TIDMPGIZ TIDMPGIT TIDMPMGZ
3 November 2020
PGIT Securities 2020 PLC
Publication of Circular and Announcement of Proposals
PGIT Securities 2020 PLC ("PGIT Securities 2020" or the "Company") has today
published a circular (the "Circular") in connection with the proposals for the
reconstruction and voluntary winding-up of PGIT Securities 2020 and for a
Rollover Option for ZDP Shareholders (the "Proposals"). The Circular should be
read in conjunction with the prospectus published today relating to PMGR
Securities 2025 PLC ("PMGR Securities 2025"), (the "Prospectus"). PMGR
Securities 2025 is a new subsidiary of the Parent formed for the purpose of
issuing the New ZDP Shares.
PGIT Securities 2020 is due to be wound up on 30 November 2020 and the Existing
ZDP Shares of PGIT Securities 2020 confer a right to receive a Final Capital
Entitlement of 125.6519p per Existing ZDP Share (approximately GBP30.25 million
in total) on the winding up of PGIT Securities 2020.
The Board announces today proposals for an issue of New ZDP Shares and the
opportunity for existing ZDP Shareholders to roll over their capital
entitlement into New ZDP Shares. The Proposals provide for a members' voluntary
liquidation of PGIT Securities 2020 and scheme of reconstruction (the
"Scheme"). Under the Proposals, ZDP Shareholders may receive their Final
Capital Entitlement in cash upon the winding-up of PGIT Securities 2020 or
elect to roll over some or all of their investment into New ZDP Shares to be
issued by PMGR Securities 2025.
In addition to the Scheme, the Proposals also include a conditional Placing of
further New ZDP Shares. ZDP Shareholders seeking to roll over their investment
into New ZDP Shares will be allocated New ZDP Shares in preference to any
subscriptions from investors under the Placing. Accordingly, if there is
sufficient demand for the Rollover Option from ZDP Shareholders, it is possible
that no New ZDP Shares will be issued pursuant to the Placing and will only be
issued to the Existing ZDP shareholders.
Under the Proposals, PGIT Securities 2020 will be wound up on 30 November 2020.
ZDP Shareholders who are on the Register as at 6.00 p.m. on 20 November 2020
will be entitled to elect:
i. to roll over some or all of their investment into New ZDP Shares issued by
PMGR Securities 2025, a newly incorporated subsidiary of the Parent (the
"Rollover Option"); and/or
ii. to receive cash in the liquidation in respect of all or part of their
investment in PGIT Securities 2020 (the "Cash Option").
New ZDP Shares are also being made available under the Placing (subject also to
the Maximum Issue
Size). Shareholders who are considering applying for further New ZDP Shares in
the Placing should
contact their broker or N+1 Singer.
The latest time and date for receipt of Elections or Transfer to Escrow (TTE)
Instructions from ZDP shareholders is 1.00 p.m. on 20 November. If a sufficient
number of ZDP Shareholders were to elect for the Rollover Option and assuming
that the Maximum Issue Size is achieved, such ZDP Shareholders may be scaled
back in the manner set out in the Circular.
A copy of the Circular and Prospectus will be submitted to the National Storage
Mechanism and will shortly be available for inspection at: https://
data.fca.org.uk/#/nsm/nationalstoragemechanism and on the Company's website:
www.premierfunds.co.uk/premier-global-infrastructure-trust-plc. Copies of the
Circular and Prospectus, together with a Form of Election (for those ZDP
Shareholders holding their Existing ZDP Shares in certificated form), will be
sent to ZDP Shareholders of the Company today.
Capitalised terms used but not defined in this announcement have the meanings
set out in the Circular dated 3 November 2020.
Contact:
Premier Fund Managers Limited
01483 306090
Claire Long (claire.long@premiermiton.com)
James Smith (james.smith@premiermiton.com)
N+1 Singer
020 7496 3000
James Maxwell (james.maxwell@n1singer.com)
Iqra Amin (iqra.amin@n1singer.com)
The following is a reproduction, without material adjustment, of the Chairman's
Letter to ZDP Shareholders which is contained within the Circular:
Dear ZDP Shareholder
Reconstruction and voluntary winding-up of PGIT Securities 2020 PLC
1. Introduction
As you will be aware, PGIT Securities 2020 PLC ("PGIT Securities 2020") is due
to be wound up on 30 November 2020 and ZDP Shareholders repaid their Final
Capital Entitlement of 125.6519p per Existing ZDP Share.
Your Board announced today proposals for an issue of New ZDP Shares and the
opportunity for existing ZDP Shareholders to roll over their capital
entitlement into New ZDP Shares.
