TIDMABR
RNS Number : 5733F
Absolute Return Trust Limited
28 April 2011
Absolute Return Trust Limited (the "Company")
(a closed-ended investment company incorporated with limited
liability under the laws of Guernsey with registered number
42733)
Discount Control Initiatives
28 April 2011
The board of directors of Absolute Return Trust Limited (the
"Board") announces that following publication of the net asset
value of the Company's shares as at 31 March 2011, the discount
control provisions contained in the Company's articles of
incorporation have been triggered. Accordingly, the Company is now
required by its articles of incorporation to propose a vote to
shareholders to approve the continuation of the Company. The vote,
which will be proposed as an ordinary resolution, will require not
less than 50% of the total voting rights cast on the resolution to
be in favour in order for the Company to continue in its current
format, and will be proposed to shareholders at the Company's 2011
Annual General Meeting (expected to be in September 2011). If the
resolution is not passed, the directors are required to formulate
proposals to be put to shareholders within 6 months of such
resolution being defeated for the winding-up or other
reorganisation or reconstruction of the Company.
Over the 12 months to the end of March 2011, the Company's
shares have traded at an average discount to net asset value (NAV)
of 13.7% and 15.1% (Sterling and Euro classes respectively)
(source: Datastream). By contrast, since their admission in
February 2005 to 31 March 2011, the Company's Sterling shares have
traded at an average 4.0% discount (source: Datastream). Over this
period the Company's NAV has increased by 5.6% per annum with
annualised volatility of 5.7%, while the beta to equities, as
represented by the FTSE All Share Index, has been very low at
around 0.2. The table below shows the risk/return profile of the
Company's investment portfolio since inception compared with the
FTSE All Share and Citigroup UK 5+ year government bond
indices.
Annualised Annualised
Return Volatility
Absolute Return Trust Limited 5.6% 5.7%
----------- ------------
FTSE All Share Index (Total
Return) 7.2% 15.5%
----------- ------------
Citigroup 5+ year UK Government
Bond Index 5.4% 7.7%
----------- ------------
(Source: Fauchier Partners)
The Board wishes to take action that will encourage the discount
to narrow and after careful consideration with Fauchier Partners
Management Limited, the Company's Investment Manager, advisors and
major shareholders, announces the following proposals which are
intended to be supportive to investors whilst minimizing the impact
on how the Company's assets are managed.
Firstly, the Board proposes to offer a redemption facility for
up to 15% of the shares in issue (per currency class) for cash at a
price which will reflect prevailing NAV less costs associated with
the redemption of the shares. The Board is able to offer this
facility under a current authority provided by the Company's
articles of association. Shares will be redeemed on 30 September
2011 (the "Redemption Date") at their NAV on that date and proceeds
will be distributed after the deduction of expenses associated with
the redemption of shares. The deadline for electing to redeem
shares in the Company will be 27 July 2011. If some shareholders
elect to redeem more than 15% of their shareholding, this
over-election will be satisfied to the extent that other
shareholders have not elected to take up their entitlement
(calculated on a per share class basis), with any excess redemption
requests scaled back pro-rata. Having discussed this process with
the Investment Manager, the Board is confident that this proposal
can be effected without disrupting the Company's on-going
investment programme or materially changing the portfolio's
diversity or liquidity profile.
As a secondary measure, the Board intends to increase the
secondary market purchases of its own shares, up to a maximum of 5%
of the current classes of shares in issue, over the period from now
until the Company's next AGM in September 2011 (at which it will
seek a renewal of its buyback authority). The Board believes that
this will help the liquidity in the Company's shares and that any
shares bought back by the Company will be value-enhancing to
remaining shareholders. Since being granted the authority at the
last AGM, the Company has so far bought back 9,535,884 Sterling
shares at an average discount of 15.2% which amounts to 4.4% of the
Sterling class of shares in issue as at the date of the authority
being granted.
