TIDMESO TIDMEO.P TIDMEC.P TIDMEL.P
RNS Number : 3950W
EPE Special Opportunities PLC
01 August 2018
EPE Special Opportunities plc
Proposed Migration to Bermuda, Publication of Circular and
Notice of General Meeting
EPE Special Opportunities plc ("ESO plc" or the "Company") today
announces that it proposes to migrate the Company's jurisdiction of
incorporation from the Isle of Man to Bermuda (the "Migration").
Under the AIM and NEX Exchange Growth Market ("NEX") Rules, the
Migration will be treated as a cancellation of the admission of the
Company's Ordinary Shares to trading on AIM. The admission to AIM
and NEX will follow an up to six business day period of suspended
dealings in the Ordinary Shares whilst the Company obtains a
Bermudian ISIN. The Company has today published a circular to
shareholders detailing all information about the background to, and
the rationale for, the Migration (the "Circular").
The Migration is conditional on, amongst other things, the
passing of the Resolutions to be proposed at the General
Meeting.
Geoffrey Vero, Chairman of ESO plc, commented:
"The ESO plc Board are pleased to confirm their intention to
migrate the Company to Bermuda. We believe the migration will
provide a better value added tax, legal and regulatory environment
for shareholders."
Key highlights:
-- The Board has concluded that the Migration is in the best interests of the Company.
-- The Directors believe that Bermuda offers a more appropriate
value added tax, legal and regulatory environment for the Company
going forwards.
-- Notably, the Migration takes the Company outside of the scope
of VAT and in doing so brings the Company's arrangements into line
with the arrangements of the majority of its peer listed funds.
-- Two key reasons for the decision to choose Bermuda as the
preferred destination for the Migration were:
o Reduced capital gains risk: the discontinuance of the Company
under the Isle of Man Companies Act and the registration of the
continuance of the Company under the Bermuda Companies Act should
not be deemed to create a new legal entity. There are express
statements to this effect in Isle of Man and Bermuda company law.
Therefore, the continuance should not be treated as a disposal
event for the purposes of UK capital gains tax, which would
significantly disadvantage the Shareholders.
o More secure VAT status: Bermuda's VAT status is perceived by
the Board to be more secure than that of certain other off-shore
jurisdictions given the changes potentially required to the tax
regimes of the United Kingdom and other jurisdictions to effect
Brexit.
Suspension and re-admission process
It is anticipated that there will be up to a six business day
period of suspension of dealings of the Ordinary Shares on AIM and
the NEX Exchange Growth Market between (1) completion of the
Migration; and (2) cancellation and re-admission of the Ordinary
Shares to trading on AIM and the NEX Exchange Growth Market, whilst
a Bermudian ISIN is obtained in respect of the Ordinary Shares from
the Bermuda Stock Exchange. A Bermudian ISIN can only be procured
following completion of the Migration and it is anticipated that
this process, together with the necessary applications to be made
with London Stock Exchange, the NEX Exchange and Euroclear, will
take approximately six business days to complete. Without a
Bermudian ISIN the Ordinary Shares cannot be re-admitted to AIM or
the NEX Exchange Growth Market. As a result, it is currently
anticipated that:
-- completion of the Migration will occur on 12 September 2018;
-- suspension of dealings of the Ordinary Shares on AIM and the
NEX Exchange Growth Market and in CREST will occur at 8.00 a.m. on
13 September 2018; and
-- the re-admission of, and dealings in, the Ordinary Shares (as
continued to Bermuda) to and on AIM and the NEX Exchange Growth
Market will occur at 8.00 a.m. on 21 September 2018.
The Circular, which includes all information about the
background to, and the rationale for, the Migration can be found
here:
http://www.epicprivateequity.com/our-business/capital/epe-special-opportunities-plc/investor-relations/aim-rule-26/
Capitalised terms used in this announcement have the meanings
given to them in the Circular.
