TIDMGIF
RNS Number : 5199T
Gulf Investment Fund PLC
25 March 2021
THIS ANNOUNCEMENT IS NOT FOR RELEASE, PUBLICATION OR
DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO, CANADA, JAPAN,
NEW ZEALAND AND THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER
JURISDICTION WHERE TO DO SO MAY RESULT IN THE CONTRAVENTION OF ANY
REGISTRATION OR OTHER LEGAL REQUIREMENT OF SUCH JURISDICTION
25 March 2021
Gulf Investment Fund PLC
("GIF" or the "Company")
Publication of circular
The Board of the Company announces that it has today published a
circular (the "Circular") in respect of the proposed programme of
further tender offers to be implemented by the Company, including
the Initial Tender Offer, the proposed transfer of the Company to
the Specialist Fund Segment of the London Stock Exchange and the
adoption of New Articles. The Circular contains a notice convening
an extraordinary general meeting to be held at 11.00 a.m. on 19
April 2021 (the "Extraordinary General Meeting").
Capitalised terms and expressions shall have the same meanings
as those attributed to them in the Circular.
Background
In December 2017 the Company made a number of changes, including
to broaden its Investment Policy from a largely Qatar-focussed
investment strategy to a broader Gulf Cooperation Council ("GCC")
focussed investment strategy, in order to capture the opportunities
for growth by the expanding GCC economies by investing in listed
(or soon to be listed) companies on one of the GCC exchanges.
At that time, the Board made a commitment to Shareholders to
implement a tender offer in 2020, formalised in the circular to
Shareholders published by the Company on 23 November 2020 (the
"2020 Circular"), which completed earlier this year with
approximately 44 per cent. of the issued share capital being
tendered. In light of the support from the balance of Shareholders,
the Company and the Investment Adviser committed to implement the
proposals set out below.
The Board and the Investment Adviser continue to believe the GCC
offers attractive growth opportunities for investors and continue
to view the future of the Company with confidence, expecting
healthy growth in the region as a whole.
Since December 2017, the Company's Net Asset Value per Share has
increased by 52.1 per cent., from US$1.0145 at 7 December 2017 to
US$1.5427 (unaudited) as at 11 March 2021. This compares to the
28.9 per cent. increase in the Company's benchmark, the S&P GCC
Index, over the same period. In addition, the Company has paid
dividends totalling 12 cents per Share during the same period.
Including dividends, Shareholders have enjoyed a total return of
67.2 per cent. compared to 45.6 per cent. from the S&P GCC
Index. The Company's return of 67.2 per cent. compares to the
peer-group's average return of 34.2 per cent. The Company's share
price currently trades at a 8.0 per cent. discount to NAV.
Enhanced dividend policy
The Board has introduced an enhanced dividend policy targeting
an annual dividend equivalent to 4 per cent. of Net Asset Value at
the end of the preceding year, barring any unforeseen
circumstances. The first semi-annual dividend for the year ended
2021 is expected to be paid in June 2021.
Cost reduction program
Effective from 1 January 2021, the fees paid to the Investment
Adviser have been reduced from 0.9 per cent. of net assets to 0.8
per cent. of net assets. In addition, the annual fees paid to each
Director have been reduced by 30 per cent. with effect from 1
January 2021.
Tender Offers
The Company is proposing to implement a programme of bi-annual
tender offers to be launched in March and September each year, in
each case for up to 100 per cent. of each Shareholder's holding of
Shares as at the relevant Record Date (each a "Contractual
Bi-Annual Tender Offer"), subject to a minimum size condition as
described further below. Shareholders on the Register at the
relevant Record Date will be invited to either (i) continue their
full investment in the Company; or (ii) save for Restricted
Shareholders, tender some or all of their Shares held at that date.
The Directors believe that the implementation of the Contractual
Bi-Annual Tender Offers should provide those Shareholders who want
it with the additional liquidity they require going forward.
