Chenavari Toro Regulatory News (TORO)

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA, NEW ZEALAND OR JAPAN OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION

THIS ANNOUNCEMENT INCLUDES INSIDE INFORMATION

CHENAVARI TORO INCOME FUND LIMITED (the "Company")14 January 2019

Tender Offer for up to 5 per cent. of the issued share capital of the Company (excluding any Shares currently held in treasury) with potential sale of shares out of treasuryPublication of a circular and announcement of Extraordinary General Meeting

The Company announced on 22 November 2018 its intention to conduct an annual liquidity process. Following feedback from Shareholders, the Company announces its intention to repurchase annually, for the next five years, at least 10 per cent. of the Company issued share capital (excluding any Shares currently held in treasury), via a single or a series of tender offers. For the first year, the Company proposes two tender offers: the first one (''the Tender Offer'') of 5 per cent. to occur in January/February 2019, the second one of 5 per cent. to occur later in 2019 with another circular to be published in due course. After each tender offer, investors who did not participate in the tender offer will have the opportunity to participate in a reissuance of Treasury Shares.

The Company has today released a Circular ("the Circular"), setting out the background to, and details of the annual liquidity process and this first Tender Offer and associated Reissuance (together, "the Transaction"). The Circular also includes notice of an Extraordinary General Meeting.

The Tender Offer is being made for up to 5 per cent. of the Company's issued share capital (excluding any Shares currently held in treasury), to be acquired at a single price, being equal to 85.0 per cent. of the 31 December 2018 NAV per Share, to be announced on or around 22 January 2019. Shares acquired in the Tender Offer will be held as Treasury Shares by the Company. The Tender Offer will be available to Qualifying Shareholders on the Register as at the Record Date, which is 6.00 p.m. (London time) on 12 February 2019. Immediately following the announcement of the results of the Tender Offer, investors (who are not existing Shareholders who have participated in the Tender Offer) will have the opportunity to participate in the Reissuance, pursuant to which, Treasury Shares will be made available to investors for purchase.

Shareholders should read the Circular in full and not just rely on the summarised information set out in this announcement.

Background to and reasons for the annual liquidity process, Tender Offer and Reissuance

Since the IPO of the Company on 8 May 2015, the Shares have traded at an average 13.2 per cent. discount to NAV per Share, and the Shares are currently trading at a 22.4 per cent. discount to NAV per Share, which has not matched the Board's expectations. One of the underlying reasons for this persistent discount is the lack of liquidity in the Company's Shares, and more specifically the absence of sellers at current prices.

To seek to tackle this lack of liquidity, the Board, as announced on 22 November 2018, proposes to implement an annual liquidity process, pursuant to which, each year, for at least the next five years and subject to market conditions, Qualifying Shareholders will be invited to tender for repurchase by the Company, on a strictly pro rata basis, at least 10 per cent. of their Shares at a price representing a tighter discount to the prevailing NAV per Share each year, via one or more tender offers per year with the Shares acquired held as Treasury Shares. Following the announcement of the results of each such tender offer, a certain number of Treasury Shares would be made available for purchase by investors, willing to invest in size in the Company, something which is not currently possible due to the Company's historically low levels of liquidity.

The Tender Offer and Reissuance together represent the first implementation of such annual liquidity process, pursuant to which Qualifying Shareholders are invited to tender up to 5 per cent. of their holding of Shares, on a strictly pro rata basis, at a Tender Price equal to a 85.0 per cent. of the NAV per Share as at 31 December 2018. Treasury Shares will then be made available for purchase by investors (who are not existing Shareholders who have participated in the Tender Offer), subject to the combined aggregate effect of the Tender Offer and the Reissuance not being dilutive for remaining Shareholders. Another 5 per cent. tender offer will be proposed to Shareholders in due course in 2019 at a tender price equal to or higher than 85 per cent. of the NAV per Share as at 30 June 2019.

The Tender Offer is being made to enable those Qualifying Shareholders who wish to realise a portion of their investment in the Company to do so, whilst ensuring that continuing Shareholders who do not wish to tender their Shares are not disadvantaged.

The Board anticipates that these actions will help to address the liquidity issue and the persistent discount to NAV per Share at which the Shares have been trading.

The Tender Offer

The Board is proposing that the Company makes the Tender Offer to purchase up to 5 per cent. of the issued share capital (excluding any Shares currently held in treasury), at the Tender Price equal to 85.0 per cent. of the NAV per Share as at 31 December 2018.

The Tender Offer is open to all Qualifying Shareholders on the Company's share register on the Record Date. Each Qualifying Shareholder will be entitled to tender either all or a proportion of their Tender Offer Entitlement, being 5 per cent. of the Shares registered in his name at the Record Date, rounded down to the nearest whole number of Shares. There is no entitlement or opportunity for Qualifying Shareholders to sell more than their Tender Offer Entitlement under the Tender Offer.