Lastly, the Company has the authority to offer a redemption
facility to shareholders half-yearly (at end-March and
end-September) on an on-going basis. Whilst recognising that
implementation or otherwise of this facility will always be at the
Board's exclusive discretion, the Board nonetheless believes that
with the upheavals of the last two and half years behind it, this
is a facility that is, like the above proposals, beneficial to
shareholders if used appropriately. Accordingly, it is the Board's
current intention, subject to market conditions, to offer the
redemption facility for up to 6% of the issued share capital of the
Company per annum (calculated on a per share class basis),
commencing in 2012. The Directors will meet prior to the operation
of the redemption facility to consider its operation in the light
of prevailing market conditions, shareholder sentiment and any
legal or tax considerations. Accordingly, shareholders should have
no expectation that the Directors will, under any circumstances,
operate this facility.
The Board will offer the redemption facility to shareholders on
the terms set out in the redemption notice form and in accordance
with, and subject to, the Company's articles of association.
Shareholders with certificated shares may make redemption
requests on a redemption notice form which can be obtained from the
Company's website or from Computershare Investor Services, the
Company's Registrar. Any questions regarding the redemption notice
form should be directed to Computershare Investor Services PLC by
telephoning 0870 707 4040. The completed redemption notice form
must be delivered to the Company, at the Receiving Agent's address,
Computershare Investor Services PLC, Corporate Actions Projects,
Bristol, BS99 6AH no later than 65 days before the Redemption Date,
being 3.00 pm on 27 July 2011. Shareholders with uncertificated
shares may make requests through CREST by no later than 3.00 pm on
27 July 2011 in accordance with CREST procedures. For further
details please call the above telephone number. Shareholders should
note that all shares tendered for redemption will be held in escrow
by Computershare Investor Services and will not be available for
trading until the final number of shares to be redeemed is
calculated in accordance with the timetable below.
Redemption will become effective on 30 September 2011. The
redemption monies payable in respect of redemption of any
certificated shares will be paid to the holder (or in the case of
joint holders, the holder whose name stands first in the register
in respect of the shares) by cheque despatched within 10 business
days of the completion of the calculations of the Net Asset Value
of the Company as at 30 September 2011 (or as soon as practicable)
or, if later, within 10 business days of the receipt of the
certificate(s) (if any have been issued) or an indemnity in a form
satisfactory to the Board in lieu of the certificate(s) in respect
of the shares being redeemed. The calculation of the Net Asset
Value of the Company as at 30 September 2011 is expected to be
completed on or around 31 October 2011 and payment is expected to
be made, and all shares released from escrow, during the week
commencing 14 November 2011.
If a holder whose certificated Shares are to be redeemed fails
to deliver the certificate(s) (if issued) for those shares to the
Company, the Company may retain the redemption monies until such
certificate is delivered.
The redemption monies payable in respect of the redemption of
any uncertificated shares will be payable within 10 business days
of completion of the calculations of the Net Asset Value of the
Company as at 30 September 2011 (or as soon as practicable) to the
holder by such method as may be determined by the Board.
Shareholders should note that the redemption facility is
operated at the sole discretion of the Board and the Board makes no
recommendation as to whether shares should be redeemed. If you are
in any doubt as to what action to take, you are recommended to seek
financial advice from your independent professional adviser
authorised under the Financial Services and Markets Act 2000.
A redemption notice form, once served on the Company or its
agents may not be withdrawn without the written consent of the
Company.
Expected timetable for redemptions:
Latest date for receipt of redemption notice form and submission
of relevant instruction or share certificate (as appropriate) - 27
July 2011
Announcement of Results of Redemption Requests - 28 July
2011
Redemption Date - 30 September 2011
30 September 2011 Net Asset Value publication - on or around 31
October 2011
Redemption monies paid - week commencing 14 November 2011
The Company's annual report and accounts, which will include a
notice of AGM setting out proposals for various ordinary
resolutions to be passed by shareholders including a continuation
vote resolution, will be published in due course.
For enquiries, please contact:
Fauchier Partners
Peter Vincent
Tel: +44 (0) 20 7009 9100
JPMorgan Cazenove Limited
Charles Stagg
Tel: +44 (0) 20 7155 8121
This information is provided by RNS
The company news service from the London Stock Exchange
END
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