Enquiries:
EPIC Private Equity LLP Alex Leslie
+44 (0) 20 7269 8865
FIM Capital Limited (formerly Philip Scales
IOMA Fund +44 (0) 1624 681250
and Investment Management Limited)
Numis Securities Ltd +44 (0) 20 7260 1000
Nominated Advisor & Broker: Stuart Skinner / Charles Farquhar
/ Huw Jeremy
Background to the Migration
The Board has concluded that the Migration is in the best
interests of the Company. The Directors believe that Bermuda offers
a more appropriate VAT, legal and regulatory environment for the
Company going forwards.
The Company migrated its management and business operations from
the Isle of Man to Jersey such that it became resident for tax
purposes in Jersey in May 2017 and, as a consequence, was outside
the scope of VAT. Whilst tax resident in the Isle of Man, the
Company paid VAT on the majority of fees incurred (including
management fees payable to its investment adviser, EPE and other
professional fees) as the Isle of Man is within the scope of VAT.
During the financial year ended 31 January 2017, the Company paid
GBP310,161 in VAT. The Company was unable to recover any of such
VAT. Many of the Company's peer listed private equity funds are tax
resident in territories outside the scope of VAT and therefore are
not required to pay VAT on their fees. Given that the investment
decisions taken by potential investors in the Company are, in part,
based on the Company's running expenses (commonly summarised as the
Company's ongoing change ratio, or OCR), the Company was at a
competitive disadvantage to the majority of its peer listed private
equity funds as its fees were increased by VAT. The migration of
the Company's tax residency to Jersey was, therefore, to remove
this VAT expense. Jersey was selected for the interim step of
migrating the Company's tax residency for, among other reasons,
expediency and convenience and given that a number of the existing
directors of the Company were resident in Jersey.
The migration of tax residency and operations, however, was
intended to be an interim step ahead of migration of the
incorporation of the Company to a jurisdiction outside of the scope
of VAT. Migration of the Company's incorporation is advisable to
bring the Company's arrangements in line with the arrangements of
the majority of those of its peer listed funds - that are tax
resident outside the scope of VAT - and to mitigate any possible
doubt (whether legitimate or not) over the Company's tax residency
outside of the scope of VAT.
The Board gave detailed consideration to a number of potential
off-shore jurisdictions as a destination for the migration of the
Company's jurisdiction of incorporation and chose Bermuda as the
preferred destination. As noted above, the Directors believe that
Bermuda offers a more appropriate VAT, legal and regulatory
environment for the Company going forwards. The Directors believe
that Bermuda is attractive to the Company given that, most notably,
it is outside the scope of VAT (unlike the Isle of Man) in addition
to, amongst other things, it having a legal framework which
replicates many of the features of Isle of Man company law, it
being an established centre for investment companies and it having
a developed regulatory environment.
Two key reasons for the decision to choose Bermuda as the
preferred destination for the Migration were:
(a) Reduced capital gains risk: the discontinuance of the
Company under the Isle of Man Companies Act and the registration of
the continuance of the Company under the Bermuda Companies Act
should not be deemed to create a new legal entity. There are
express statements to this effect in Isle of Man and Bermuda
company law. Therefore, the continuance should not be treated as a
disposal event for the purposes of UK capital gains tax, which
would significantly disadvantage the Shareholders. This can be
compared with certain other jurisdictions which either do not
permit a continuance or where the continuance law does not contain
the above statement. In such jurisdictions, a scheme of arrangement
would or might be needed to effect the re-domicile (for which
Shareholders holding more than 5% of the Ordinary Shares would need
HMRC clearance). A scheme of arrangement would be a significantly
more involved, lengthy and costly process than the proposed
Migration. Further, there is no guarantee that HMRC clearance would
be received; and
(b) More secure VAT status: in addition, Bermuda's VAT status is
perceived by the Board to be more secure than that of certain other
off-shore jurisdictions given the changes required to the tax
regimes of the United Kingdom and other jurisdictions to effect
Brexit. The Board understands that there is a reduced risk that
Bermuda's tax regime is impacted by the Brexit settlement currently
being negotiated by the United Kingdom Government as compared to
other offshore jurisdictions, such as Jersey, Guernsey and the Isle
of Man.
