Circular re Proposed Shareholder Offer of 5,439,493 Offer Shares at 14 pence each and Notice of General Meeting
July 22 2011 - 8:32AM
UK Regulatory
TIDMFRF
ANNOUNCEMENT
FORESIGHT 5 VCT PLC
22 JULY 2011
PROPOSED SHAREHOLDER OFFER OF 5,439,493 OFFER SHARES AT 14 PENCE EACH AND NOTICE
OF GENERAL MEETING
SUMMARY
The Company has gone through a difficult period over the last few months
culminating with the appointment of a new investment manager, Foresight Group CI
Limited ("Foresight Group"), on 24 February 2011 and the announcement of a
substantial reduction in the net asset value of the Company as at 31 March 2011.
As mentioned in the Chairman's Statement in the Half Yearly Report for the six
month period ended 31 March 2011, the Board believes the Company is in an
unsatisfactory position, being cash constrained and not being able to contribute
to the potential funding requirements of several of the investee companies if so
required. This also means that the Company cannot, at present, benefit from the
access to new dealflow from Foresight Group.
Working in conjunction with Foresight Group, the Board has a clear strategy for
the Company as well as for each of the existing investee companies. The strategy
is two-fold: (i) firstly to raise a small amount of funds through a pre-emptive
offer, at a discounted price to net asset value, to existing shareholders (other
than overseas shareholders) to be able to contribute to funding requirements for
the existing portfolio as and when they arise and (ii) to raise funds later in
the year through a public offer pursuant to a prospectus for further expansion
and diversification of the portfolio.
This Company is, therefore, posting to shareholders today a circular dated 22
July 2011 ("Circular") containing the first of these proposals, namely a
fundraising by way of a discounted preemptive offer to shareholders (other than
overseas shareholders) of 1 ordinary share of 1p each in the capital of the
Company ("Offer Shares") for every 10.14296 existing shares held ("Shareholder
Offer"). The Shareholder Offer, if fully subscribed, will raise approximately
GBP761,529 (before expenses). The Board have decided to defer seeking shareholder
authority at this time for any further proposed public offer in light of
considering potential corporate activities as referred to below. Following the
outcome of these considerations, the Board shall further write to shareholders
and, as appropriate, seek the necessary authorities to raise funds through a
public offer.
The Shareholder Offer requires the approval by shareholders, which will be
sought pursuant to resolution 1 to be proposed at the general meeting to be held
at 12.00 noon on 15 August 2011 ("General Meeting"), notice of which is also set
out in the Circular. The Board are also taking the opportunity to obtain
approval from shareholders to cancel share premium and capital redemption
reserves which will be sought pursuant to resolutions 2 and 3 to be proposed at
the General Meeting.
COMPANY UPDATE
A full summary of the financial and trading position of the Company was set out
in the Half-Yearly Report, including details of the current investment
portfolio. There has been no material change to the financial or trading
position of the Company since 31 March 2011.
The intention is that David Sebire (the Chairman) will step down following
completion of the Shareholder Offer and Catrina Holme will take over as
Chairman. At that time, Peter Dicks, who is a director on the board of the
Foresight VCTs, will be appointed as a Director. David Donnelly will continue in
his current role to help manage any corporate activity if we are successful in
future negotiations, but then David Donnelly and, potentially, Catrina Holme
will also step down as Directors.
THE SHAREHOLDER OFFER
The Board is proposing to raise up to approximately GBP761,529 (before expenses)
through the issue of up to 5,439,493 Offer Shares pursuant to the Shareholder
Offer, which is being made on a pre-emptive basis and at a discounted price to
net asset value. The Shareholder Offer is being made to all holders of ordinary
shares and C ordinary shares (other than overseas shareholders) as if the
ordinary shares and C ordinary shares represented one class of share. Successful
applicants under the Shareholder Offer will, however, only receive ordinary
shares.