The Company intends to seek the requisite authorities required
from its Shareholders to undertake the Contractual Bi-Annual Tender
Offers at each Annual General Meeting, the 2021 AGM being the first
such meeting at which such authorities will be sought, and to renew
those authorities annually at each Annual General Meeting
thereafter. The terms and conditions applicable to each Contractual
Bi-Annual Tender Offer, if made, are set out in Part 3 of the
Circular and will also be contained, along with certain other
specific details in connection with the Contractual Bi-Annual
Tender Offers in a given 12 month period, including all relevant
deadlines, in a circular to be distributed to Shareholders
accompanying the notice convening each Annual General Meeting (each
such circular being an "AGM Circular").
As the 2021 AGM is expected to be convened for a date in
November 2021, and following completion of the recent tender offer
in January 2021, in order to be able to offer the tender offer to
Shareholders in September 2021 the Company is required to convene
the additional Extraordinary General Meeting to seek the
authorities required to implement a first tender offer in September
2021 (the "Initial Tender Offer"). The notice convening the
Extraordinary General Meeting is set out at the end of the Circular
(the "Notice of Extraordinary General Meeting").
As it would not be in the interests of Shareholders to be
invested in a sub-scale illiquid fund, the Company shall not be
obliged to proceed with any Tender Offer where the Directors, in
their sole discretion, believe the result of the Tender Offer would
reduce the Company to such a size that it would no longer be fit
for purpose (the "Minimum Size Condition"). The Minimum Size
Condition in respect of the Initial Tender Offer shall be a post
Initial Tender Offer share capital of not less than 38,000,000
Shares (the "Initial Tender Offer Minimum Size Condition"). In the
event that applications are received in respect of the Initial
Tender Offer such that the number of Shares remaining in issue
following completion of the Initial Tender Offer will be less than
38,000,000 Shares, meaning that the Initial Tender Offer Minimum
Size Condition could not be met, the Initial Tender Offer shall not
proceed. The Company will announce via a Regulatory Information
Service on the relevant Confirmation Date whether the Initial
Tender Offer Minimum Size Condition has been met and, accordingly,
whether the Initial Tender Offer will proceed.
A Minimum Size Condition will be set in respect of each Tender
Offer. In the event the Minimum Size Condition is not met in
respect of any Tender Offer, that Tender Offer will not proceed.
The Directors will instead put forward proposals to Shareholders
for the Company to be wound up with a view to returning cash to
Shareholders or to enter into formal liquidation. The Company will
announce via a Regulatory Information Service on the relevant
Confirmation Date whether or not the relevant Tender Offer will
proceed.
The process for inviting Shareholders to participate in a Tender
Offer (including the Initial Tender Offer in due course) and
announcing, among other things, the relevant Minimum Size Condition
and the determination of the relevant Tender Price for such Tender
Offer is set out in the Circular.
Shareholders should note that completion of the Initial Tender
Offer is conditional on, inter alia, the Initial Tender Offer
Resolution and the Whitewash Resolution to be proposed at the
Extraordinary General Meeting being passed. Completion of any
subsequent Contractual Bi-Annual Tender Offer is conditional on,
inter alia, the required shareholder authorities to be proposed at
the Annual General Meeting in respect of the relevant subsequent 12
month period being passed.
Panel Waiver
As at the Latest Practicable Date the Investment Adviser held
17,319,759 Shares representing 33.4 per cent. of the voting rights
in the Company and has indicated to the Board that it does not
intend to tender any of its Shares pursuant to the Initial Tender
Offer.
Subject to the final size of the Initial Tender Offer and the
other assumptions set out in Part 4 of the Circular, the Investment
Adviser could hold up to 45.6 per cent. of the share capital of the
Company following completion of the Initial Tender Offer, which may
result in the Investment Adviser being required to make a Rule 9
Offer in cash to the remaining Shareholders to acquire their Shares
pursuant to the Takeover Code.
