THE GLOBAL SMALLER COMPANIES TRUST PLC
The following amendment has been made to the Proposed Issue of Convertible Unsecured Loan Stock announcement released on 25 June 2014 at 11:41 under RNS No 5128K.
A Qualifying Shareholder will be entitled to subscribe for 0.77653163 CULS for each Ordinary Share held by him or her on the Record Date on a pre-emptive basis.
All other details remain unchanged.
The full amended text is shown below.
25 June 2014
Not for release, publication or distribution, directly or indirectly, in whole or in part, in or into the United States, Canada, Australia, Japan, New Zealand or the Republic of South Africa or any other jurisdiction in which the same would be unlawful .
This announcement is an advertisement and not a prospectus. This announcement does not constitute or form part of, and should not be construed as, any offer for sale or subscription of, or solicitation of any offer to buy or subscribe for, CULS or any other security in F&C Global Smaller Companies PLC or securities in any other entity, in any jurisdiction, including the United States, 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. This announcement does not constitute a recommendation regarding any securities. Any investment decision must be made exclusively on the basis of the Prospectus and any supplement to the Prospectus
F&C Global Smaller Companies PLC (the "Company")
Placing, open offer and offer for subscription of up to £40 million nominal of 3.5 per cent. Convertible Unsecured Loan Stock at 100p per £1 nominal ("CULS"),
and
Notice of General Meeting
Further to the announcement on 30 April 2014 that the Company and its advisers were exploring a number of gearing options including the possibility of an issue of convertible unsecured loan stock, the Directors are pleased to announce that the Company is proposing to raise up to £40 million through a placing, open offer and offer for subscription of CULS.
The Company has in issue £10 million 11.5% debenture stock, which matures in December 2014 (the "Debenture Stock"). As the maturity date approaches, the Directors of the Company have been reviewing whether to replace the structural gearing which the Debenture Stock has offered and have been carefully considering the form of any replacement borrowings.
The Board believes that regular or structural gearing through the investment cycle is appropriate to enhance shareholder returns. The net proceeds of the Issue will be able to be invested by the Manager in accordance with the Company's investment policy.
Up to £40 million in nominal value of CULS will be made available under the Issue at an Issue Price of 100p per nominal unit. The interest rate on the CULS will be fixed at 3.5 per cent. per annum, payable semi-annually with the first interest period ending on 31 January 2015. CULS Holders will be able to convert their CULS into Ordinary Shares twice annually throughout the life of the CULS commencing on 31 January 2015 and all outstanding CULS will be repayable at par on 31 July 2019. The rate of conversion will be set at a premium of 15 per cent. to the (unaudited) Net Asset Value per Ordinary Share at the time the CULS are issued.
The Board has been keen throughout the process of considering a CULS issue that Shareholders should as far as possible be able to apply for an entitlement of CULS on a pre-emptive basis and therefore an Open Offer is being proposed. The Open Offer will provide Qualifying Shareholders (as defined in the further information at the end of this announcement) with the opportunity to participate in the Issue by subscribing for 0.77653163 CULS for each Ordinary Share held by him or her on the Record Date (the "Open Offer Entitlement") on a pre-emptive basis. In addition to the Open Offer Entitlement, Qualifying Shareholders may apply for up to a further maximum amount equal to 125 per cent. of their Open Offer Entitlement, subject to CULS being available once all of the applications for pro-rata entitlements under the Open Offer have been taken into account.
Benefits of the Placing, Open Offer and Offer for Subscription
The Directors believe that the Open Offer, Placing and Offer for Subscription will have the following advantages for the Company:
· given the attractions of the Company's investment mandate, the Board believes that regular or structural gearing through the investment cycle is appropriate to enhance shareholder returns;
· the fixed cost of servicing the coupon of 3.5 per cent. per annum on the CULS is competitive against other forms of gearing that the Company could currently employ;
· any conversion of the CULS should lead to a broader investor base in the Company and a larger number of Shares in issue. This should, as a result, enhance the liquidity in the market for the Company's Ordinary Shares; and
· on any conversion of the CULS, the capital base of the Company would increase, allowing fixed operating costs to be spread across a larger number of Ordinary Shares, thereby reducing the ongoing charges per Share.
The Issue is conditional, inter alia,upon:
· the passing of the special resolution to be proposed at the General Meeting which will, if passed, grant the Directors the authority to issue, on a non pre-emptive basis, Shares and grant rights to convert any security into Shares of the Company in connection with the Issue. The General Meeting of the Company is convened for 12.30 p.m. on 24 July 2014;
· the Placing Agreement having become unconditional in all respects (save for the condition relating to Admission) and not having been terminated in accordance with its terms;
· Admission taking place no later than 8.00 a.m. on 30 July 2014 (or such later date as the Company and Oriel Securities agree, not being later than Friday, 29 August 2014);
· the minimum issue proceeds being equal to or exceeding £25 million or such lower amount as the Company, the Manager and Oriel may agree in writing.
