3 Feb 2017 15:42
3 February 2017
Terra Capital Plc ('Terra' or 'the Company')
Tender Offer
A Circular containing the terms of a tender offer for up to 10.0 per cent. of the issued share capital of the Company and a notice of an Extraordinary General Meeting to be held on 27 February 2017 is today being posted to Shareholders (the "Circular").
Capitalised terms and expressions shall have the same meanings as those attributed to them in the Circular.
A copy of the Circular will shortly be available for download from the Company's website www.terracapitalplc.com/company-reports
Introduction
As foreshadowed by the announcement made by the Company on 8 December 2016, during the last nine months of 2016 the Ordinary Shares traded at a discount in excess of 12 per cent. of the Net Asset Value per Ordinary Share. Pursuant to the discount control measures adopted by the Company in January 2016 this has triggered an obligation on the Company to implement a tender offer whereby each Eligible Shareholder (being a Shareholder on the Register on 1 April 2016) shall be offered the opportunity to tender up to 10 per cent. of the Ordinary Shares (if any) held by them on 30 December 2016 (being the Record Date for the Tender Offer) at a price equal to 97 per cent. of the Net Asset Value per Ordinary Share as at 31 December 2016 less the direct costs (including any realisation costs) of making the Tender Offer.
The Net Asset Value of Ordinary Shares as at 31 December 2016 was US$1.01 and this gives a Tender Price of US$0.98. Accordingly the Tender Offer now being proposed is in respect of a total of 6,829,924 Ordinary Shares (representing 10 per cent. of the issued share capital of the Company) at a Tender Price of US$0.98 per Ordinary Share. The Tender Price represents a premium of 14.62 per cent. to the middle market closing price of US$0.85 per Ordinary Share on 2 February 2017 being the latest practicable date before the publication of the Circular. Shareholders should note that the NAV per Ordinary Share may have increased or decreased since 31 December 2016. It is currently anticipated that the next announcement by the Company of the NAV per Ordinary Share will be made on or around 9 February 2017.
Each Eligible Shareholder is entitled to tender up to ten per cent. of the Ordinary Shares held by them on the Record Date (the "Basic Entitlement"). Eligible Shareholders are also entitled to tender a number of Ordinary Shares in excess of their Basic Entitlement (an "Excess Tender") if they so wish but any such Excess Tender shall only be satisfied to the extent that other Eligible Shareholders tender a number of Ordinary Shares that is less than their Basic Entitlement.
Eligible Shareholders are not obliged to tender any Ordinary Shares and if they do not wish to participate in the Tender Offer, they should not complete or return a Tender Form or submit a TTE Instruction in CREST.
The purpose of the Circular is to set out the terms of the Tender Offer and also to convene the Extraordinary General Meeting at which a Resolution necessary to approve and implement the Tender Offer will be proposed.
Details of the proposed Tender OfferGeneral
Under the terms of the Tender Offer, Eligible Shareholders are entitled to tender up to 10 per cent. of the Ordinary Shares held by them on the Record Date. In addition Eligible Shareholders are entitled to tender a number of Ordinary Shares in excess of this Basic Entitlement if they so wish but any such Excess Tender shall only be satisfied to the extent that other Eligible Shareholders tender a number of Ordinary Shares that is less than their Basic Entitlement. Requests for the Excess Tender will be satisfied on a pro-rata basis and all tender applications will be rounded down to the nearest whole number of Ordinary Shares.
The Tender Price will be paid to Eligible Shareholders in US Dollars and will be effected by the despatch of cheques or the crediting of CREST accounts as appropriate.
The Tender Offer is conditional, inter alia, on the Resolution necessary to implement the Tender Offer being duly passed at the EGM and the Company satisfying the distributable profits requirements under Isle of Man law at the time of the Tender Offer.
The full terms and conditions of the Tender Offer are set out in the Circular.
Details of how an Eligible Shareholder is able to tender Ordinary Shares is set out in the Circular.