However, the Panel has agreed to waive such obligation to make a
Rule 9 Offer, subject to the approval of the Whitewash Resolution,
to be proposed at the Extraordinary General Meeting, by Independent
Shareholders voting on a poll. The Initial Tender Offer is
conditional on, inter alia, the Whitewash Resolution being passed.
The Initial Tender Offer Resolution is conditional upon the passing
of the Whitewash Resolution and so will therefore have the benefit
of the Panel Waiver.
The Panel Waiver obtained in respect of the Initial Tender Offer
will expire at the same time as the shareholder authority sought to
implement the Initial Tender Offer pursuant to the Initial Tender
Offer Resolution. Until such time as the Investment Adviser's
shareholding exceeds 50 per cent. of the voting rights in the
Company, it is the Directors' intention to seek an annual renewal
of the Panel Waiver from the Panel in respect of any obligation
that may arise on a Shareholder to make a Rule 9 Offer as a
consequence of the implementation of a Contractual Bi-Annual Tender
Offer, the first such renewal to be sought in advance of the 2021
AGM. Subject to a further Panel waiver being obtained, the Company
will seek approval of such waiver at the 2021 AGM, at the same time
as seeking shareholder authority to implement the first two
Contractual Bi-Annual Tender Offers for the subsequent 12 month
period. Thereafter it is the Directors' intention to seek an annual
waiver from the Panel (if required) and Shareholder approval of
that waiver at each Annual General Meeting. However, the Directors
cannot guarantee that such a waiver will be obtained or that the
relevant Shareholder or Shareholders would not be required to make
a general offer to the remaining Shareholders to acquire their
Shares.
Proposed Cancellation and Transfer
As a result of the Company's recent tender offer, the Shares
ceased to be compliant with the "public hands" requirement of the
Listing Rules (which, broadly, stipulates that 25 per cent. of the
shares of each class in a listed company should be held by
shareholders who are neither directors nor holders who own more
than a 5 per cent. holding each). This development has been
notified to the FCA, who have agreed to modify temporarily the
relevant Listing Rule to permit a decreased level of shares in
public hands for a period up until 8 September 2021, or completion
of the Proposed Cancellation and Transfer described below
(whichever is the earlier). During this time the Company will
continue to monitor its share register and keep the FCA informed of
any relevant developments as well as working towards restoring the
number of shares in public hands.
In light of this, the Board is therefore recommending the
cancellation of the Shares' listing on the Premium Segment and to
transfer the admission to trading of the Shares to the Specialist
Fund Segment. Whilst the Premium Segment offers a highly regulated
investment platform for investors, the Board has considered that
the relatively high costs associated with an admission to the
Premium Segment, alongside the ongoing eligibility requirements
with which the Company will need to comply as the Board plans for
the future of the Company, mean that an alternative listing venue
for the Shares would be in Shareholders' interests.
The Specialist Fund Segment is a dedicated market for specialist
closed ended investment funds targeting institutional, professional
and knowledgeable investors (including those who are professionally
advised) who understand, or have been advised of, the potential
risk of investing in companies admitted to the Specialist Fund
Segment. There can be no assurance that an active or liquid trading
market for the Shares will develop or, if developed, that it will
be maintained following the Company's admission to the SFS. As
such, a Shareholder's ability to sell Shares in the market may be
restricted once the Shares are admitted to the SFS. In particular,
retail Shareholders should consider whether the SFS will provide
the liquidity they may require and whether to sell their Shares
prior to the Company's transfer to the SFS. Shareholders will also
have the ability to tender Shares and exit their investment in the
Company pursuant to the Tender Offers. Shareholders who are in any
doubt as to the action they should take should consult an
appropriate independent professional adviser.
The SFS has been designed to suit a range of highly specialised
funds, including private equity funds, feeder funds, hedge funds,
both single and multi-strategy, specialist geographical funds,
funds with sophisticated structures or security types, specialist
property funds, infrastructure funds, sovereign wealth funds and
single strategy funds.
