TIDMELX
RNS Number : 1936A
El Oro Ltd
24 May 2019
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN ARE NOT
FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY,
IN OR INTO, THE UNITED STATES, AUSTRALIA, CANADA OR THE REPUBLIC OF
SOUTH AFRICA
El Oro Ltd
24 May 2019
El Oro Ltd. ("the Company") Registration No 49778
Recommended proposals for the voluntary winding-up and
reconstruction of the Company with rollover options into JPMorgan
Elect plc ("Proposals")
Publication of Circular
On 30 November 2018, the Company announced that it had agreed
heads of terms with the board of JPMorgan Elect plc (JPMorgan
Elect) for JPMorgan Elect to provide a "rollover" option for the
Company's shareholders (Shareholders). The Board of the Company
(Board) is pleased to announce that a circular in connection with
the Proposals and containing a notice of the Extraordinary General
Meeting of the Company (the Circular) has been published today.
The Board is now putting forward proposals to Shareholders for
the voluntary winding-up and reconstruction of the Company by way
of a scheme of reconstruction (Scheme), whereby Eligible
Shareholders will be given the opportunity to elect to rollover
their Shares in the Company into one or more classes of JPMorgan
Elect Securities and/or to receive cash pursuant to the Cash
Option.
Shareholder approval is required under the provisions of the
Companies Law and the articles of incorporation of the Company to
implement parts of the Proposals which will involve
reclassification of the Company's existing Shares to give effect to
the Elections made or deemed to have been made by each Shareholder
under the Scheme, the voluntary winding up of the Company and the
appointment of the Liquidators.
Certain Shareholders (being members of the Parish family and
connected persons) which, together, represent 55.8 per cent. of the
Company's voting share capital, have undertaken to vote in favour
of the Resolutions and have also undertaken to elect for the
JPMorgan Elect Options under the Scheme in respect of 27,560,643
Shares in aggregate, representing 43.9 per cent. of the Company's
issued share capital as at the Latest Practicable Date. These
undertakings are conditional upon the Scheme not lapsing.
The Proposals
Under the Proposals, the Company will be wound up on 20 June
2019 by means of a members' voluntary liquidation pursuant to a
scheme of reconstruction and Eligible Shareholders can choose to
receive any combination of the following in respect of all or part
of their holding of Shares in the Company:
-- Managed Income Shares; and/or
-- Managed Growth Shares; and/or
-- Managed Cash Shares; and/or
-- cash.
Default Option
All Eligible Shareholders are encouraged to make a valid
Election. Eligible Shareholders who do not make valid Elections for
the purposes of the Proposals will be deemed to have elected for
the Managed Income Shares.
Restricted Shareholders
Restricted Shareholders will receive cash in respect of their
entire holding of Shares unless they have satisfied the Directors
and the JPMorgan Elect Directors that is it is lawful for JPMorgan
Elect to issue JPMorgan Elect Securities to them under any relevant
overseas laws and regulations.
Benefits of the Proposals
The Directors consider that the Proposals provide Eligible
Shareholders with a greater choice than if the Company were simply
to be wound up, since the Proposals enable Shareholders to (i)
continue their investment exposure through a rollover into JPMorgan
Elect Securities; (ii) receive cash; or (iii) receive a combination
of cash and JPMorgan Elect Securities.
The Directors consider that the Proposals should also have the
following benefits for Eligible Shareholders who chose to rollover
their investment in the Company into JPMorgan Elect Securities:
-- they will enable such Shareholders to retain market exposure
through up to three classes of shares, the investment objectives of
which the Board considers to be comparable to the Company's overall
investment objective, and to continue to receive investment returns
without triggering an immediate liability to capital gains tax;
and
-- they will enable such Shareholders to avoid dealing and other
costs associated with a share purchase in the secondary market.
Conditions to the Scheme
The Scheme is conditional upon:
(i) the passing of all the Resolutions to be proposed at the
Extraordinary General Meeting and all conditions to such
Resolutions (excluding any condition relating to the passing of any
other Resolution) being fulfilled;
(ii) the FCA having agreed to admit the JPMorgan Elect
Securities which are to be issued under the Scheme to the premium
segment of the Official List and the London Stock Exchange having
agreed to admit such JPMorgan Elect Securities to trading on the
London Stock Exchange's Main Market; and
(iii) the Directors not resolving to abandon the Scheme.
