Reconstruction and Winding Up

19 May 2006 10:20

Allianz Dresdner Income Gwth IT PLC19 May 2006 ALLIANZ DRESDNER INCOME GROWTH INVESTMENT TRUST PLC 19 May 2006 RECOMMENDED PROPOSALS FOR THE RECONSTRUCTION AND WINDING UP OF THE COMPANY INTRODUCTION The Board of Allianz Dresdner Income Growth Investment Trust plc announcesdetailed proposals for the reconstruction of the Company, proposed to becomeeffective shortly before its planned winding up date. The Company's Articlesrequire the Directors to put a resolution to Shareholders by no later than 30June 2006 to consider the winding up or reconstruction of the Company. TheDirectors, with their advisors, have reviewed the courses of action available tothe Company, which included a straight liquidation. In reaching its decision,the Board took account of the costs of a straight liquidation of the Company.The difference between the cost of such a transaction and the costs of theProposals is marginal and, in the Board's opinion, is outweighed by the benefitsof providing roll-over options to Shareholders. The Directors have thereforeconcluded that it is in the interests of Shareholders as a whole to propose ascheme of reconstruction, comprising a members' voluntary liquidation of theCompany pursuant to Section 110 of the Insolvency Act 1986, together withoptions for Shareholders to elect for: (a) shares in an existing investment trust, The Merchants Trust PLC, managed by RCM (UK); and/or (b) realising all of their investment in the Company for cash, as suits each Shareholder's personal investment requirements. ZDP Shareholders will also have the option, in combination with either ofoptions (a) and (b) above, to elect for shares in a sub-fund of an existing openended investment company, The Allianz PIMCO Sterling Total Return Fund (managedby PIMCO, a member of Allianz Global Investors). Shareholders who make no valid election and all Overseas Shareholders will bedeemed to have elected for the Cash Option. THE MERCHANTS OPTION Shareholders who elect for the Merchants Option will receive new MerchantsShares. As further described in the paragraph entitled "Calculation of Value forthe Purposes of the Proposals" below, new Merchants Shares will be issued at aprice equal to 100.6 per cent. of the net asset value per Merchants Share (withdebt valued at market value and including accrued but undeclared net income) asat the Calculation Date or, if higher, 90 per cent. of the middle market priceper Merchants Share as at the Calculation Date. There is a limit on the number of Merchants Shares which may be issued pursuantto the Scheme of 10,200,183 shares. If this limit would otherwise be exceeded,the excess will be deemed to be elections for the Cash Option and all electionsfor the Merchants Option will be scaled down accordingly. New Merchants Shares will be allotted, conditional on admission to listing onthe Official List and trading on the London Stock Exchange's market for listedsecurities, prior to the opening of business on 30 June 2006. Dealings in thenew Merchants Shares are expected to commence at 8.00 a.m. on 30 June 2006. The new Merchants Shares will rank pari passu in all respects with the existingMerchants Shares. Merchants Shares qualify as an investment for ISAs and PEPtransfers. THE STERLING TOTAL RETURN FUND OPTION ZDP Shareholders who elect for the Sterling Total Return Fund Option willreceive shares (of no par value) in the Sterling Total Return Fund. The SterlingTotal Return Fund is a sub-fund of EIF, and aims to maximise total return,consistent with preservation of capital and prudent investment management,primarily through investment in fixed income securities issued by corporate,government, supranational institutions and local regional agencies, as well asany other security. The Sterling Total Return Fund may invest internationallyalthough investment will predominantly be in the United Kingdom and Europe.Sterling Total Return Fund Shares qualify as an investment for ISAs and PEPtransfers. As at noon on 16 May 2006 (the latest practicable date prior to thepublication of the Circular), the unaudited net assets of the Sterling TotalReturn Fund were £201.1 million and the portfolio comprised 235 holdings.