Shares purchased under the Tender Offer will be held in treasury.

The Tender Offer is made on the terms and subject to the conditions set out in paragraph 2 of Part II of the Circular.

Shareholders who hold Shares in certificated form may only make a tender on the Tender Form, which is personal to the Shareholder(s) named on it and may not be assigned or transferred.

Shareholders who hold Shares in uncertificated form may only make a tender by way of an electronic tender in the form of a TTE instruction.

Unless the Board determines to vary the tender price in accordance with paragraph 9 of Part II of the Circular, a Tender Form and/or a TTE instruction once submitted cannot be withdrawn. To be valid, Tender Forms and/or a TTE instruction must be received by the Receiving Agent, and in the case of a TTE instruction must settle, no later than 1.00 p.m. on 12 February 2019.

Further information relating to the Tender Offer (including the Terms and Conditions of the Tender

Offer) is set out in Part II of the Circular.

The Reissuance

The Shares purchased by the Company under the Tender Offer will be held as Treasury Shares in accordance with the Law.

Immediately following the announcement of the results of the Tender Offer on the 14 February 2019, investors will have an opportunity, during London Stock Exchange trading hours on that day, to participate in the Reissuance, pursuant to which Treasury Shares will be made available to investors for purchase.

In the announcement of the Tender Offer results, the Company will disclose the maximum amount of Treasury Shares available to be issued at various price levels, starting with a floor share price equal to 80 per cent. of the 31 December 2018 NAV per Share.

The terms of the Reissuance will be formulated to ensure that the combined aggregate effect of the Tender Offer and the Reissuance are not dilutive for remaining Shareholders. This in effect means that the maximum number of Treasury Shares to be reissued will be lower than the number of Shares successfully acquired by the Company pursuant to the Tender Offer.

So far as reasonably practicable, the Company will endeavour to ensure that Treasury Shares will not be sold to Shareholders who participated in the Tender Offer.

Intentions of the Concert Party

By virtue of the Portfolio Manager having sole discretion over all investment decisions of the Managed Account, each of, (i) the Portfolio Manager, (ii) the Managed Account, (iii) certain other individuals (including one of the Company's directors, Roberto Silvotti) connected with, or employed by, the Chenavari Financial Group, and (iv) group companies of the Chenavari Financial Group, are together deemed to be acting in concert for the purposes of the Code (together the ''Concert Party''). As at 10 January 2019 (being the latest practicable date prior to publication of the Circular) the Concert Party in aggregate held 167,071,742 Shares, representing 51.072 per cent. of the voting rights in the Company. The Managed Account individually held 97,702,755 Shares, representing 29.867 per cent. of the voting rights in the Company.

As the members of the Concert Party hold more than 50 per cent. of the voting rights in the Company, no obligations normally arise from acquisitions by any member of the Concert Party. They may accordingly increase their aggregate interests in Shares without incurring any obligation under Rule 9 to make a general offer, although individual members of the Concert Party will not be able to increase their percentage interests in Shares through or between a Rule 9 threshold without Panel consent.

Depending upon the results of the Tender Offer and the Reissuance, the aggregate percentage interest of the Concert Party in the voting rights of the Company may increase, however, as noted above, as the aggregate holding of the Concert Party voting rights in the Company is above, and is intended to remain above, 50 per cent., the Concert Party will not incur any obligation under Rule 9 to make a general offer.

The members of the Concert Party (with the exception of the Managed Account) have confirmed to the Company that they do not intend to participate in the first Tender Offer. The Managed Account will participate in the first Tender Offer as may be required to ensure that its individual holding of Shares does not at any point equal or exceed 30 per cent. of the voting rights of the Company. This is to ensure that the Managed Account, on an individual basis, will not incur any obligation under Rule 9 to make a general offer. The Managed Account will not be entitled to participate in the first Reissuance.

Extraordinary General Meeting

The Tender Offer and the Reissuance are being conducted in accordance with the requirements of the Law and the Listing Rules (with which the Company has voluntarily committed to comply). In order to comply with these requirements, the Company is convening an Extraordinary General Meeting for 10.00 a.m. on 13 February 2019 to consider and, if thought fit, pass the Resolution to, (a) grant the Company the authority to undertake the Tender Offer and, (b) to reissue the Treasury Shares at a price below the prevailing published NAV per Share.

The Resolution must be passed either (i) on a show of hands by over 50 per cent. of those Shareholders present in person or by proxy and voting, or (ii) on a poll by over 50 per cent. of the Shares voted by those Shareholders present in person or proxy and voting, in each case, at the Extraordinary General Meeting. The Company will not purchase Shares pursuant to the Tender Offer unless the Resolution is duly passed.

