposed at the Annual General Meeting to give effect to the Proposals |
| "Co-ownership Interests" | a beneficial interest in an Ordinary Share comprised in a Global Bearer Certificate issued by Clearstream Banking AG |
| "Credit Facility" | any outstanding credit facility between the Company as borrower and one or more parties as lender |
| "De-listing" | (a) the cancellation of the listing of the Ordinary Shares on the Official List and the discontinuance of trading of the Ordinary Shares on the London Stock Exchange's main market for listed securities and/or (b) the cancellation of listing on the Frankfurt Stock Exchange (as the context may require) |
| "EEA" | the European Economic Area |
| "GFSC" | the Guernsey Financial Services Commission |
| "Investment Adviser" | Partners Group AG |
| "Investment Manager" | Princess Management Limited |
| "Irish Official List" | the official list of the ISE |
| "Irish Stock Exchange" or "ISE" | the Irish Stock Exchange Limited |
| "ISE Admission" | the admission of the Participating Shares (issued and to be issued) to the Irish Official List and to trading on the main market of the Irish Stock Exchange |
| "Listing Rules" | the rules and regulations made by the FSA under Part VI of FSMA, as amended from time to time |
| "Lock-Up Period" | the period from 13 December 2010 to 30 June 2012 (inclusive) or such longer period not exceeding three (3) years as the Directors may determine is necessary to comply with the terms of the Credit Facility as may be notified to the Shareholders from time to time |
| "London Stock Exchange" or "LSE" | the London Stock Exchange plc |
| "Management Share" | a designated non-voting share in the capital of Company of EUR 1.00 each and designated as a Management Share and having the rights provided for under the New Memorandum and Articles |
| "Net Asset Value" or "NAV" | in relation to the Company, the value of the assets of the Company less its liabilities determined in accordance with the accounting principles adopted by the Company from time to time |
| "New Memorandum and Articles" | the amended and restated memorandum and articles of incorporation of the Company proposed to be adopted pursuant to Resolution 9 at the AGM |
| "Ordinary Shares" or "Shares" | as the context may require, ordinary shares of no par value in the capital of the Company, and, following Conversion, the Participating Shares |
| "Participating Share" | a designated voting participating redeemable share in the Company of EUR 0.001 each and having the rights provided for under the New Memorandum and Articles |
| "Partners Group" | the Investment Adviser and/or the Investment Manager, as the context requires |
| "Princess" or the "Company" | Princess Private Equity Holding Limited |
| "POI Law" | The Protection of Investors (Bailiwick of Guernsey) Law, 1987, as amended from time to time |
| "Proposals" | the proposals for the adoption of the New Memorandum and Articles, De-listing, the Conversion and the ISE Admission |
| "Redemption Day" | the first Business Day of January, April, July and October, and/or such other day or days as the Directors may from time to time determine |
| "Shareholders" | holders of Shares, including where the context requires, Shares deliverable in the form of Co-Ownership Interests |
| "UK" or "United Kingdom" | the United Kingdom of Great Britain and Northern Ireland |
| "UKLA" or "UK Listing Authority" | the FSA acting in its capacity as the competent authority for the purposes of Part VI of FSMA |
| "UKLA Official List" | the official list of the UK Listing Authority |
About Princess
Princess is an investment holding company founded in 1999 and domiciled in Guernsey. It invests, inter alia, in private equity and private debt investments. The Company is advised in its investment activities by Partners Group AG, a global private markets investment management firm with over CHF 25 billion in investment programs under management in private equity, private debt, private real estate and private infrastructure. Princess aims to provide shareholders with long-term capital growth. Princess is traded on the Frankfurt Stock Exchange (ticker symbol: PEY1) and on the London Stock Exchange (ticker symbol: PEY). Further information: www.princess-privateequity.net
Contacts
Princess Private Equity Holding Limited:
princess@princess-privateequity.net
www.princess-privateequity.net
Registered Number: 35241
Media enquiries:
Partners Group AG
Tamara Krebs
Communications
Tel.: +41 41 768 85 26
tamara.krebs@partnersgroup.com
www.partnersgroup.com
This document does not constitute an offer to sell or a solicitation of an offer to buy or subscribe for any securities and neither is it intended to be an investment advertisement or sales instrument of Princess Private Equity Holding Limited. The distribution of this document may be restricted by law in certain jurisdictions.
Persons into whose possession this document comes must inform themselves about, and observe any such restrictions on the distribution of this document. In particular, this document and the information contained therein is not for distribution or publication, neither directly nor indirectly, in or into the United States of America, Canada, Australia or Japan.
This document may have been prepared using financial information contained in the books and records of the product described herein as of the reporting date. This information is believed to be accurate but has not been audited by any third party. This document may describe past performance, which may not be indicative of future results. No liability is accepted for any actions taken on the basis of the information provided in this document.