Overseas Shareholders
The Tender Offer is not be available to Shareholders with a registered address in a Restricted Jurisdiction. Overseas Shareholders should note that they should satisfy themselves that they have fully observed any applicable legal requirements under the laws of their relevant jurisdiction if they tender Ordinary Shares in the Tender Offer. The attention of Shareholders with registered addresses outside the United Kingdom is drawn to the paragraph headed "Overseas Shareholders" in Part 2 of the Circular.
Takeover Code
Following discussions between the Company and the Takeover Panel, the Takeover Panel has agreed that, under Rule 37.1 of the Takeover Code and the notes to that Rule, City of London should be treated as an "innocent bystander" in relation to any increase in its holding of Ordinary Shares as a result of the Tender Offer and will not therefore be required to make an offer under Rule 9 as a result of any increase in its holding created by such Tender Offer.
Extraordinary General Meeting
The authorisation of the implementation of the Tender Offer, requires, inter alia, the passing of the Resolution which will be proposed at the Extraordinary General Meeting pursuant to which Shareholders shall be asked to approve an ordinary resolution to seek authority to make market purchases of Ordinary Shares pursuant to the Tender Offer.
The Board is making no recommendation to Shareholders in relation to participation in the Tender Offer. Whether or not Shareholders decide to tender their Ordinary Shares will depend, amongst other things, on their own individual circumstances, including their own tax position. Shareholders are recommended to consult an appropriately authorised independent adviser in determining whether or not to participate in the Tender Offer and to the extent of such participation.
The terms of the Tender Offer (including, without limitation, the times and dates referred to in the Circular) may be varied, amended or modified by the Company if the Company believes (in its sole discretion) that any such variation, amendment or modification is either non-material in nature, correcting what it believes to be a manifest error or is otherwise in the interests of all Shareholders. Any such variation, amendment or modification will be publicly announced as soon as practicable by way of an RIS.
Expected timetable of principal events
Entitlement Date* | 1 April 2016 |
Record Date* | 30 December 2016 |
Announcement of the Extraordinary General Meeting, publication of Circular and Tender Offer opens | 3 February 2017 |
Latest time and date for receipt of Forms of Proxy | 1.00 p.m. on 25 February 2017 |
Extraordinary General Meeting | 1.00 p.m. on 27 February 2017 |
Announcement of result of Extraordinary General Meeting | 28 February 2017 |
Latest time and date for receipt of Tender Forms and TTE instructions | 1.00 p.m. on 28 February 2017 |
Announcement of result of Tender Offer | 1 March 2017 |
Creation of assured payment obligations for Tender Offer proceeds for uncertificated Ordinary Shares | by 3 March 2017 |
Despatch of cheques for Tender Offer proceeds and balance share certificates for certificated Ordinary Shares | week commencing 6 March 2017 |
* In order to participate in the Tender Offer an Eligible Shareholder must have been on the Register on 1 April 2016. If that condition is satisfied the Shareholder is able to participate in the Tender Offer in respect of Ordinary Shares held on the Record Date, being 30 December 2016.
The dates and times specified are subject to change and will be notified by the Company through a Regulatory Information Service. All reference to time are to UK time.
For more information, please visit www.terracapitalplc.com or contact:
Galileo Fund Services Limited (Administrator)
Frazer Pickering
+44 1624 692600
Panmure Gordon (UK) Limited (Nominated adviser and corporate broker)
Paul Fincham or Jonathan Becher
+44 20 7886 2500
Terra Capital plc.
Ian Dungate, Director
+44 1624 692600
NOTES:
Terra Capital plc is an AIM quoted investment company focussed on generating high absolute returns while attempting to keep volatility to a minimum. The Company predominantly invests in under-researched and under-valued companies listed on Frontier Market stock exchanges. Terra Partners Asset Management Limited (the "Manager") targets investment companies that it believes are trading for less than their intrinsic worth and so, aside from any potential growth prospects, provide scope for capital appreciation as a result of a reversion towards their underlying value. Investments are also made in companies which are viewed as trading at fair value but which offer opportunities for growth at a reasonable price. The Manager believes many such 'value' opportunities can be found in Frontier Markets due to inherent market inefficiencies in such markets. The Manager utilises in-house teams of its own analysts, resident on the ground in areas of interest to investigate suitable opportunities rather than rely on third party research.