(Source: RCM (UK)). Sterling Total Return Fund Shares will be issued at a price equal to the netasset value per Sterling Total Return Fund Share as at noon on 29 June 2006,calculated in accordance with the FSA Regulations, as further described in theparagraph headed 'Calculation of Value for the Purposes of the Proposals'. Noinitial charge will be levied in relation to the Sterling Total Return FundShares issued under the Scheme nor do the Directors believe that any dilutionlevy will be applied. THE CASH OPTION Those Shareholders who have elected (or who are deemed to have elected) for theCash Option will receive cash in respect of their Shares for which an electionfor the Cash Option has been or is deemed to have been made, equal to theTerminal Asset Value per Share. DETAILS OF THE SCHEME Calculation of Value for the Purposes of the Proposals Upon the winding up of the Company, but before any assets are transferred toMerchants or the Sterling Total Return Fund under the Scheme or are realised anddistributed pursuant to the Cash Option, the Liquidators will retain from theassets attributable to the Ordinary Shares (assuming the ZDP Shares are paid infull) a fund of an amount which they consider sufficient to provide for alloutstanding liabilities of the Company, including contingent liabilities and thecosts incurred by, or in respect of, the Company and the Liquidators in relationto the Proposals. To the extent that this contingency sum is not required, anycash balance remaining in the Liquidation Fund will be paid, in due course, toOrdinary Shareholders on the register of members immediately prior to theEffective Date as one or more distributions on a pro rata basis according totheir respective holdings of Ordinary Shares (or to ZDP Shareholders to theextent that their entitlements under the Scheme do not amount to the maximumprovided under the Articles). Shareholders' entitlements will be calculated as at the Calculation Date andwill reflect their entitlements on a winding up of the Company under theArticles of Association. New Merchants Shares will be issued at a price equal to 100.6 per cent. of theirnet asset value as at the Calculation Date (with debt valued at market value andincluding accrued but undeclared net income) or, if higher, 90 per cent. of themiddle market price per Merchants Share as at the Calculation Date. SterlingTotal Return Fund Shares will be issued at a price equal to the net asset valueper Sterling Total Return Fund Share, as at noon on 29 June 2006, calculated inaccordance with the FSA Regulations. The number of Merchants Shares or SterlingTotal Return Fund Shares (as the case may be) to be issued to each relevantOrdinary Shareholder and/or ZDP Shareholder (as the case may be) will be suchnumber as has a value, at the Merchants Issue Price or the Sterling Total ReturnFund Issue Price (as the case may be), equal to the Terminal Asset Value,calculated in accordance with the Scheme, of the Shares in respect of which suchShareholder elected to receive Merchants Shares or Sterling Total Return FundShares (as the case may be). Final Interim Dividend Under the Articles, Ordinary Shareholders are entitled to a final interimdividend equal, as nearly as practicable, to the revenue reserves (includingaccumulated revenue reserves) of the Company up to the date of the generalmeeting to approve the Scheme or a liquidation of the Company. To avoid theadministrative expense of this dividend, it is proposed that this Article beamended so that if the Scheme is implemented the final interim dividend will notbe paid; instead Ordinary Shareholders will have a preferential entitlement byvirtue of the amended Articles to an amount equal to the dividend which wouldhave been paid. The relevant change to the Articles are included in theresolution to be proposed at the First EGM. Conditions The Scheme is conditional upon, inter alia, the passing of the requisiteresolutions at the Meetings and the receipt by the Company of such clearancesfrom HM Revenue & Customs as the Directors, in their absolute discretion, shallconsider appropriate. If the new Merchants Shares or the Sterling Total ReturnFund Shares are, for any reason, not issued, elections for the Merchants Optionor (as the case may be) the Sterling Total Return Fund Option will be deemed tobe for the Cash Option. Costs and Commissions The total costs of the Proposals (excluding the Liquidators' retention) are notexpected to exceed £240,000 (including VAT), equivalent to approximately 0.4 percent. of the Company's net asset value and 0.9 per cent. of the Company's netassets attributable to the Ordinary Shares as at the close of business on 12 May2006 (being the latest practicable date prior to publication of the Circular).These costs will be charged against the current year's revenue. To the extentthat ZDP Shareholders' entitlements are met in full (being 179.68p per ZDPShare), then costs will be borne by Ordinary Shareholders, net of the CostsContribution referred to below. RCM (UK) has agreed to make a CostsContribution equal to 0.25 per cent. of the value of the assets transferred toMerchants. The total costs of the Proposals will be reduced accordingly. No initial charges will be payable by Shareholders