TIDMJPE TIDMJPEI TIDMJPEC
RNS Number : 6344U
JPMorgan Elect PLC
19 January 2017
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR
INDIRECTLY, IN OR INTO, THE UNITED STATES OF AMERICA (INCLUDING ITS
TERRITORIES AND POSSESSIONS, ANY STATE OF THE UNITED STATES AND THE
DISTRICT OF COLUMBIA), AUSTRALIA, CANADA, JAPAN, NEW ZEALAND, South
Africa, In any Member State of the EEA (other than the United
Kingdom) OR IN ANY OTHER JURISDICTION IN WHICH THE SAME WOULD BE
UNLAWFUL
This announcement is not an offer to sell, or a solicitation of
an offer to acquire, securities in the United States or in any
other jurisdiction in which the same would be unlawful. Neither
this announcement nor any part of it shall form the basis of or be
relied on in connection with or act as an inducement to enter into
any contract or commitment whatsoever.
19 January 2017
JPMorgan Elect plc
Publication of Circular and Prospectus
Further to the proposals announced in outline on 10 November
2016 for the issue of New JPM Elect Shares in connection with the
reconstruction of M&G High Income Investment Trust P.L.C.
("HIIT"), the Board of JPMorgan Elect plc (the "Company") is
pleased to announce that the Company has today published a Circular
and Prospectus in connection with the Issue.
The Board considers that the Scheme is in the best interests of
the Company and of Shareholders as a whole. Accordingly, the Board
unanimously recommends that Shareholders vote in favour of the
Proposals to be put to the General Meeting and Class Meetings, as
applicable. Each of the Notice of General Meeting, Notice of Class
Meeting of Managed Cash Shareholders, Notice of Class Meeting of
Managed Growth Shareholders and Notice of Class Meeting of Managed
Income Shareholders is set out in the shareholder circular
published by the Company today (the "Circular").
In connection with the issue of New JPM Elect Shares pursuant to
the Scheme, the Company is required by the Prospectus Rules to
publish a prospectus. As such, the Company has today published a
prospectus (the "Prospectus"), a copy of which will be available
shortly on the Company's website at www.jpmelect.co.uk.
Background to and benefits of the Scheme
HIIT was launched as an investment trust on 23 December 1996
with a fixed winding-up date of 17 March 2017. The HIIT Directors
believe that many Eligible HIIT Shareholders wish to continue their
investment in a tax efficient manner rather than simply to receive
cash in a liquidation.
Your Board and the Investment Manager regularly review the
options available for increasing the size of the Company and in
this regard have agreed with the HIIT Directors that the Company be
included as a Rollover Fund available to Eligible HIIT Shareholders
seeking a tax-efficient rollover.
As described in the Circular, the costs of the Scheme will not
be borne by existing Shareholders. As a result, and to the extent
that New JPM Elect Shares are issued under the Scheme, the Board
considers that Shareholders should benefit from the spreading of
fixed costs over a wider asset base, and a correspondingly lower
Ongoing Charges Ratio, and greater liquidity in Managed Cash
Shares, Managed Growth Shares and Managed Income Shares.
Details of the Scheme
Under the terms of the Scheme, HIIT will be wound up on 17 March
2017 by means of a members' voluntary liquidation pursuant to a
scheme of reconstruction under section 110 of the Insolvency Act
1986 (as amended) and Eligible HIIT Shareholders will have the
opportunity (subject to the passing of the HIIT Scheme Resolutions)
to realise all or part of their investment in Eligible HIIT Shares
as cash and/or to rollover all or part of their investment in
Eligible HIIT Shares into any combination of shares in the M&G
Rollover Funds and/or (subject to the passing of the Issue
Resolution and the Issue Consents) any combination of New JPM Elect
Shares.
To the extent that an Eligible HIIT Shareholder does not make a
valid Election in respect of all or part of their holding of
Eligible HIIT Shares, they will be deemed to have elected for the
M&G UK Income Distribution Fund Option for such proportion of
their holding of Eligible HIIT Shares.
