TIDMNAVF
RNS Number : 1467L
Nippon Active Value Fund PLC
01 September 2023
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED IN IT ARE NOT
FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY,
IN WHOLE OR IN PART, IN OR INTO ANY MEMBER STATE OF THE EUROPEAN
ECONOMIC AREA, THE UNITED STATES, AUSTRALIA, CANADA, JAPAN OR THE
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COULD BE UNLAWFUL .
The information communicated in this announcement is deemed to
constitute inside information as stipulated under the UK Version of
Market Abuse Regulation (EU) No. 596/2014 (as incorporated into UK
Law by virtue of the European Union (Withdrawal) Act 2018, and as
subsequently amended ("MAR"). Upon the publication of this
announcement, this information is considered to be in the public
domain.
1 September 2023
Nippon Active Value Fund plc
LEI: 213800JOFEGZJYS21P75
Publication of Prospectus and Circular
Further to the Company announcements dated 18 May 2023 and 11
August 2023, the Board is today pleased to publish detailed
proposals relating to the rollover of assets of each of abrdn Japan
Investment Trust plc ("AJIT") and Atlantis Japan Growth Fund
Limited ("AJG") into the Company pursuant to schemes of
reconstruction of AJIT and AJG (respectively the "AJIT Scheme" and
the "AJG Scheme", and together the "Schemes"). Neither Scheme is
conditional on completion of the other.
Additionally, the prospectus of the Company dated 1 September
2023 relating to the Schemes and a 12-month placing programme to
issue up to 250 million new Ordinary Shares and/or C (the
"Prospectus") has been approved by the Financial Conduct
Authority.
A copy of the Prospectus has been submitted to the National
Storage Mechanism and will shortly be available at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism , and is
available on the Company's website at
https://www.nipponactivevaluefund.com/shareholder-information/shareholder-documents/
.
Capitalised terms used and not otherwise defined in this
announcement shall have the same meaning as in the Prospectus.
In connection with the Schemes (but, in any event, whether or
not either Scheme proceeds) the Company intends to transfer its
listing from the Specialist Fund Segment and have its Existing
Shares and New Shares (whether issued pursuant to the Schemes or
the Placing Programme) be admitted to (i) the Official List; and
(ii) to trading on the premium segment of the Main Market (the
"Migration").
Summary of the AJIT Scheme
The AJIT Scheme
Subject to the passing of the resolutions to be proposed at the
AJIT General Meetings and to the satisfaction of the AJIT Scheme
Conditions, AJIT will be placed into members' voluntary liquidation
and the AJIT Scheme will take effect. It is expected that the AJIT
Scheme will become effective on the AJIT Scheme Effective Date,
whereupon the cash, undertaking and other assets of AJIT comprising
the AJIT Rollover Pool will be transferred to the Company pursuant
to the AJIT Transfer Agreement, in exchange for the allotment of
New Shares to the AJIT Liquidators (as nominees for AJIT
Shareholders entitled to them in accordance with the AJIT Scheme).
Thereafter, the AJIT Liquidators will renounce the allotments of
the New Shares in favour of AJIT Shareholders who have elected (or
are deemed to have elected) to receive New Shares, and such New
Shares will be issued by the Company to those AJIT Shareholders
pursuant to the AJIT Scheme.
The issue of New Shares under the AJIT Rollover Option will be
effected on a formula asset value ("FAV") for FAV basis as at the
AJIT Scheme Calculation Date. For the purposes of the AJIT Scheme,
the net asset values ("NAVs") of each of the Company and AJIT will
be adjusted to take account of (inter alia) all the costs
associated with the AJIT Scheme not already accrued, in order to
determine their respective FAVs. Further details of the relevant
FAV calculations of each company are set out in Part 2 (Additional
Information) of the Circular. The new Ordinary Shares issued
pursuant to the AJIT Scheme will rank pari passu with the existing
Ordinary Shares then in issue (save for any dividends or other
distributions declared, made or paid on the Ordinary Shares by
reference to a record date prior to the issue of the relevant new
Ordinary Shares).