The Rollover Vehicle - JPMorgan Elect plc
JPMorgan Elect is an investment trust company whose shares are
admitted to the premium segment of the Official List and to trading
on the London Stock Exchange's Main Market. JPMorgan Elect has
three share classes, Managed Income Shares, Managed Growth Shares
and Managed Cash Shares, each with distinct investment policies,
objectives and underlying investment portfolios. Each share class
is listed separately and traded on the London Stock Exchange.
Shareholders in JPMorgan Elect may convert between each class of
JPMorgan Elect Securities in February, May, August and November in
each year without incurring a liability for capital gains tax. In
addition, Managed Cash Shareholders may also elect to have their
shares repurchased by JPMorgan Elect on each quarterly conversion
date at a price close to the NAV at that time.
JPMorgan Elect employs JPMorgan Funds Limited (JPMF) as its
Alternative Investment Fund Manager, which, in turn, delegates
portfolio management to JPMorgan Asset Management (UK) Limited
(JPMAM) to manage its assets actively. Both JPMF and JPMAM perform
the same functions for the Company.
Details of each class of JPMorgan Elect Securities which are
being offered under the Scheme are set out below (and further
details are set in the Circular and the JPMorgan Elect
Prospectus):
Managed Income
The objective of the Managed Income Shares portfolio is to
achieve a growing income return with potential for long term
capital growth by investing primarily in UK equities.
As at 22 May 2019 (being the latest practicable date prior to
the publication of the JPMorgan Elect Prospectus), the unaudited
value of the Managed Income Shares portfolio was approximately
GBP74.1 million, the NAV per Managed Income Share (unaudited) was
109.7p and the market capitalisation of the Managed Income Shares
was approximately GBP72.6 million.
Over the 12 months to 30 April 2019, the Managed Income Shares
have traded between a discount of 1.02 per cent. and 2.85 per cent.
(on a month end to month end basis).
There is no management fee on assets invested in JPMorgan
managed funds. The management fee is 0.6 per cent per annum on
assets invested in non-JPMorgan managed funds and direct
investments. Investments in JPMorgan's retail open-ended pooled
funds qualify for a partial rebate of the underlying fee. As at 28
February 2019 (being JPMorgan Elect's half year end), the ongoing
charges for the Managed Income Shares class were 0.83 per cent.
calculated in accordance with guidance issued by the Association of
Investment Companies.
Managed Growth
The objective of the Managed Growth Shares portfolio is to
achieve long term capital growth from investing in a range of
investment trusts and open-ended funds managed principally by
JPMAM.
As at 22 May 2019 (being the latest practicable date prior to
the publication of the JPMorgan Elect Prospectus), the unaudited
value of the Managed Growth Shares portfolio was approximately
GBP267.2 million, the NAV per Managed Growth Share (unaudited) was
854.9p and the market capitalisation of the Managed Growth Shares
was approximately GBP258.6 million.
Over the 12 months to 30 April 2019, the Managed Growth Shares
have traded between a discount of 1.95 per cent. and 3.74 per cent.
(on a month end to month end basis).
The management fee is 0.3 per cent per annum on assets invested
in JPMorgan managed funds and 0.6 per cent per annum on assets
invested in non- JPMorgan managed funds and direct investments.
Investments in JPMorgan's retail open-ended pooled funds qualify
for a partial rebate of the underlying fee which is paid back to
JPMorgan Elect. As at 28 February 2019 (being JPMorgan Elect's half
year end), the ongoing charges for the Managed Growth Shares class
were 0.58 per cent. calculated in accordance with guidance issued
by the Association of Investment Companies.
Managed Cash
The objective of the Managed Cash Shares portfolio is to achieve
a return in excess of sterling money markets by investing primarily
in GBP denominated short-term debt securities. Exposure is obtained
via an investment in the JPMorgan Funds - Sterling Managed Reserves
Fund (JSMRF), an existing UCITS fund launched on 22 August
2016.