In the event that the conditions to the Company's participation
in the Scheme are not satisfied, Elections for New JPM Elect Shares
pursuant to the Scheme will instead be deemed to be Elections for
the M&G UK Income Distribution Fund Option.
Under the terms of the Scheme, Eligible HIIT Shareholders who
make a valid Election for New JPM Elect Shares will receive:
-- Managed Growth Shares issued at a price equivalent to NAV plus the Issue Premium;
-- Managed Income Shares issued at a price equivalent to NAV
plus the Issue Premium; and/or
-- Managed Cash Shares issued at a price equivalent to NAV plus the Issue Premium.
In the event that the value of assets represented by Eligible
HIIT Shareholders electing to roll their interests in Eligible HIIT
Shares into the Company is less than GBP40 million then the Issue
Premium will be set at 1.0 per cent. In the event the value of such
assets exceeds or equals GBP40 million then the Issue Premium will
reduce on a straight line basis such that if the value of such
assets equals GBP70 million or more then the Issue Premium will be
set at 0.65 per cent.
The costs of the Company's participation in the Scheme will be
met, in the first instance, by the Issue Premium at which the New
JPM Elect Shares will be issued. To the extent that the Issue
Premium does not cover these costs, the Investment Manager has
agreed to meet any such shortfall. In the event that the Company
ceases to be available as a rollover option for Eligible HIIT
Shareholders then the Investment Manager has agreed to cover these
costs.
To the extent that the Issue Premium relating to a class of JPM
Elect Share amounts to more than the costs of the Scheme borne by
that class, such surplus will accrue to the benefit of the holders
of shares in that class. For these purposes, the costs of the
Scheme borne by the Company will be allocated to each class of JPM
Elect Shares in the proportion to the value of the assets to be
transferred to each Pool pursuant to the Scheme. As a result of
these arrangements, the Scheme is not expected to result in any
material increase or decrease in the NAV per share of any of the
Company's share classes.
Any transaction taxes, stamp duty/stamp duty reserve tax payable
on the transfer of assets pursuant to the Scheme to the Company
shall be borne by the Company.
The New JPM Elect Shares will rank pari passu with the JPM Elect
Shares including for dividends. In addition, it should be noted
that by issuing the New JPM Elect Shares pursuant to the Scheme the
retained revenue reserves associated with the JPM Elect Shares
will, on a per share basis, be diluted. The extent of any dilution
cannot be determined at this stage and will depend on various
factors, including the number of Eligible HIIT Shareholders rolling
their interests in Eligible HIIT Shares into the Company as well as
the share classes into which these investors elect to roll.
Conditions to the Issue
The Issue is conditional, among other things, upon:
(i) the passing of all the HIIT Scheme Resolutions to be
proposed at the HIIT Scheme Meetings (or, in each case, any
adjournment thereof) and all conditions to such HIIT Scheme
Resolutions being fulfilled;
(ii) the UK Listing Authority consenting to the amendment of the Official List to reflect the reclassification of the HIIT Shares as Reclassified Shares;
(iii) the HIIT Directors not resolving to abandon the Scheme;
(iv) the passing of the Issue Resolution and the Issue Consents; and
(v) the UK Listing Authority having agreed to admit the New JPM
Elect Shares to be issued pursuant to the Scheme to the premium
segment of the Official List and the London Stock Exchange having
agreed to admit such New JPM Elect Shares to trading on the main
market for listed securities of the London Stock Exchange.
Issue Resolution
In accordance with the requirements of the Companies Act 2006
and the Prospectus Rules, the Company is seeking Shareholder
authority to issue the New JPM Elect Shares and to disapply
pre-emption rights in respect of the issue of such New JPM Elect
Shares.
The Issue Resolution to be proposed at the General Meeting will
be proposed as a special resolution and, in order to be passed,
will require the approval of 75 per cent or more of the votes cast
at the General Meeting, whether in person or by proxy.
The Issue Resolution is conditional on the passing of each of
the Issue Consents.
Issue Consents
Given that the Issue may increase the number of JPM Elect Shares
currently in issue by more than one third, the Company is required
under the Articles to seek the consent of each class of JPM Elect
Shares for the Issue.
