TIDMQIL
RNS Number : 9100L
Qannas Investments Limited
24 July 2017
This announcement replaces the announcement released at 07:00am
on 21 July 2017 (RNS Number 6898L). The second item on the
timetable incorrectly stated "Latest time and date for receipt of
Tender Offer Application Forms" this should have read "Tender Offer
opens".
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, INTO ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A
VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
QANNAS INVESTMENTS LIMITED
Tender Offer to purchase up to 8,888,889 Ordinary Shares at a
price of US$0.90 per Ordinary Share
Publication of Circular
Possible change in Investment Policy
Introduction
Qannas Investments Limited (the "Company" or "QIL"), the
closed-ended investment company listed on the AIM market (AIM:QIL),
is pleased to announce that it intends to return cash to Qualifying
Shareholders by way of a Tender Offer.
Up to 8,888,889 Ordinary Shares, representing approximately 12.9
per cent. of the Company's issued share capital, may be purchased
by the Company pursuant to the Tender Offer, to be satisfied by way
of a repurchase of shares out of capital. The price to be paid for
each Ordinary Share subject to the Tender Offer is US$0.90. If the
maximum number of Ordinary Shares under the Tender Offer is
purchased, this will result in an amount of approximately $8.00
million being paid to Qualifying Shareholders.
Background and Reasons for the Tender Offer
The Board has always maintained that distributions are an
essential principle of the Investment Strategy and the Company
intends to continue to return excess funds to Shareholders,
dependent on, among other things, market conditions and the
Company's investment pipeline. Historically, distributions have
usually been made by way of dividend (with the exception of a
previous tender offer effected on 25 November 2015) out of
distributable profits. The Board is aware, following discussions
with certain Shareholders, that at this time a return of capital is
preferable to any new or further investments by the Company. The
Company does not currently have sufficient distributable profits to
do this by way of a dividend, and therefore the Company has decided
that it would be appropriate to offer all Qualifying Shareholders
the opportunity to realise some of their investment in the Company
by means of a tender offer of approximately $8 million which will
be effected as a repurchase out of capital (which includes all
costs associated with making the Tender Offer).
Market Outlook and Investment Manager Report on website
On 30 June 2017 the Company released its annual results for the
year ended 31 December 2016. The Board refers you to that
announcement for a full description for the Company's financial
position and prospects for the future.
The Board also draws your attention to Eagle's View published by
the Investment Manager which provides updates on QIL's current
investments (available on the Company's website
www.qannasinvestments.com). An extract from which is reproduced in
the Circular. Shareholders must note that this information is
unaudited management information and should also bear in mind
Section 6 of Eagle's View which contains the investment manager's
valuation methodology and certain legal caveats regarding this
information.
Investment Policy And Investment Strategy
While, since its IPO in March 2012, QIL has invested across
different investment themes and has successfully built up a diverse
portfolio of investments spread across the Middle East, Eastern
Europe and Central London, the Board, together with ADCM, the
Company's Investment Manager, have considered the current
Investment Strategy and have concluded that the diverse nature of
the Company's portfolio is not currently attractive to
institutional investors and investors outside of the GCC countries.
Consequently, the Board believes that the current Investment
Strategy is holding back the Board and ADCM's growth plans for the
Company. The Board is therefore embarking on a review of the
Company's Investment Strategy, which will be presented to
Shareholders in due course. Pending completion of such review, as
noted in the annual results for the year ended 31 December 2016,
the Board is recommending that substantially all of the Company's
existing investments be realised and that the proceeds will be used
to repay debt and make distributions to shareholders.
Accordingly, the Company intends to propose at the Company's
forthcoming annual general meeting ("AGM") certain changes to the
Company's Investment Policy, which will result in existing
investments being realised in an orderly fashion over the next one
to two years pending a decision on a new Investment Strategy.
Further details of the proposed change in Investment Policy (the
"Proposal") is set out below. Further announcements in respect of
the Proposal will be circulated to shareholders in the Company's
Notice of AGM in due course, and not the subject of the
Circular
The Board, having taken the advice of ADCM, intend to propose
that the Company's Investment Policy be amended such:
-- that no further investments will be made until such time as a
new Investment Policy be determined by the Board and approved by
Shareholders; and
-- that the Company start a process of managed realisations with
a view to substantially all of its investments being realised by 31
December 2019 and the cash generated from such realisations being
used to repay the Company's existing borrowings, with any excess
being returned progressively to Shareholders over this period.