As at 22 May 2019 (being the latest practicable date prior to
the publication of the JPMorgan Elect Prospectus), the unaudited
value of the Managed Cash Shares portfolio was approximately GBP7.0
million, the NAV per Managed Cash Share (unaudited) was 102.8p and
the market capitalisation of the Managed Cash Shares was
approximately GBP6.9 million.
Since 15 February 2019 to 30 April 2019, the Managed Cash Shares
have traded between a discount of 1.37 per cent. and 1.66 per cent.
(on a month end to end basis).
No management fee is charged for the management of the Managed
Cash Share portfolio. As at 28 February 2019 (being JPMorgan
Elect's half year end), the ongoing charges for the Managed Cash
Shares class were 0.02 per cent. calculated in accordance with
guidance issued by the Association of Investment Companies.
Costs of the Proposals
The costs of the Proposals (including all advisers' fees,
printing and other ancillary costs of the Proposals but excluding
stamp duty incurred on the in specie transfer of any assets from
the Company to JPMorgan Elect pursuant to the Transfer Agreement)
are expected to be approximately GBP500,000. The stamp duty will be
paid by the enlarged JPMorgan Elect and spread across the existing
shareholders of JPMorgan Elect and the Company's Shareholders
electing to roll over.
JPMF has agreed that it will meet the additional costs to be
incurred by the Company, above those of a simple liquidation, as a
result of the carrying out of the Scheme. JPMF has agreed to
contribute towards the excess costs pro rata to the amount rolling
over into JPMorgan Elect. Therefore, the costs to be borne by the
Company will be the amount which would have been incurred had the
Company simply been placed into liquidation plus additional costs
associated with Shareholders that elect (or are deemed to elect)
for the Cash Option rather than any of the JPMorgan Elect
Options.
Those Shareholders who chose to receive JPMorgan Elect
Securities for some or all of their investment will also incur
costs equal to the issue premium (the Issue Premium) applicable to
the relevant JPMorgan Elect Securities. This Issue Premium is
intended to defray the costs which will be incurred by JPMorgan
Elect in respect of its participation in the Scheme.
The level of the Issue Premium will depend on the value of the
assets to be transferred to JPMorgan Elect under the Scheme. If the
value of these assets is less than GBP40 million then the Issue
Premium will be set at 1.0 per cent. However, if their value
exceeds GBP40 million, the Issue Premium will reduce on a straight
line basis such that if their value equals GBP50 million (or more)
then the Issue Premium will be set at 0.65 per cent.
Liquidation of the UK Subsidiaries
In anticipation of the Company's voluntary winding-up, whether
in connection with the implementation of the Scheme or otherwise,
the Company is in the process of liquidating El Oro and Exploration
Company Limited (ELEX) and Investigations & Management Limited
(I&ML), its two active UK subsidiaries; I&ML is a direct
subsidiary of ELEX which in turn is a direct subsidiary of the
Company.
Whilst it is expected that all or substantially all of the
assets of the UK Subsidiaries will have been realised and
distributed to the Company prior to the Scheme Effective Date, the
statutory notice period in which creditors can inform the UK
Liquidators of any claims which they may have against either of the
UK Subsidiaries will only expire shortly before the Scheme
Effective Date. Accordingly, if any creditor claims are received by
the UK Liquidators in connection with the liquidation of the UK
Subsidiaries prior to the Scheme Effective Date, an appropriate
retention will need to be made by the UK Liquidators to settle such
claims. This may reduce the assets distributed by the UK
Subsidiaries to the Company and/or increase the amount that will be
allocated to the Liquidation Fund which would reduce the Company's
Residual Value for the purposes of the Scheme.
Furthermore, Shareholders should note the Liquidators of the
Company will not be able to close the liquidation of the Company
until the liquidations of both the UK Subsidiaries have been
completed and this may delay any final distribution to Shareholders
made by the Liquidators from the Liquidation Fund referred to
below. If there are any unforeseen delays in closing the
liquidations of the UK Subsidiaries that are outside the control of
the UK Liquidators (for example, tax clearances from HMRC taking
more time to receive than expected), this may also impact on the
costs incurred by both the UK Liquidators in respect of the UK
Subsidiaries and by the Liquidators in respect of the Company.