Qualifying Shareholders (as defined in the Circular) have the opportunity to
apply to subscribe for Offer Shares at an issue price of 14p per Offer Share pro
rata to their holdings of existing shares as at the record date on the following
basis:
1 Offer Share for every 10.14296 existing shares
and so on in proportion for any other number of Existing Shares then held.
Entitlements to apply to subscribe for Offer Shares will be rounded down to the
nearest whole number and any fractional entitlement to Offer Shares will be
disregarded in calculating the Qualifying Shareholder's entitlement (such
fractional entitlements being aggregated and made available for take up under
applications for excess Offer Shares).
To the extent Shareholders do not validly apply for the whole of their
entitlement, such Offer Shares (together with aggregate of fractional
entitlements referred to above) will be made available to Qualifying
Shareholders. Qualifying Shareholders may apply for any number of excess Offer
Shares which will, if more than the number of excess Offer Shares available are
applied for, be allocated and satisfied pro-rata (rounding down to the nearest
whole Offer Share) to the number of shares held by the applicant on the record
date (provided that an applicant shall not be allocated more Offer Shares than
applied for).
The issue price of 14p per Offer Share represents a 28.2% discount to the
unaudited net asset value of 19.5p per ordinary share as at 31 March 2011 (this
being the most recently published net asset value). Due to the recent
significant reduction in net assets and poor performance, the Board believes
that Qualifying Shareholders should be given the opportunity to subscribe for
additional ordinary shares in the Company at a discount prior to any proposed
public offer which will be at an issue price of NAV plus costs. The Board
further believes that a discount is necessary for the Shareholder Offer to be
successful. The level of discount reflects what the Board believes to be an
appropriate discount to make the Shareholder Offer attractive yet providing for
an issue price which is above the offer price (this being 10.5p as at 20 July
2011). If a Qualifying Shareholder is eligible to receive VCT tax reliefs in
respect of the investment, the net cost of an Offer Share (taking into account
the 30% upfront income tax relief) will be 9.8p, this being a 49.7% discount to
the NAV per Ordinary Share as at 31 March 2011
SHAREHOLDER OFFER EXPECTED TIMETABLE
Record date and time for the Shareholder Offer 5.00 p.m. on 20 July 2011
Announcement of the Shareholder Offer 22 July 2011
Latest time and date for proxy forms for the General Meeting 12.00 noon.
on 13 August 2011
to be received
General Meeting 12.00 noon on 15 August 2011
Latest time and date for receipt of completed Application Forms 12.00 noon on
19 August 2011
under the Shareholder Offer
Allotment of Offer Shares and announcement of the results of the Shareholder
Offer 22 August 2011
Date of Admission and commencement of dealings of the Offer Shares 23 August
2011
Share certificates for Offer Shares despatched 31 August 2011
CANCELLATION OF SHARE PREMIUM AND CAPITAL RESERVES
The issue of new shares pursuant to the Shareholder Offer will result in the
creation of further share premium. The Board considers it appropriate to obtain
approval of the Company's shareholders at the General Meeting to cancel the
existing and further share premium attributable to shares issued pursuant to
such offer (subject to Court sanction) to create further distributable reserves
to fund distributions to Shareholders and buy-backs, to set off or write off
losses and for other corporate purposes of the Company. In addition, the Company
has a small amount standing to the credit of the capital redemption reserve
resulting from buy-backs completed by the Company and Board considers it prudent
to obtain approval of the Company's shareholders at the General Meeting to
reduce its capital, subject to confirmation by the Court.
FURTHER INFORMATION
Shareholders (other than those in a Restricted Territory (as defined in the
Circular)) will receive a copy of the Circular convening the General Meetings to
be held on 15 August 2011 at which shareholders will be invited to approve
resolutions in connection with the Shareholder Offer and other proposals. A copy
of the Circular has also been submitted to the UK Listing Authority and will be
shortly available for inspection at the National Storage Mechanism which can be
accessed at the website www.hemscott.com/nsm.do
For further information, please contact:
Foresight Fund Managers Limited
Gary Fraser
Telephone: 01732 471 809
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
Source: Foresight 5 VCT PLC via Thomson Reuters ONE
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