in connection with the issueof Merchants Shares or Sterling Total Return Fund Shares under the Scheme. Inaddition, the Directors believe that no dilution levy will be applied in respectof the Sterling Total Return Fund Shares issued pursuant to the Scheme. If the Scheme becomes effective (or the resolutions at the Third EGM arepassed), RCM (UK) will not be entitled to any termination fee under theInvestment Management Agreement which would normally arise as a result of thetermination thereof. DEEMED ELECTIONS Shareholders who do not return a Form of Election or (as appropriate) send a TTEinstruction to CRESTCo in accordance with the above instructions will be deemedto have elected for the Cash Option in respect of their entire holdings ofShares. Overseas Shareholders will not receive a Form of Election and will bedeemed to have elected for the Cash Option in respect of their entire holdingsof Shares. Shareholders who elect for the Merchants Option and/or (as the case may be) theSterling Total Return Fund Option will be deemed to have elected for the CashOption if the value of assets attributable to each such election is less than£250,000 or if the value of assets attributable to the Merchants Option and theSterling Total Return Fund Option in aggregate is less than £2 million. In the event that elections for the Merchants Option exceed the maximum numberof Merchants Shares available for issue (as described in the section headed'Options available to Shareholders' above), shareholders will be scaled down prorata to their elections made and will receive cash to the extent of any excess. Copies of the Circular have been submitted to the UK Listing Authority and willshortly be available for inspection at the UK Listing Authority's DocumentViewing Facility which is situated at: Financial Services Authority 25 The North Colonnade Canary Wharf London E14 5HS Tel. no. 020 7066 1000 EXPECTED TIMETABLE Date from which it is advised that dealings in Shares should only 2006be for cash settlement and immediate delivery of documents of title 9 June Latest time for receipt of Allianz Global Investors Investment 5.00 p.m. on 12 June Trust Share Plan/PEP/ISA Form(s) of Election Record date for the purposes of Elections 5.00 p.m. on 14 June Company's register of members closes 5.00 p.m. on 14 June Latest time for receipt of Forms of Election 5.00 p.m. on 14 June Latest time for receipt of TTE instructions from Shareholders 5.00 p.m. on 14 Juneholding Shares in uncertificated form Latest time for receipt of forms of proxy for the Separate General 9.30 a.m. on 17 June Meeting of the Zero Dividend Preference Shareholders Latest time for receipt of forms of proxy for the Separate General 9.35 a.m. on 17 June Meeting of the Ordinary Shareholders Latest time for receipt of forms of proxy for the First 9.40 a.m. on 17 JuneExtraordinary General Meeting Separate General Meeting of the ZDP Shareholders 9.30 a.m. on 19 June Separate General Meeting of the Ordinary Shareholders 9.35 a.m. on 19 June First Extraordinary General Meeting 9.40 a.m. on 19 June Latest time for receipt of forms of proxy for the Second 9.30 a.m. on 27 June Extraordinary General Meeting Latest time for receipt of forms of proxy for the Third 9.30 a.m. on 27 June Extraordinary General Meeting Calculation Date Close of business on 27 June Listing of Shares suspended 7.30 a.m. on 28 June Shares reclassified into Reclassified Shares 8.00 a.m. on 28 June Company's register of members re-opens 8.00 a.m. on 28 June Second Extraordinary General Meeting 9.30 a.m. on 29 June Third Extraordinary General Meeting 9.35 a.m. on 29 June Effective date for implementation of Proposals 29 June Date on which the Company's assets are transferred to Merchants and 29 Junethe Sterling Total Return Fund Cancellation of listing and trading of Shares 8.00 a.m. on 30 June Dealings commence in new Merchants Shares 8.00 a.m. on 30 June Shareholders holding Shares in uncertificated form credited with 8.00 a.m. on 30 Junenew Merchants Shares Certificates for new Merchants Shares and contract notes for On or as soon as practicable after 30Sterling Total Return Fund Shares despatched June Cheques despatched or CHAPS payments made to Shareholders who have On or as soon as practicable after 30elected for cash and CREST payments made June Terms used in this announcement shall, unless the context otherwise requires,bear the meaning given to them in the Circular issued by Allianz Dresdner IncomeGrowth Investment Trust plc dated 18 May 2006. Enquiries Simon White 020 7065 1539 RCM (UK) Ltd David Benda/Kathryn Standley 020 7621 5557 Winterflood Investment Trusts This information is provided by RNS The company news service from the London Stock Exchange