It is therefore proposed that the Company be re-domiciled in,
and migrated to, Bermuda. A comparison of the relevant differences
between the Isle of Man Companies Law and the Bermuda Companies Law
is set out in Part II of the Circular.
Effect of the Migration
On completion of the Migration, the laws of the Isle of Man
cease to apply to the Company and the Company will thereupon become
subject to the laws of Bermuda, as if it had been originally
incorporated in Bermuda under the provisions of the Bermuda
Companies Law. The registered office of the Company will be located
in Bermuda after the Migration. Under the Bermuda Companies Law,
the Migration would not be deemed to create a new legal entity or
prejudice or affect the continuity of the Company.
Further, upon the Migration becoming effective in accordance
with the laws of the Isle of Man and Bermuda:
(a) the property of the Company prior to the Migration will
continue to be the property of the Company;
(b) the Company will continue to be liable for the obligations
of the Company incurred prior to the Migration;
(c) any existing cause of action, claim or liability to
prosecution in respect of the Company existing prior to the
Migration will be unaffected;
(d) any civil, criminal or administrative action or proceeding
pending by, or against, the Company prior to the Migration may be
continued by or against the Company;
(e) any conviction against, or any ruling, order or judgement in
favour of, or against, the Company prior to the Migration may be
enforced by or against the Company; and
(f) service of process may continue to be effected on the
registered agent of the Company in the Isle of Man in respect of
any claim, debt, liability or obligation of the Company during its
existence as a company under the Isle of Man Companies Law.
Shareholders should note that following completion of the
Migration, each Ordinary Share will still be a share in the capital
of the Company and that their beneficial ownership to the Existing
Ordinary Shares held by them will not be affected by the Migration.
Except for the actions set out in paragraph 7 (Action to be taken)
of the Circular, Shareholders are not required or requested to take
any action to approve or effect the Migration.
The Company's ISIN and SEDOL will change as a result of the
Migration and the Company will make an announcement incorporating
details of the new ISIN and SEDOL when they are available. This
announcement is expected to be made on or around the Migration
Date.
There is no requirement under Bermuda law for a Shareholder to
hold a share certificate in order to be able to enforce their
rights against the Company or to enjoy any of the privileges of
being a Shareholder and unless a request is received from a
Shareholders listed in the Company's register of members, the
Company will not issue new share certificates.
Details of the impact of the Migration on the ability of
Shareholders to settle and pay for interests in the Ordinary Shares
through the CREST system are set out in paragraph 5 of the
Circular.
Timing of and process for the Migration
In order to effect the Migration, amongst other things:
(a) the Isle of Man Companies Law requires the Company to:
(i) make an application to the Isle of Man Registry for consent
to be continued in Bermuda and to be discontinued in the Isle of
Man; and
(ii) file the Certificate with the Isle of Man Registry once issued; and
(b) the Bermuda Companies Law requires the Company to:
(i) obtain all necessary authorisations required under the laws
of the Isle of Man in order to enable it to continue as an exempted
company registered in Bermuda;
(ii) make an application to the Bermuda Monetary Authority for
permission to continue into Bermuda as an exempted company; and
(iii) make an application to the Bermuda Registry for
continuance of the Company as an exempted company incorporated
under the Bermuda Companies Law (which shall include provision of
the previous year's financial statements) and obtain a certificate
of continuance in respect of the Company.
Under the Isle of Man Companies Law, the Migration must be
authorised by a resolution passed by members holding at least 75
per cent. of the voting rights exercised in relation to the
resolution. The Migration will take effect, following the passing
of the Resolutions, when all approvals are in place and on the
issuance by the Bermuda Registry of the Certificate and the
issuance of a certificate of discontinuance by the Isle of Man
Registry, which is expected to be on or around 12 September
2018.