AJIT Cash Option
As part of the AJIT Scheme, AJIT Shareholders may elect to
receive cash instead of New Shares in respect of some or all of
their holdings in AJIT at a discount of two per cent. to the AJIT
FAV per Share (the "AJIT Cash Option"). The maximum number of AJIT
Shares that can be elected for the AJIT Cash Option is 25 per cent.
of the total number of AJIT Shares in issue (excluding AJIT Shares
held in treasury) as at the AJIT Scheme Calculation Date.
AJIT Transfer Agreement
On the AJIT Scheme Effective Date, or as soon as practicable
thereafter, the Company and the AJIT Liquidators (in their personal
capacity and on behalf of AJIT) will enter into and implement the
AJIT Transfer Agreement (subject to such modifications as may be
agreed between the parties thereto), whereby the AJIT Liquidators
will procure the transfer of the cash, undertaking and other assets
of AJIT comprising the AJIT Rollover Pool to the Company (or its
nominee) in consideration for the allotment of New Shares to the
AJIT Liquidators (as nominees for the AJIT Shareholders entitled to
them), such shares to be renounced by the AJIT Liquidators in
favour of the holders of AJIT Rollover Shares.
The AJIT Transfer Agreement provides that the assets to be
transferred to the Company will be transferred with such rights and
title as AJIT may have in respect of the same or any part thereof
subject to (and with the benefit of) all and any rights,
restrictions, obligations, conditions and agreements affecting the
same or any part thereof. The AJIT Transfer Agreement further
provides that AJIT, acting by the AJIT Liquidators, insofar as they
are reasonably able to do so by law or otherwise, will comply with
all reasonable requests made by the Company (or its nominee) in
respect of the cash, undertaking and other assets of AJIT to be
acquired.
Costs and expenses of the AJIT Scheme
Any stamp duty, SDRT (or equivalent Japanese tax payable in
connection with the transfer of Japanese securities) or other
transaction tax, or investment costs incurred by the Company on the
acquisition of the AJIT Rollover Pool and listing fees in relation
to the listing of the Ordinary Shares will be borne by the Enlarged
Company. If the AJIT Scheme does not proceed on the terms agreed or
the required AJIT Scheme Conditions are not satisfied, then the
Company and AJIT will each bear their own costs. The Company's
costs in connection with the AJIT Scheme are estimated at
approximately GBP570,000. The Investment Adviser has agreed to pay
for AJIT's costs to implement the AJIT Scheme up to a cap of
GBP800,000.
Summary of the AJG Scheme
The AJG Scheme
Subject to the passing of the resolutions to be proposed at the
AJG EGM and to the satisfaction of the AJG Conditions, AJG will be
placed into members' voluntary winding up and the AJG Scheme will
take effect. It is expected that the AJG Scheme will become
effective on the AJG Scheme Effective Date, whereupon the cash,
undertaking and other assets of AJG comprising the AJG Rollover
Pool will be transferred to the Company pursuant to the AJG
Transfer Agreement, in exchange for the allotment of New Shares to
the AJG Liquidators (as nominees for AJG Shareholders entitled to
them in accordance with the AJG Scheme). Thereafter, the AJG
Liquidators will renounce the allotments of the New Shares in
favour of AJG Shareholders who have elected (or are deemed to have
elected) to receive New Shares, and such New Shares will be issued
by the Company to those AJG Shareholders pursuant to the AJG
Scheme.
The issue of New Shares under the AJG Rollover Option will be
effected on a formula asset value ("FAV") for FAV basis as at the
AJG Scheme Calculation Date. For the purposes of the AJG Scheme,
the NAVs of each of the Company and AJG will be adjusted to take
account of (among other matters) all of the costs associated with
the AJG Scheme not already accrued, in order to determine their
respective FAVs. Further details of the relevant FAV calculations
of each company are set out in Part 2 (Additional Information) of
the Circular. The new Ordinary Shares issued pursuant to the AJG
Scheme will rank pari passu with the existing Ordinary Shares then
in issue (save for any dividends or other distributions declared,
made or paid on the Ordinary Shares by reference to a record date
prior to the issue of the relevant new Ordinary Shares).