In addition to liquidating the UK Subsidiaries, applications are
being made to strike-off each of the Company's dormant subsidiaries
(being El Oro Mining and Exploration Company Limited, Group Traders
Limited and General Explorations Limited).
Liquidation Fund
Before any assets are transferred to JPMorgan Elect under the
Scheme or set aside to pay Shareholders who have elected for cash,
the Liquidators will retain cash and other assets in a liquidation
fund (the Liquidation Fund) in an amount which they consider
sufficient to provide for all liabilities of the Company (including
tax and contingent liabilities and an amount for unknown and
unascertained liabilities of the Company), as well as contingent
liabilities for the UK Subsidiaries that are not fully provided for
by the UK Liquidators. The retention in respect of unknown and
unascertained liabilities is currently expected to be GBP1,000,000.
However, if contracts for the sale of 41 Cheval Place have not been
exchanged prior to the commencement of the liquidation of ELEX, the
amount of the retention is likely to be higher and will be
determined at the Calculation Date.
Illiquid Assets
The Company's investment portfolio includes a number of illiquid
and impaired assets, principally comprising shares and other
securities in approximately 5 illiquid quoted and 27 unquoted
private companies, which are not suitable for transfer to JPMorgan
Elect pursuant to the Scheme and which it is not expected will be
capable of being fully realised by the Company prior to the Scheme
Effective Date (the Illiquid Assets). As at the Latest Practicable
Date, the aggregate value attributed by the Company to the Illiquid
Assets was approximately GBP2.6 million.
In accordance with the Scheme, to the extent that the Illiquid
Assets have not been realised prior to the Calculation Date, the
Illiquid Assets will be retained in the Liquidation Fund and will
not be taken into account for the purposes of calculating the
Residual Value and the Residual Value per Share for the purposes of
the Scheme. To the extent the Illiquid Assets are subsequently
realised by the Liquidators, the net proceeds from the sale of such
assets (if any), after all liabilities of the Company have been
satisfied, shall be paid in cash to Reclassified Shareholders who
are on the Company's register of members at the close of business
on the Scheme Effective Date on a pari passu basis pro rata to
their respective holdings of the Shares, prior to the
reclassification of the Shares, provided that if any such amount
otherwise payable to a Shareholder is less than GBP5.00, it will
not be paid to such Shareholder but will be transferred by the
Liquidators to the Nominated Charity.
In the event that the Liquidators have been unable to realise
all or any of the Illiquid Assets within 12 months from the date of
their appointment or, if sooner, once the remaining Illiquid Assets
are valued at less than GBP100,000, the Liquidators intend to offer
any remaining Illiquid Assets for sale by way of auction. There can
be no assurance the value realised from such sale will reflect the
aggregate value attributed to such Illiquid Assets as set out
above, or such sale will result in any, or any further,
distributions to Reclassified Shareholders from the Liquidation
Fund.
In addition to the Illiquid Assets described above, ELEX
currently owns the freehold property 41 Cheval Place, London SW7
1EW. Contracts for the sale of 41 Cheval Place for GBP2.3 million
were signed on 16 May 2019. It is intended that the net proceeds of
the expected sale of 41 Cheval Place will be distributed to the
Company upon receipt and will be taken into account when
calculating the Company's Residual Value and the Residual Value per
Share for the purposes of the Scheme. In the event that the net
proceeds of the sale of 41 Cheval Place are not received by ELEX
and distributed to the Company prior 5.00 p.m. on 18 June 2019
(being the expected Calculation Date), the Company may postpone the
Calculation Date to such later date and time as it may determine
falling as soon as reasonably practicable following such receipt so
as to ensure that the Residual Value and the Residual Value per
Share takes into account the net proceeds realised from the sale of
41 Cheval Place, provided, however, that the Company will not
postpone the Calculation Date beyond 5 July 2019. If the proceeds
from the expected sale have not been received on or prior to 5 July
2019 they will not be taken into account for the purposes of
calculating the Residual Value and the Residual Value per Share for
the purposes of the Scheme, and instead would, after all
liabilities of the Company have been satisfied, be paid in cash to
Reclassified Shareholders who are on the Company's register of
members at the close of business on the Scheme Effective Date on a
pari passu basis pro rata to their respective holdings of the
Shares, prior to the reclassification of the Shares, provided that
if any such amount otherwise payable to a Shareholder is less than
GBP5.00, it will not be paid to such Shareholder but will be
transferred by the Liquidators to the Nominated Charity.