A circular prepared in accordance with the Listing Rules in connection with the General Meeting is being published today and will be submitted to the National Storage Mechanism and will shortly be available for inspection at www.morningstar.co.uk/uk/NSM.
A prospectus prepared in accordance with the Prospectus Rules in connection with the Issue will be published in due course and will be submitted to the National Storage Mechanism and will be available for inspection at www.morningstar.co.uk/uk/NSM. Copies of the Prospectus will also be available after its publication from the Company at its registered office at Exchange House, Primrose Street, London EC2A 2NY.
Expected timetable | 2014 |
Record date for Shareholders' entitlements under the Open Offer | 6.00 p.m. on Tuesday 17 June |
Ex-entitlement Date (expected to be) | 8.00 a.m. 26 June |
Open Offer Entitlements and Excess CREST Open Offer Entitlements credited to stock accounts in CREST of Qualifying CREST Shareholders | 30 June |
Latest recommended time and date for requested withdrawal of Open Offer Entitlements and Excess CREST Open Offer Entitlements from CREST | 4.30 p.m. Wednesday 16 July |
Latest time and date for depositing Open Offer Entitlements and Excess CREST Open Offer Entitlements into CREST | 3.00 p.m. Thursday 17 July |
Latest time and date for splitting Application Forms (to satisfy bona fide market claims) | 3.00 p.m. Friday 18 July |
Open Offer closes. Latest time and date for receipt of completed Application Forms and payment in full under the Open Offer and settlement of relevant CREST instructions (as appropriate) | 11.00 a.m. Tuesday 22 July |
Offer for Subscription closes. Latest time and date for receipt of completed Application Forms and payment in full under the Offer for Subscription (as appropriate) | 11.00 a.m. Wednesday 23 July |
Latest time and date for receipt of placing commitments | 12 noon Thursday 24 July |
General Meeting to approve matters in connection with the Issue | 12.30 p.m. Thursday 24 July |
Result of the Issue and conversion price announced through a Regulatory Information Service | Friday 25 July |
Admission and commencement of dealings in CULS on London Stock Exchange's Main Market | On or around 8.00 a.m. Wednesday 30 July |
CULS issued to investors and CREST stock accounts expected to be credited for the CULS | Wednesday 30 July |
CULS issued to investors and Definitive certificates for CULS expected to be despatched | Week commencing 4 August |
Notes:
1. References to times in this announcement are to London time.
2. All times and dates in the expected timetable above, elsewhere in the Prospectus and in the Application Form are indicative only and may be adjusted by the Company (with the agreement of Oriel Securities). Any changes to the timetable will be notified by publication of a notice through an RIS.
3. CREST Shareholders should inform themselves of CREST's requirements in relation to electronic proxy appointments.
4. Further dates to be announced upon publication of the Prospectus.
Further information
Qualifying Shareholders
In the light of the uneconomic costs of registering and administering small holdings of CULS, only Qualifying Shareholders (being, for the avoidance of doubt, Shareholders, other than Overseas Shareholders, who have their name entered on the register of members of the Company on the Record Date and whose Open Offer Entitlement will entitle them to a minimum of £1,000 of CULS in nominal value) will be able to apply for CULS under the Open Offer. Furthermore, due to unavoidable administrative reasons, investors holding Shares in the Company through the F&C Savings and Pension Plans will not be Qualifying Shareholders.
Details of the CULS
The interest rate on the CULS will be fixed at 3.5 per cent. per annum, payable semi-annually in equal instalments, in arrears on 31 January and 31 July in each year, with the first interest period ending on 31 January 2015, in respect of the period from and including the date of Admission of the CULS (anticipated to be 30 July 2014) to but excluding the date of final repayment of the CULS (anticipated to be 31 July 2019).
CULS Holders will be entitled to convert their CULS into Ordinary Shares every six months from 31 January 2015 until 31 July 2019. The initial Conversion Price will be set at a 15 per cent. premium to the unaudited Net Asset Value per Ordinary Share at close of business on the date of Admission of the CULS (anticipated to be 30 July 2014). The Company will announce the initial Conversion Price to a RIS as soon as practicable following its calculation.
By way of illustration, had the Conversion Price been set by reference to the unaudited Net Asset Value per Ordinary Share at 23 June 2014 (the latest practicable date prior to the publication of this document) of 860.1500 pence, the Conversion Price would have been 989.1725 pence and a holder of £1,000 nominal of CULS would have been entitled to 101 Ordinary Shares on conversion of his/her CULS. The exercise of the CULS in full (assuming £40 million is raised under the Issue) would at the above illustrative Conversion Price result in 4,043,784 Ordinary Shares being issued, giving an increase of 7.9 per cent. in the Company's current issued Ordinary Share capital. Under the terms of the Trust Deed, the Conversion Price will be subject to subsequent adjustment on the occurrence of certain events.