AJG Cash Option
As part of the AJG Scheme, AJG Shareholders may elect to receive
cash instead of New Shares in respect of some or all of their
holdings in AJG at a discount of two per cent. to the AJG FAV per
Share (the "AJG Cash Option"). The maximum number of AJG Shares
that can be elected for the AJG Cash Option is 25 per cent. of the
total number of AJG Shares in issue (excluding AJG Shares held in
treasury) as at the AJG Scheme Calculation Date.
AJG Scheme Transaction Agreement
Pending publication of the AJG Circular, the Company and AJG
have entered into the AJG Scheme Transaction Agreement. Pursuant to
the AJG Scheme Transaction Agreement, subject to receipt of
relevant tax clearances, AJG has undertaken to use all reasonable
endeavours to (i) publish the AJG Circular by 15 September 2023;
and (ii) to implement the AJG Scheme in accordance with the terms
of the AJG Scheme set out in the Prospectus.
AJG Transfer Agreement
On the AJG Scheme Effective Date, or as soon as practicable
thereafter, the Company and the AJG Liquidators (in their personal
capacity and on behalf of AJG) will enter into and implement the
AJG Transfer Agreement (subject to such modifications as may be
agreed between the parties thereto), whereby the AJG Liquidators
will procure the transfer of the cash, undertaking and other assets
of AJG comprising the AJG Rollover Pool to the Company (or its
nominee) in consideration for the allotment of New Shares to the
AJG Liquidators (as nominees for the AJG Shareholders entitled to
them), such shares to be renounced by the AJG Liquidators in favour
of the holders of AJG Rollover Shares.
The AJG Transfer Agreement provides that the assets to be
transferred to the Company will be transferred with such rights and
title as AJG may have in respect of the same or any part thereof
subject to (and with the benefit of) all and any rights,
restrictions, obligations, conditions and agreements affecting the
same or any part thereof. The AJG Transfer Agreement further
provides that AJG, acting by the AJG Liquidators, insofar as they
are reasonably able to do so by law or otherwise, will comply with
all reasonable requests made by the Company (or its nominee) in
respect of the cash, undertaking and other assets of AJG to be
acquired.
Costs and expenses of the AJG Scheme
Any stamp duty, SDRT (or equivalent Japanese tax payable in
connection with the transfer of Japanese securities) or other
transaction tax, or investment costs incurred by the Company on the
acquisition of the AJG Rollover Pool and listing fees in relation
to the listing of the New Shares will be borne by the Enlarged
Company. If the AJG Scheme does not proceed on the terms agreed or
the required AJG Scheme Conditions are not satisfied, then the
Company and AJG will each bear their own costs. The Company's costs
in connection with the AJG Scheme are estimated at approximately
GBP470,000. The Investment Adviser has agreed to pay for AJG's
costs to implement the AJG Scheme up to a cap of GBP800,000.
Bene ts of the Schemes
Your Board believes that the issue of New Shares pursuant to the
Schemes would have the following bene ts to Shareholders:
(a) Shareholders will immediately bene t from an enlarged capital base;
(b) the implementation of the Schemes will result in an enlarged
and more diverse portfolio of assets which the Investment Adviser
is well placed to manage (given its experience);
(c) it will result in a reduction of the estimated pro forma
ongoing charges ratio of the Company;
(d) the increase in the size of the Company should mean that the
Ordinary Shares have enhanced liquidity in the secondary
market;
(e) the Company will be able to deploy additional capital at an advantageous time;
(f) a larger capital base will allow the Investment Adviser to
pursue its activist strategy in opportunities involving companies
with larger capitalisations; and
(g) the Investment Adviser will be able to have more effective
conversations with investee companies (on the basis of the Company
having more firepower to build stakes in these companies).
The assets to be received by the Company pursuant to each
Scheme, which in each case will consist of shares in listed
Japanese companies, will be managed in accordance with the
Investment Policy and may be realised over time and redeployed into
more activist opportunities. Any proceeds of any such realisation
are expected to be redeployed into more activist opportunities
within six months of receipt.