Extraordinary General Meeting
As described above, the Proposals are conditional, inter alia,
on the approval of Shareholders which is being sought at the
Extraordinary General Meeting.
At the Extraordinary General Meeting resolutions will be
proposed which, if passed, will:
-- reclassify the Shares to reflect the Elections made or deemed
to have been made under the Scheme;
-- authorise the implementation of the Scheme by the Liquidators;
-- amend the Articles of Incorporation the Company for the
purposes of implementing the Scheme; and
-- appoint the Liquidators and place the Company into liquidation.
Resolutions 1, 2 and 3 will be proposed as special resolutions
and Resolution 4 will be proposed as an extraordinary
resolution.
Expected Timetable
2019
Time from which it is advised that dealings 6.00 p.m. on 14 June
in the Shares should only be for cash settlement
and immediate delivery of documents of title
Latest time and date for receipt of Forms 1.00 p.m. on 17 June
of Election or TTE Instructions from Eligible
Shareholders
Closing of the Company's register of members 6.00 p.m. on 17 June
and Record Date for participation in the
Proposals
Latest time and date for receipt of Forms 12 noon on 18 June
of Proxy from Shareholders in respect of
the EGM
Calculation Date* 5.00 p.m. on 18 June
Shares disabled in CREST 6.00 p.m. on 19 June
Listing of Shares on the Official List of 6.00 p.m. on 19 June
TISEA suspended
Extraordinary General Meeting 12 noon on 20 June
RNS Announcement of the results of the EGM 20 June
and Elections
Scheme Effective Date, Transfer Date and 21 June
commencement of the voluntary winding up
of the Company*
Admission of JPMorgan Elect Securities issued 8.00 a.m. on 24 June
under the Scheme and dealings in such JPMorgan
Elect Securities commence*
Cheques expected to be despatched and CREST on or as soon as
payments made to Shareholders in respect practicable after
of the Cash Option 1 July
Share certificates for JPMorgan Elect Securities week commencing
issued under the Scheme expected to be despatched 1 July
Cancellation of the listing of the Shares 20 July
on the Official List of TISEA
* In the event that the proceeds from the expected sale of 41
Cheval Place have not been received by 5.00 p.m. on 18 June 2019,
the Calculation Date shall be such later time and date as shall be
determined by the Company falling as soon as reasonably practicable
following such receipt (but not later than 5.00 p.m. on 5 July
2019) and in such circumstances the Scheme Effective Date and the
Transfer Date would be expected to occur on the third Business Day
following the postponed Calculation Date and the date of Admission
would be expected to fall on the fourth Business Day following the
Calculation Date.
Without limiting the note set out above, each of the times and
dates in the expected timetable may (where permitted by law) be
extended or brought forward without further notice. If any of the
above times and/or dates change, the revised time(s) and/or date(s)
will be notified to Shareholders through a Regulatory Information
Service.
In this announcement, where the context requires, references to
20 May 2019 should be treated as being references to the latest
practicable date prior to the publication of this document (the
Latest Practicable Date).
Notes
Capitalised terms used but not defined in this announcement will
have the same meaning as set out in the Circular.
This announcement does not contain all the information which is
contained in the Circular. Shareholders should read the Circular
and the JPMorgan Elect Prospectus to make informed elections under
the Proposals.
The Circular will shortly be available on the Company's website
at www.eloro.com.
For further information, please contact:
El Oro Ltd www.eloro.com 020 7581 2782
Robin Woodbine Parish, Chairman
Una Ni Dhonaill
Aztec Financial Services (Guernsey) Limited 01481 748831
Chris Copperwaite
Lucy Smith
Registered address: East Wing, Trafalgar Court, Les Banques, St
Peter Port, GY1 3PP
End of announcement
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
CIRSEUFILFUSEDI
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May 24, 2019 12:00 ET (16:00 GMT)
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