The proposed transfer to the Specialist Fund Segment will
require the cancellation of the existing listing of the Shares on
the Premium Segment and to trading on the Main Market and an
application for admission of the Shares to trading on the
Specialist Fund Segment.
Under LR 5.2.5 of the Listing Rules, the cancellation of the
Company's admission to the Premium Segment of the Official List
requires the Company to obtain the prior approval for such
cancellation of not less than 75 per cent. of all independent
Shareholders who vote in person or by proxy at a general meeting.
Therefore, the Proposed Cancellation and Transfer Resolution being
proposed at the Extraordinary General Meeting to approve the
Proposed Cancellation and Transfer is being proposed as a special
resolution and will be carried out by way of a poll.
If the Proposed Cancellation and Transfer Resolution is passed,
the Board proposes to make an application to the FCA and the London
Stock Exchange respectively for the cancellation of the Company's
listing on the Premium Segment and its trading on the Main Market
and an application to the London Stock Exchange for admission of
the Shares to trading on the Specialist Fund Segment. It is
expected that the last day of dealings in the Shares on the Main
Market will be 18 May 2021 and the Proposed Cancellation and
Transfer will take effect at 8.00 a.m. on 19 May 2021, being not
less than 20 Business Days from the passing of the Proposed
Cancellation and Transfer Resolution. Accordingly, admission of the
Shares to trading on the Specialist Fund Segment is expected to
take place, and dealings in Shares are expected to commence on the
Specialist Fund Segment, at 8.00 a.m. on 19 May 2021.
Once admitted to trading on the Specialist Fund Segment, the
Company will no longer be required by the Listing Rules to ensure
that 25 per cent. of the Shares are publicly held (as defined by
the Listing Rules) at all times, however there is still a
requirement to meet the eligibility criteria in the Admission and
Disclosure Standards applicable to Specialist Fund Segment,
including maintaining an appropriate level of Shares in public
hands.
New Articles
At present, pursuant to the Existing Articles a continuation
vote is required to be held at the 2021 AGM. In light of the
proposed Initial Tender Offer and introduction of the Contractual
Bi-Annual Tender Offers, the Board has already indicated that it
proposes to defer the continuation vote to 2023.
The details of the continuation vote will otherwise remain
unchanged, requiring the Company to propose an ordinary resolution
that the Company continues in existence to be put forward at the
end of the Annual General Meeting to be held in 2023. In the event
that the continuation resolution is not passed the Directors will
be required to put forward proposals to Shareholders to the effect
that the Company be wound up, liquidated, reorganised or unitised.
If the continuation vote is passed, notwithstanding the
implementation of the Contractual Bi-Annual Tender Offers or any
additional discount and liquidity mechanisms that may be
implemented by the Board, a further continuation vote will be
proposed at every third Annual General Meeting thereafter.
A special resolution to adopt the New Articles will be proposed
at the Extraordinary General Meeting (the "New Articles
Resolution").
Extraordinary General Meeting
The Extraordinary General Meeting has been convened for 11.00
a.m. on 19 April 2021 to take place at the offices of the Company's
Administrator, Mainstream Fund Services (IOM) Limited, at
Millennium House, 46 Athol Street, Douglas, Isle of Man IM1 1JB. At
the Extraordinary General Meeting, Shareholders will be asked to
consider and, if thought fit, pass the following Resolutions:
Whitewash Resolution
The Whitewash Resolution is an ordinary resolution to be taken
on a poll by the Independent Shareholders to waive the obligation
on the Investment Adviser which would otherwise arise under Rule 9
of the Takeover Code as a result of the implementation of the
Initial Tender Offer. The Investment Adviser has undertaken not to
vote on the Whitewash Resolution.