AJIT Scheme Conditions
The AJIT Scheme is conditional upon:
(a) completion of the Migration;
(b) the recommendation of the boards of the Company and AJIT to
proceed with the AJIT Scheme, which may be withdrawn at any time
(including, without limit, for material adverse change
reasons);
(c) the Share Allotment Authorities relating to the AJIT Scheme
being approved by Shareholders and not having been revoked or
superseded;
(d) the passing of the resolutions to be proposed at the First
AJIT General Meeting and the resolution to be proposed at the
Second AJIT General Meeting or any adjournment of those meetings
and upon any conditions of such resolutions being fulfilled;
and
(e) Admission occurring in respect of the New Shares to be
issued pursuant to the AJIT Scheme.
Any AJIT Scheme condition may, subject to compliance with legal
requirements, be waived with the mutual agreement of each of the
Company, the Investment Adviser and AJIT at any time up to
completion of the AJIT Scheme.
AJG Scheme Conditions
The AJG Scheme is conditional upon:
(a) completion of the Migration;
(b) the recommendation of the boards of the Company and AJG to
proceed with the AJG Scheme, which may be withdrawn at any time
(including, without limit, for material adverse change
reasons);
(c) the Share Allotment Authorities relating to the AJG Scheme
being approved by Shareholders and not having been revoked or
superseded;
(d) the passing of the resolutions to be proposed at the AJG EGM
or any adjournment of that meeting and upon any conditions of such
resolutions being fulfilled; and
(e) Admission occurring in respect of the New Shares to be
issued pursuant to the AJG Scheme.
Any AJG Scheme condition may, subject to compliance with legal
requirements, be waived with the mutual agreement of each of the
Company, the Investment Adviser and AJG at any time up to
completion of the AJG Scheme.
Prop osed Directors
If the Schemes are implemented, for continuity purposes for the
AJIT and AJG shareholders, it is intended that Claire Boyle and
Noel Lamb will join the Board of the Company on the completion
dates for the respective Schemes. Both will be
non-executive-Directors and be considered to be independent of the
AIFM and the Investment Adviser.
Summary of the Placing Programme
The Directors intend to implement the Placing Programme to
enable the Company to raise additional capital in the 12 month
period from the publication of the Prospectus. Subject to the
passing of the relevant Resolutions, the Directors will have
discretion to issue Ordinary and/or C Shares, provided that such
number of Ordinary Shares and C Shares to be issued pursuant to the
Placing Programme may not exceed 250 million Shares in aggregate.
The Placing Programme is intended to be exible and may have a
number of closing dates in order to provide the Company with the
ability to issue Ordinary Shares and/or C Shares over a period of
time. The Placing Programme is intended to satisfy market demand
for New Shares and to raise further money for investment in
accordance with the Investment Policy.
Proposed change to the Investment Policy
In connection with the Schemes and in contemplation of the
Company's Migration, the Board has proposed amending the Investment
Policy of the Company to increase the diversification contained
within the Company's portfolio. Further details on the proposed New
Investment Policy are set out in the Company's Circular to be sent
to shareholders. The Board considers that these adjustments
represent a material change to the Company's published investment
policy, and therefore the Company's Shareholders should vote to
approve such a change. A resolution will be put at the General
Meeting seeking such approval.
General Meeting
The Circular containing a notice convening the General Meeting
at which Shareholders will be asked to consider and, if thought t,
approve the Resolutions, has been published on the Company's
website at
https://www.nipponactivevaluefund.com/shareholder-information/shareholder-documents/
and will be sent to shareholders shortly. The Resolutions to be
considered by Shareholders are to (i) adopt the New Investment
Policy; and (ii) authorise the Directors to issue the New Shares
pursuant to the Schemes and the Placing Programme on a
non-pre-emptive basis.
Recommendation
The Board considers the proposals described in the Circular to
be in the best interests of Shareholders as a whole. Accordingly,
the Board recommends unanimously that Shareholders vote in favour
of the Resolutions. The Directors intend to vote in favour of the
Resolutions in respect of their own bene cial holdings which total
247,791 Ordinary Shares (representing 0.23 per cent. of the total
voting rights in the Company exercisable at the General
Meeting).
In addition, the Board understands that the AJIT Directors who
hold shares in AJIT, and the AJG Directors who hold shares in AJG,
all intend to roll over their entire bene cial holdings of AJIT
Shares and AJG Shares into New Shares.
