10 Nov 2014 14:07
TERRA CAPITAL PLC (the "Company")
10 November 2014
Proposed changes to investment management arrangements
The Company announces that after discussions with significant shareholders and its investment manager, Terra Partners Asset Management Limited (the "Investment Manager") agreement has been reached in principle (subject, where relevant, to contractual documentation, any requirement of AIM Rule 13 and Shareholder consent) to the following changes to the investment management arrangements and constitution of the Company:
1. The management fee payable to the Investment Manager shall be reduced with effect from 1 January 2015 from 2 per cent. per annum of the net asset value of the Company to 1.25 per cent of the net asset value of the Company and the level of performance fee that may become payable to the Investment Manager will be reduced from 20 per cent. of any increase in net asset value to 12 per cent.; provided that any performance fee shall be payable only to the extent that the Net Asset Value of the Share exceeds the Net Asset Value immediately following the Net Asset Value per Share when a performance fee was last paid; and
2. The discount control policy of the Company will be amended such that if as at 31 December in any calendar year the ordinary shares of the Company have, on average over the last nine calendar months (the "Discount Calculation Period") traded at a discount in excess of 12 per cent. (as opposed to 15 per cent. in the current policy) of the net asset value per ordinary share (calculated by reference to the published net asset value per ordinary the Directors will, subject to any legal or regulatory requirements, implement a tender offer pursuant to which each Long Term Shareholder shall be offered the opportunity to tender up to 10 per cent. of its ordinary shares at a price equal to 97 per cent. of the prevailing net asset value per ordinary share. A "Long Term Shareholder" is a person who was a Shareholder on 1 April of the year during the Discount Calculation Period in question. Shareholders may also be able to tender additional shares, but any such excess tenders above the basic entitlement will only be satisfied, on a pro rata basis, to the extent that other Shareholders tender less than their aggregate basic entitlement; and
3. Instead of the Company convening an extraordinary general meeting of the Company in 2017 to consider an ordinary resolution that the Company continue as presently constituted, it has been agreed that in June 2018, Shareholders will be offered an opportunity to exit (by way of tender or other restructuring or re-organisation) in respect to a part, or all, of their entire holding of ordinary shares at a price equal to the prevailing net asset value per ordinary share less costs. If, in total, more than a to be determined percentage of the ordinary share capital elect for this option, the exit opportunity will not proceed and instead the Company will be placed into liquidation; and
4. The investment policy of the Company will be amended to more clearly focus on investing into Frontier Markets.
The above proposals are all inter-conditional such that if any element is not agreed or, where relevant, Shareholder consent is not obtained then none of the proposals will be implemented.
It is anticipated that a circular containing full details of the above proposals (and containing a notice of an Extraordinary General Meeting at which resolutions necessary to implement the proposals will be proposed) will be dispatched to Shareholders in due course.
Enquiries
For more information, please visit www.terracapitalplc.com or contact
Galileo Fund Services Limited (Administrator)
David Parnell
+44 1624 692600
Panmure Gordon (UK) Limited (Nominated adviser and corporate broker)
Paul Fincham or Jonathan Becher
+44 20 3206 7000
Terra Capital plc.
Ian Dungate, Director
+44 1624 692600