The Board believes the Proposal will enable the Company to
achieve a better return for Shareholders than the possible
alternative of immediately realising the Company's portfolio.
Further, the Board believes that, by developing a new Investment
Strategy, it will be able to broaden the appeal of the Company to
prospective new shareholders.
Details of the Tender Offer
The Company is making an offer to purchase up to 8,888,889
Ordinary Shares, representing approximately 12.9 per cent. of the
Company's issued share capital at the Purchase Price. The Purchase
Price represents a 4.3 per cent. discount to the audited Net Asset
Value of $0.94 per Ordinary Share as at 31 December 2016. If the
maximum number of Ordinary Shares under the Tender Offer is
purchased, the Company's issued share capital (excluding any
Ordinary Shares held in treasury) will be reduced by 8,888,889
Ordinary Shares to 59,939,712 Ordinary Shares.
The Tender Offer is open to all Qualifying Shareholders on the
Register at the Record Time. Qualifying Shareholders are invited to
participate in the Tender Offer by tendering up to, subject to the
below, a maximum of 12.9 per cent. of the Ordinary Shares and
Depositary Interests registered in their name at the Record Time
(rounded down to the nearest whole Ordinary Share), such percentage
to be rounded downwards in the event that any Ordinary Shares are
,issued before the Record Time. Qualifying Shareholders are
entitled to tender such lower proportion of their Tender Offer
Entitlement as they may see fit.
The Tender Offer will also present Qualifying Shareholders with
an opportunity to sell more than their Tender Offer Entitlement to
the extent that Qualifying Shareholders tender less than their full
Tender Offer Entitlement. If the number of Ordinary Shares tendered
exceeds 8,888,889 and if and to the extent that any Qualifying
Shareholder has tendered less than his/her Tender Offer
Entitlement, surplus tenders will be accepted in proportion to the
number of additional Ordinary Shares tendered so that the total
number of Ordinary Shares purchased pursuant to the Tender Offer
does not exceed 8,888,889.
Successfully tendered Ordinary Shares accepted by the Company
(with such decision being at the Company's sole discretion) will be
held in treasury by the Company. The overall number of Ordinary
Shares issued to current Shareholders will therefore be reduced by
the number of Ordinary Shares so purchased. The practical effect of
this is that each remaining issued Ordinary Share (excluding any
Ordinary Shares held in treasury by the Company) will, immediately
following the Tender Offer, represent a greater percentage of the
Company's available share capital than it does at present.
Certain of the Directors and the Investment Manager intend to
participate in the Tender Offer in respect of their holdings of
Ordinary Shares
Expected Timetable of Events*
Announcement of Tender Offer and publication 21 July 2017
of the Circular
Tender Offer opens 21 July 2017
Closing Time 1.00 p.m. on 4 August
Record Time 5.00 p.m. on 4 August
Result of Tender Offer announced By 8.00 a.m. on 9 August
CREST accounts credited for revised 10 August
holdings of Ordinary Shares
Cheques and balancing share certificates By 18 August
despatched for certificated Ordinary
Shares purchased pursuant to the Tender
Offer and payment through CREST for
uncertificated Ordinary Shares purchased
pursuant to the Tender Offer
*All times shown in this Circular are London times unless
otherwise stated. The dates and times given are indicative only and
are based on the Company's current expectations and may be subject
to change. If any of the times and/or dates above change, the
revised times and/or dates will be notified to Shareholders by
announcement through the Regulatory News Service of the London
Stock Exchange.
The Circular
The Circular that will be sent to Shareholders today will
contain the formal terms of the Tender Offer, together with details
on how Qualifying Shareholders can participate in the Tender Offer,
if they wish to do so. The Circular will shortly be available on
the Company's website at
www.qannasinvestments.com/other-documents/.
Terms used and not defined in this announcement bear the meaning
given to them in the Circular.
For further information please contact:
Qannas Investments Limited Tel: 01534 818 022
Vinod Rajput
ADCM Ltd. (Investment Manager) Tel: +971 2 639 0099
Mustafa Kheriba
finnCap Ltd Tel: 020 7220 0500
Henrik Persson / James Thompson (Corporate Finance)
This information is provided by RNS
The company news service from the London Stock Exchange
END
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