Initial Tender Offer Resolution
The Initial Tender Offer Resolution, which is conditional on the
Whitewash Resolution, the Proposed Cancellation and Transfer
Resolution and the New Articles Resolution being passed, is an
ordinary resolution requiring, on a show of hands, more than 50 per
cent. of Shareholders voting to vote in favour of the Initial
Tender Offer Resolution in order to be passed or, on a poll, votes
in favour of the Initial Tender Offer Resolution to be cast by
holders of more than 50 per cent. of the Shares that are voted on
the Initial Tender Offer Resolution.
Proposed Cancellation and Transfer Resolution
The Proposed Cancellation and Transfer Resolution will be
proposed as a special resolution. As the Investment Adviser holds
33.4 per cent. of the Shares, the Proposed Cancellation and
Transfer Resolution requires a majority of the votes attaching to
the Shares of Shareholders who are independent of the Investment
Adviser to be voted, whether in person or by proxy, in favour of
the resolution in order for it to be passed. Voting on the Proposed
Cancellation and Transfer Resolution will be undertaken by way of a
poll.
New Articles Resolution
Subject to the passing of the Whitewash Resolution and the
Initial Tender Offer Resolution, the New Articles Resolution will
be proposed as a special resolution requiring not less than 75 per
cent. of Shareholders voting to vote in favour in order to be
passed or, on a poll, votes in favour to be cast by holders of not
less than 75 per cent. of the Shares which are voted on the
resolution.
Irrevocable Undertaking
The Investment Adviser has provided an irrevocable undertaking
to the Company that for so long as it holds the right to exercise
voting rights attaching to 30 per cent. or more of the issued share
capital of the Company it shall exercise such voting rights in
favour of any resolution proposed in order to give effect to the
Contractual Bi-Annual Tender Offers. Accordingly, the Investment
Adviser will vote in favour of the Initial Tender Offer Resolution
at the Extraordinary General Meeting. The Investment Adviser will
not be permitted to vote on the Whitewash Resolution and has
undertaken to the Company that it will not do so.
Expected Timetable of Principal Events
Latest time and date for receipt of 11.00 a.m. on 17 April
Forms of Proxy in respect of the Extraordinary 2021
General Meeting
Extraordinary General Meeting 11.00 a.m. on 19 April
2021
Results of Extraordinary General Meeting 19 April 2021
announced((1))
Proposed Cancellation and Transfer
Expected date on which the Proposed 19 May 2021
Cancellation and Transfer will become
effective((2))
Initial Tender Offer
Tender Offer Announcement in respect September 2021
of the Initial Tender Offer
Notes:
((1)) If the Whitewash Resolution is not passed at the
Extraordinary General Meeting the Initial Tender Offer will not
proceed and the Company will make a further announcement on
alternative proposals.
((2)) Assuming the Proposed Cancellation and Transfer Resolution
is passed at the Extraordinary General Meeting the Company will
give at least 20 Business Days' notice by an announcement via a
Regulatory Information Service of the date that the Proposed
Cancellation and Transfer will become effective, the earliest
possible date on which the Proposed Cancellation and Transfer can
become effective being 19 May 2021.
Each of the times and dates in the expected timetable may 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 by an announcement through a
Regulatory Information Service provider.
All references to times are to London times.
A copy of the Circular will shortly be available for inspection
on the National Storage Mechanism at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism and is
available for download from the Company's website
www.gulfinvestmentfundplc.com/publications .
Legal Entity Identifier: 2138009DIENFWKC3PW84
For further information:
Nicholas Wilson/David Humbles +44 (0) 1624 692 600
Gulf Investment Fund plc
Ian Dungate/Suzanne Jones +44 (0) 1624 692600
Mainstream Fund Services (IOM) Limited
Sapna Shah/Alex Collins/Atholl Tweedie
+44 (0) 20 7886 2500
Panmure Gordon
William Clutterbuck +44 (0) 20 7379 5151
Maitland
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