Each Issue Consent to be proposed at the relevant Class Meeting
will be proposed as a special resolution and, in order to be
passed, will require the approval of 75 per cent or more of the
votes cast at the relevant Class Meeting, whether in person or by
proxy.
The consent of each class of JPM Elect Shares is required in
order for the Issue to proceed.
Prospectus
In connection with the issue of New JPM Elect Shares pursuant to
the Scheme, the Company has today published a prospectus relating
to the issue of up to 440,227,031 Managed Cash Shares, 61,804,088
Managed Growth Shares and 404,374,680 Managed Income Shares. These
figures are based on the assumption that all Eligible HIIT
Shareholders participate in the Scheme and elect to roll into the
same class of JPM Elect Shares and do not make Elections to receive
cash or any combination of shares in the M&G Rollover Funds.
The actual number of New JPM Elect Shares of each class to be
issued pursuant to the Scheme will not be known until all Elections
have been made by Eligible HIIT Shareholders and Shareholders
should not take the foregoing maximum numbers of New JPM Elect
Shares as being indicative of the actual number of New JPM Elect
Shares that will be issued pursuant to the Scheme.
Recommendation
The Board considers the Proposals to be in the best interests of
the Company and Shareholders as a whole. Accordingly, the Board
recommends Shareholders vote in favour of the Proposals to be put
to the Meetings, as they intend to do in respect of their own
beneficial holdings which amount in aggregate, to 27,572 Managed
Growth Shares and 63,650 Managed Income Shares, representing 0.085
per cent of the total issued ordinary share capital of the Company
and 0.089 per cent of the total voting rights in the Company.
Expected timetable
Publication of the Circular 19 January 2017
and Prospectus
Latest time and date for receipt 9.00 a.m. on 20
of Voting instruction Forms February 2017
for the Managed Cash Class Meeting
Latest time and date for receipt 9.01 a.m. on 20
of Voting Instruction Forms February 2017
for the Managed Growth Class
Meeting
Latest time and date for receipt 9.02 a.m. on 20
of Voting Instruction Forms February 2017
for the Managed Income Class
Meeting
Latest time and date for receipt 9.03 a.m. on 20
of Voting Instruction Forms February 2017
for the General Meeting
Latest time and date for receipt 9.00 a.m. on 23
of the Form of Proxy for the February 2017
Managed Cash Class Meeting
Latest time and date for receipt 9.01 a.m. on 23
of the Form of Proxy for the February 2017
Managed Growth Class Meeting
Latest time and date for receipt 9.02 a.m. on 23
of the Form of Proxy for the February 2017
Managed Income Class Meeting
Latest time and date for receipt 9.03 a.m. on 23
of the Form of Proxy for the February 2017
General Meeting
Managed Cash Class Meeting 9.00 a.m. on 27
February 2017
Managed Growth Class Meeting 9.01 a.m. on 27
February 2017
Managed Income Class Meeting 9.02 a.m. on 27
February 2017
General Meeting 9.03 a.m. on 27
February 2017
Completion of the Scheme and 21 March 2017
issue of the New JPM Elect Shares
Each of the times and dates in the expected timetable may (where
permitted by law) be extended or brought forward without further
notice and in particular the dates relating to the Scheme and the
issue of the New JPM Elect Shares are provisional only. 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. All references to times in this
document are to London time.
A copy of the Circular and Prospectus has been submitted to the
National Storage Mechanism and will shortly be available for
inspection at www.morningstar.co.uk/uk/NSM. The Circular and
Prospectus will also shortly be available on the Company's website
at www.jpmelect.co.uk where further information on the Company can
also be found.
Capitalised terms used but not defined in this announcement will
have the same meaning as set out in the Circular dated 19 January
2017.
For further information:
JPMorgan Funds Limited
Richard Plaskett, Client
Director 020 7742 3422
Rhys Williams, Company
Secretary 020 7742 5073
Winterflood Investment
Trusts
Neil Langford
Chris Mills 020 3100 0000
This information is provided by RNS
The company news service from the London Stock Exchange
END
MSCBDGDBGXBBGRC
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