The Board greatly appreciates the support it receives from
Shareholders, and the Board and/or the Investment Adviser will
endeavour to address any questions received on the proposals or the
Circular.
Timetable
General Meeting Timetable
Latest time and date for receipt of Forms 9.30 a.m. on 18 September
of Proxy 2023
-----------------------------
General Meeting 9.30 a.m. on 20 September
2023
-----------------------------
Migration
Expected admission of the Existing Shares 8.00 a.m. on 21 September
to the Official List and to trading on 2023
the premium segment of the Main Market
-----------------------------
AJIT Scheme Timetable
First AJIT General Meeting 4.00 p.m. on 28 September
2023
-----------------------------
AJIT Scheme Calculation Date 5.00 p.m. on 5 October
2023
-----------------------------
Second AJIT General Meeting 3.00 p.m. on 10 October
2023
-----------------------------
Announcement of results of the AJIT 10 October 2023
Scheme and respective FAVs per share
-----------------------------
Effective Date for the AJIT Scheme 10 October 2023
-----------------------------
Admission of the Ordinary Shares pursuant 8.00 a.m. on 11 October
to the AJIT Scheme 2023
-----------------------------
CREST accounts credited in respect of 8.00 a.m. on 11 October
Ordinary Shares issued in uncertificated 2023
form
-----------------------------
Certificates despatched in respect of Week commencing 16 October
Ordinary Shares issued in certificated 2023
form
-----------------------------
Placing Programme Timetable
Prospectus published and Placing Programme 1 September 2023
opens
-----------------------------
Publication of the Placing Programme As soon as reasonably
Price in respect of each Placing undertaken practicable following
the closing of each Placing
-----------------------------
Admission of the New Shares to be issued 8:00 a.m. on each day
pursuant to the Placing Programme to New Shares are issued
the Official List and dealings commence
-----------------------------
CREST accounts credited in respect of As soon as possible after
New Shares issued in uncertificated 8:00 a.m. on each day
form New Shares are issued
-----------------------------
Certificates despatched in respect of Approximately one week
New Shares issued in certificated form following Admission of
the relevant New Shares
-----------------------------
Placing Programme closes 30 August 2024*
-----------------------------
* or, if earlier, the date on which all of the New Shares
available for issue under the Placing Programme have been issued
(or such other date as may be agreed between the Company, the
Investment Adviser, Shore Capital and Berenberg (such agreed date
to be announced by way of an RIS announcement)).
Notes:
(1) References to times above and in the Circular generally are
to London times unless otherwise specified.
(2) All times and dates in the expected timetable and in the
Circular may be adjusted by the Company in consultation with Shore
Capital and Berenberg. Any material changes to the timetable will
be notified via an RIS.
(3) The timetable for implementation of the AJG Scheme will be
announced by way of an RIS announcement following the publication
the AJG Circular.
Enquiries
Berenberg Gillian Martin / Dan Gee-Summons / Natasha Ninkov
Tel: +44 (0)20 3207 7800
Company Secretary Sylvanus Cofie / Maria Matheou
Tel: +44 (0) 20 3327 9720
Important information relating to Sponsor and Financial
Adviser
Joh. Berenberg, Gossler & Co. KG, London Branch
("Berenberg") which is authorised and regulated by the German
Federal Financial Supervisory Authority and deemed authorised and
subject to limited regulation in the United Kingdom by the FCA, is
acting solely as sponsor and financial adviser to the Company and
for no one else in relation to the proposed transaction, and will
not be responsible to anyone other than the Company for providing
the protections afforded to the clients of Berenberg or for
providing advice in relation to the proposed transaction, the
contents of the document or any other matters described in this
announcement.
Apart from the responsibilities and liabilities, if any, which
may be imposed upon Berenberg by FSMA or the regulatory regime
established thereunder, Berenberg does not accept any
responsibility whatsoever or make any representation or warranty,
express or implied, concerning the contents of this announcement,
including as to its accuracy, completeness or verification, or for
any other statement made or purported to be made by it, or on its
behalf, in connection with the Company or the proposed transaction,
whether as to the past or future.
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