The Code
The Code currently applies to the Company pursuant to section
3(a)(i) of the Introduction to the Code, as it is a company which
has its registered office in the Isle of Man and whose shares are
admitted to trading on a multilateral trading facility in the
United Kingdom, i.e. AIM and the NEX Exchange Growth Market.
Following completion of the Migration, the Company will not be a
company to which the Code applies under sections 3(a)(i) or (ii) of
the Introduction to the Code as it will not have its registered
office in the United Kingdom, the Channel Islands or the Isle of
Man. It will also not satisfy the criteria in section 3(a)(iii) of
the Introduction to the Code as it will not have its registered
office in the United Kingdom or another member state of the
European Economic Area and its securities will not be admitted to a
regulated market in the United Kingdom or another member state of
the European Economic Area.
The Board has decided not to incorporate provisions equivalent
to the mandatory offer rules set out in Rule 9 of the Code, or any
other provisions of the Code, into the New Articles which will be
approved and adopted as part of the Migration.
The Board has taken this decision on the basis that the Company
will not be a company to which the Code applies following
completion of the Migration. In addition, the Board has considered
legal advice that such provisions (when included in the
constitutional documents of a company that is not subject to the
Code) would typically grant considerable discretion to the board of
directors of the relevant company to determine matters that would
be determined by the Panel in the case of a company that is subject
to the Code and that the exercise of, or failure to exercise, their
powers by the directors of the relevant company could potentially
lead to personal liability for the directors in circumstances where
such exercise, or failure to exercise, amounted to a breach of
their duties as directors under applicable law (albeit that the
Directors would have the benefit of the indemnification provisions
in the New Articles). In addition, the Board understands that the
Panel has a body of precedent and wealth of experience in
interpreting the Code, while no such precedent exists in Bermuda
and a Bermuda court would not be expected to have the expertise
that the Panel or a UK court would have in interpreting provisions
based on the Code.
Shareholders will be asked to approve the Board's decision not
to incorporate provisions equivalent to those contained in the Code
into the New Articles.
Shareholders should note that, if the Migration becomes
effective, they will not receive the protections afforded by the
Code in the event that there is a subsequent offer to acquire their
Ordinary Shares. Brief details of the Panel, the Code and the
protections given by the Code are described in the Circular.
Information on, and rationale for, the AIM Cancellation and the
NEX Cancellation
AIM Cancellation
Due to the change in the Company's jurisdiction of
incorporation, the AIM regulation department of the London Stock
Exchange requires that the Migration be treated under Rule 41 of
the AIM Rules as a cancellation of the admission to trading on AIM
of the Ordinary Shares. In accordance with Rule 41 of the AIM
Rules, the Company has notified the London Stock Exchange of the
proposed AIM Cancellation. Shareholder approval for the AIM
Cancellation is being sought at the General Meeting as part of the
Resolutions and is conditional on the consent of not less than 75
per cent. of the votes cast by Shareholders at the General Meeting.
The AIM Cancellation is conditional on the Migration becoming
effective.
It is anticipated that the AIM Cancellation will occur up to six
business days after completion of the Migration, to be followed
immediately thereafter by the re-admission of the Ordinary Shares
(as continued to Bermuda) to trading on AIM. Dealings in the
Ordinary Shares on AIM will be suspended from 8.00 a.m. on the
business day following completion of the Migration until AIM
Admission becomes effective.
Subject to the requisite Shareholder approval and to the
Migration becoming effective on 12 September 2018, it is
anticipated that the last day of dealings in the Ordinary Shares on
AIM will be 12 September 2018, the suspension of dealings of the
Ordinary Shares to AIM will occur at 8.00 a.m. on 13 September
2018, and the AIM Cancellation will become effective at 7.30 a.m.
on 21 September 2018.