If, at any time after 31 July 2017, the middle market price of the Ordinary Shares is 20 per cent. or more above the Conversion Price for at least 20 dealing days during a period of 30 consecutive dealing days, the Company will be able to require CULS Holders to redeem their CULS at par. In such event, CULS Holders would be given a final opportunity to convert their outstanding CULS into Ordinary Shares.
Following conversion of 80 per cent. or more of the nominal amount of the CULS issued and on any subsequent conversion date, the Company will be entitled to require remaining CULS Holders to convert their outstanding CULS into Ordinary Shares after they have been given an opportunity to have their CULS redeemed.
If, at any date after 31 July 2017, the nominal amount of the CULS (which expression for the purpose of this paragraph shall include the whole of the original nominal amount of the CULS issued but exclude any of the CULS purchased by the Company or any subsidiary of the Company and cancelled) outstanding shall represent 25 per cent. or more of the Company's net assets calculated by reference to the aggregate of the Company's assets less its liabilities and expenses in accordance with its published accounting policies for at least 20 business days during any period of 30 consecutive business days ending on or at any time after 31 July 2017, the Company shall no later than 30 days after such period be entitled to serve notice (in a form previously approved in writing by the Trustee) (a "Compulsory Redemption Notice") on the CULS Holders pursuant to this paragraph that all outstanding CULS will be redeemed on the redemption date specified in the notice (which shall be a date falling not less than four weeks nor more than 6 weeks following the Compulsory Redemption Notice) at its nominal amount, together with interest accrued up to (but excluding) the date of redemption, on the redemption date specified in the Compulsory Redemption Notice. For the purpose of this paragraph, a certificate signed by two Directors as to the value of the Company's net assets (determined as aforesaid) may be relied on by the Trustee as sufficient evidence thereof and, if so relied on, shall (in the absence of manifest error) be binding on all parties.
On a winding-up of the Company, the nominal amount of the CULS will rank ahead of the Ordinary Shares, but be subordinated to the Company's other borrowings and creditors. The Trust Deed constituting the CULS will not contain any additional restrictions on borrowings (including borrowings ranking ahead of the CULS), the disposal of assets or the creation of charges by, or changes in the nature of the business of, the Company or any subsidiary of the Company. Any CULS not previously redeemed, purchased or converted will be repaid by the Company on 31 July 2019 at its nominal amount. The interest paid on the CULS will be a finance cost currently charged 75 per cent. to the capital account and 25 per cent. to the revenue account in accordance with the Company's existing policies.
CULS issued under the Issue will be issued in registered form and may be held either in certificated form or settled through CREST. It is expected that definitive certificates for the CULS will, where requested or required by law, be despatched during the week commencing 4 August 2014. Temporary documents of title will not be issued. Pending despatch of such certificates, transfers will be certified against the Company's register of members. The Issue cannot be revoked after dealings have commenced on 30 July 2014. The ISIN number for the CULS is GBØØBNH7RK38, the ISIN number for the Open Offer Entitlement is GBØØBNHKWJ64 and the ISIN number for the Excess Application Facility is GBØØBNHKWK79.
Borrowings
The Company has the power under its Articles to borrow up to 100 per cent. of Shareholders' realised reserves. The Company's investment policy provides that effective gearing is limited to a maximum of 20 per cent. of Shareholders' funds.
The Board intends to keep the Company's use of gearing and gearing level under review. On the assumption that the Issue is fully subscribed and the proceeds fully invested, the Company's effective gearing level would be approximately 7.4 per cent. (including Debenture Stock at par value) at 23 June 2014. Notwithstanding the fact that the Company has no current intention to introduce additional gearing should the Issue be fully subscribed, in the event the Company does, in the future, put in place additional gearing, such gearing would rank ahead of the CULS.
Enquiries
F&C Management Limited 020 7628 8000
Peter Ewins
Jan Baker
Hugh Potter
Oriel Securities Ltd 020 7710 7600
Neil Winward
Mark Bloomfield
Important Information
Words and expressions defined in the Circular and the Prospectus to be published in due course will have the same meanings when used in this announcement.
Neither the National Storage Mechanism website nor the Company's website nor the content of any website accessible from hyperlinks on those websites (or any other website) is (or is deemed to be) incorporated into, or forms (or is deemed to form) part of, this announcement.
Oriel Securities Limited is authorised and regulated in the United Kingdom by the Financial Conduct Authority and is acting for F&C Global Smaller Companies PLC and no-one else in connection with the matters described in this announcement and will not be responsible to anyone other than F&C Global Smaller Companies PLC for providing the protections afforded to its clients or for affording advice in relation to any of the matters referred to herein.
The CULS have not been, nor will be, registered under the Securities Act or under the securities legislation of any state or other political sub division of the United States and the relevant clearances have not been and will not be, obtained from the securities commission of any province or territory of Canada, Australia or Japan and they may not, subject to certain exceptions, be offered or sold directly or indirectly in, into or within the United States, Canada, Australia or Japan or to, or for the account or benefit of, a US Person (as defined in the Securities Act) or any national, citizen or resident of the United States, Canada, Australia or Japan.
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