Actions to be taken

Extraordinary General Meeting

Shareholders will find enclosed with the Circular a Form of Proxy for use at the Extraordinary General Meeting. Whether or not Shareholders intend to be present at the meeting, and whether or not Shareholders intend to participate in the Tender Offer, Shareholders are requested to complete and return the Form of Proxy. As an alternative to completing the enclosed Form of Proxy, CREST members can also appoint proxies by using the CREST electronic proxy appointment service and transmitting a CREST Proxy Instruction in accordance with the procedures set out in the CREST Manual.

Tender Offer

The procedure for tendering Shares depends on whether Shares are held in certificated or uncertificated form. Instructions are detailed in paragraph 3 of Part II of the Circular. Shareholders who do not wish to participate in the Tender Offer should not complete the Tender Form and will not be required to make a TTE instruction.

Further information

The Tender Offer will be financed solely from the Company's existing cash resources and shall be subject to the Law.

At 10 January 2019 (the latest practicable date prior to the publication of the Circular), the issued share capital of the Company was 327,128,149 Shares (excluding Shares currently held in treasury).

Recommendation

The Company's Directors consider that the Transaction is in the best interests of Shareholders as a whole and unanimously recommend that Shareholders vote in favour of the Resolution as they intend to do in respect of their own holdings of Shares.

The Directors are making no recommendation to Qualifying Shareholders in relation to participation in the Tender Offer itself. Whether or not Qualifying Shareholders decide to tender their Shares will depend, amongst other things, on their own individual circumstances, including their own tax position. Qualifying Shareholders are recommended to consult their duly authorised independent advisers in making their own decision.

Expected timetable of events

Posting of Circular

The Circular, which contains the full terms and conditions of the Tender Offer, instructions to Qualifying Shareholders on how to tender their Shares should they choose to do so, together with the tender form (where relevant), is being posted to Qualifying Shareholders.

A copy of the Circular will shortly be available to view on the Company's website at https://www.chenavaritoroincomefund.com and on the National Storage Mechanism (www.morningstar.co.uk/uk/NSM).

Enquiries:

Chenavari Investment Managers: Guy Goyard - 020 7245 4672, Kirstie Sumarno - 020 7259 3600J.P. Morgan Cazenove: William Simmonds - 020 7742 4000

This announcement is not an offer to sell or a solicitation of any offer to buy the securities of Chenavari Toro Income Fund Limited (the "Company") in the United States, Australia, Canada, Japan, or in any other jurisdiction where such offer or sale would be unlawful.

This communication is not for publication or distribution, directly or indirectly, in or into the United States of America. This communication is not an offer of securities for sale into the United States. The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States, except pursuant to an applicable exemption from registration. No public offering of securities is being made in the United States.

The information contained in this announcement is given at the date of its publication (unless otherwise marked) and is subject to updating, revision and amendment. In particular, the proposals referred to herein are tentative and are subject to material updating, revision and amendment. No reliance may be placed for any purpose whatsoever on the information or opinions contained in this announcement or on its completeness, accuracy or fairness.

The information in this announcement may include forward-looking statements, which are based on the current expectations and projections about future events and in certain cases can be identified by the use of terms such as "may", "will", "should", "expect", "anticipate", "project", "estimate", "intend", "continue", "target", "believe" (or the negatives thereon) or other variations thereon or comparable terminology. These forward-looking statements, as well as those included in any related materials, are subject to risks, uncertainties and assumptions about the Company, including, among other things, the development of its business, trends in its operating industry, and future capital expenditures and acquisitions. In light of these risks, uncertainties and assumptions, the events in the forward-looking statements may not occur. Each of the Company its affiliates and their respective officers, employees and agents expressly disclaim any and all liability which may be based on this announcement and any errors therein or omissions therefrom.

This announcement does not constitute or form part of, and should not be construed as, any offer or invitation or inducement for sale, transfer or subscription of, or any solicitation of any offer or invitation to buy or subscribe for or to underwrite, any share in the Company or to engage in investment activity (as defined by the Financial Services and Markets Act 2000) in any jurisdiction nor shall it, or any part of it, or the fact of its distribution form the basis of, or be relied on in connection with, any contract or investment decision whatsoever, in any jurisdiction.

J.P. Morgan Cazenove is authorised and regulated in the United Kingdom by the Financial Conduct Authority. J.P. Morgan Cazenove is acting as Corporate Broker to the Company and no one else in connection with the proposals described in this announcement, and will not be responsible to anyone other than the Company for providing the protections afforded to clients of J.P. Morgan Cazenove or for affording advice in relation to any transaction or arrangement referred to in this announcement. This announcement does not constitute any form of financial opinion or recommendation on the part of J.P. Morgan Cazenove or any of its affiliates and is not intended to be an offer, or the solicitation of any offer, to buy or sell any securities.