In connection with AIM Admission, the Company is required to
publish certain documentation including the Schedule One
Announcement. On the date of this document, the Company provided
the London Stock Exchange with, and published, the Schedule One
Announcement. The Directors anticipate that AIM Admission will
become effective in accordance with the AIM Rules and that dealings
in the Ordinary Shares (as continued to Bermuda) on AIM will
commence at 8.00 a.m. on 21 September 2018. Copies of the Schedule
One Announcement may be viewed upon request at the registered
office of the Company (being IOMA House, Hope Street, Douglas, Isle
of Man IM1 1AP) up until AIM Admission during normal business hours
on any weekday (Saturdays, Sundays and public holidays excepted). A
copy of the Schedule One Announcement is available, free of charge,
on the Company's website at www.epespecialopportunities.com. A copy
of the Schedule One Announcement will also be available for
inspection at the General Meeting.
NEX Cancellation
In addition, the NEX Exchange will also require that the
Migration be treated as a cancellation of the admission to trading
on the NEX Exchange Growth Market of the Ordinary Shares. It is
anticipated that the NEX Cancellation will occur up to six business
days after completion of the Migration, to be followed immediately
thereafter by the re-admission of the Ordinary Shares (as continued
to Bermuda) to trading on the NEX Exchange Growth Market. Dealings
in the Ordinary Shares on the NEX Exchange Growth Market will be
suspended from 8.00 a.m. on the business day following completion
of the Migration until NEX Admission becomes effective.
Subject to the Migration becoming effective on 12 September
2018, it is anticipated that the last full day of dealings in the
Ordinary Shares on the NEX Exchange Growth Market will be 12
September 2018, the suspension of dealings of the Ordinary Shares
to the NEX Exchange Growth Market will occur at 8.00 a.m. on 13
September 2018, and the NEX Cancellation will become effective at
7.30 a.m. on 21 September 2018. In connection with the NEX
Admission, the Company was required to publish the NEX Application
Announcement and the announcement was published at the date of this
document. The Directors anticipate that NEX Admission will become
effective in accordance with the NEX Rules and that dealings in the
Ordinary Shares (as continued to Bermuda) on the NEX Exchange
Growth Market will commence at 8.00 a.m. on 21 September 2018.
The Company also has unsecured loan notes admitted to trading on
the NEX Exchange Growth Market, which will remain so admitted
following completion of the Migration. Details of the unsecured
loan notes can be found on the NEX Exchange Growth Market's website
(https://www.nexexchange.com/member?securityid=2074413).
Suspension of dealings of the Ordinary Shares on AIM and the NEX
Exchange Growth Market
Dealings in the Ordinary Shares on AIM and the NEX Exchange
Growth Market will be suspended from 8.00 a.m. on the business day
following completion of the Migration until AIM Admission and NEX
Admission, at which point dealings in the Ordinary Shares (as
continued to Bermuda) on the NEX Exchange Growth Market will
commence. This period of suspension of dealings of the Ordinary
Shares on AIM and the NEX Exchange Growth Market is required whilst
a Bermudian ISIN is obtained in respect of the Ordinary Shares from
the Bermuda Stock Exchange.
A Bermudian ISIN can only be procured following completion of
the Migration and it is anticipated that this process, together
with the necessary applications to be made with the London Stock
Exchange, the NEX Exchange and Euroclear in respect of the
Bermudian ISIN, will take up to six business days to complete.
Without a Bermudian ISIN the Ordinary Shares cannot be re-admitted
to AIM or the NEX Exchange Growth Market.
Shareholder irrevocable undertakings
Irrevocable undertakings to vote in favour of the Resolutions
have been received in respect of 9,815,399 Ordinary Shares,
representing, in aggregate, approximately 34.68 per cent. of the
Company's Ordinary Shares (excluding Ordinary Shares held in
treasury).
General Meeting
Set out in the Circular is the Notice convening the General
Meeting to be held at Ordnance House, 31 Pier Road, St Helier,
Jersey, JE4 8PW on 24 August 2018 at 12.00 noon at which the
Resolutions will be proposed. Resolution 1 and Resolution 2 are
detailed in the Circular published today.
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
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