The Proposals provide for a members' voluntary liquidation of PGIT Securities
2020 and scheme of reconstruction pursuant to section 110 of the Insolvency Act
1986. Under the Proposals, ZDP Shareholders may receive their Final Capital
Entitlement in cash upon the winding-up of PGIT Securities 2020 or elect to
roll over some or all of their investment into New ZDP Shares to be issued by
PMGR Securities 2025 PLC ("PMGR Securities 2025"), a new subsidiary of the
Parent formed for the purpose of the Proposals. A rollover of an investment in
the Existing ZDP Shares to the New ZDP Shares issued by PMGR Securities 2025
provides an alternative to the cash payment to which ZDP Shareholders are
entitled upon a straight winding-up and will allow ZDP Shareholders who elect
for the rollover to continue their investment in the Group. ZDP Shareholders
who elect to roll over their investment into New ZDP Shares should not
generally be treated as making a disposal for the purposes of UK taxation of
chargeable gains as a result of doing so (as to which, please see the
discussion at paragraph 2 of Part 5 of the Circular).
In addition to the Scheme, the Proposals also include a conditional Placing of
further New ZDP Shares. The number of New ZDP Shares to be issued pursuant to
the overall Issue is limited to the Maximum Issue Size, which is designed to
protect New ZDP Shareholders by ensuring that the Cover on the New ZDP Shares
as at Admission (calculated by reference to the Gross Assets as at 20 November
2020, the deadline for submission of Elections) is at least the Minimum Initial
Cover. ZDP Shareholders seeking to roll over their investment into New ZDP
Shares will be allocated New ZDP Shares in preference to any subscriptions from
investors under the Placing. Accordingly, if there is sufficient demand for the
Rollover Option from ZDP Shareholders, it is possible that no New ZDP Shares
will be issued pursuant to the Placing. Shareholders who are considering
applying for further New ZDP Shares in the Placing should contact their broker
or N+1 Singer.
The Proposals are not conditional on the approval of ZDP Shareholders or
Ordinary Shareholders of the Parent. The Proposals are conditional on the
approval of the ordinary shareholder of PGIT Securities 2020, which is the
Parent, at the General Meetings. The Circular is being sent to provide ZDP
Shareholders with information regarding the Proposals and the Elections that
may be made in respect of the Scheme.
Details of the action to be taken by ZDP Shareholders in relation to the
Proposals are set out in Part 2 of the Circular.
It is important that ZDP Shareholders read Part 2 carefully and, if they wish
to make a full or partial election for New ZDP Shares, where their Existing ZDP
Shares are held in certificated form, return their Forms of Election or, where
their Existing ZDP Shares are held in uncertificated form, submit their
transfer to escrow instruction via CREST (TTE Instruction) so as to be received
no later than 1.00 p.m. on 20 November 2020.
Failure to return or submit a valid Form of Election or a TTE Instruction in
CREST or the return or submission of a Form of Election or a TTE Instruction
which is not validly completed will result in the relevant ZDP Shareholder
being deemed to have elected for the Cash Option.
The attention of Shareholders is drawn to paragraph 2 of Part 5 of the Circular
which sets out a general guide to certain aspects of current UK taxation law
and HMRC published practice.
The Circular should be read in conjunction with the accompanying Prospectus
relating to PMGR Securities 2025.
2.Key features of the New ZDP Shares
The New ZDP Shares:
* will have a repayment date of 28 November 2025 and will effectively rank as
to capital in priority to the Ordinary Shares;
* provide for a pre-determined level of capital growth equivalent to a gross
redemption yield of 5.0 per cent. per annum based on the issue price of a
New ZDP Share of 100p (subject to the Group having sufficient assets at the
relevant time), which represents an increase from the gross redemption
yield of 4.75 per cent. provided for by the Existing ZDP Shares; and
* subject to the Group having sufficient assets at the time and assuming the
Scheme is effective on 30 November 2020, will carry the right to be paid
the 2025 Final Capital Entitlement of 127.6111p in cash on 28 November
2025.
The issue price will be 100 pence per New ZDP Share. Accordingly, if a ZDP
Shareholder were to elect for the Rollover Option, where there is no scaling
back, they would receive 1,256 New ZDP Shares for every 1,000 Existing ZDP
Shares held on the Effective Date (entitlements to New ZDP Shares under the
Scheme will be rounded down to the nearest whole number).
However, the number of New ZDP Shares that may be issued under the Issue is
limited to the Maximum Issue Size. The Board has determined that the gearing to
be provided to the Group by the New ZDP Shares will be no greater than the
gearing currently provided to the Group by the Existing ZDP Shares.
Accordingly, if a sufficient number of ZDP Shareholders were to elect for the
Rollover Option and assuming that the Maximum Issue Size is achieved, such ZDP
Shareholders may be scaled back in accordance with paragraph 14 of Part 4 of
the Circular and would receive part of their Final Capital Entitlement in cash.
By way of example, if all ZDP Shareholders elect for the Rollover Option, each
ZDP Shareholder will be scaled back to the extent that they would receive
approximately 80.7 per cent. of their Final Capital Entitlement in New ZDP
Shares and the remainder of their Final Capital Entitlement in cash.
On the assumption that (i) Gross Assets on 20 November 2020 are GBP55.8 million,
which were the Gross Assets as at the Latest Practicable Date; and (ii) the
Maximum Issue Size is achieved, then it is expected that following completion
of the Scheme, Gross Assets would need to fall by 33.3 per cent. in total, and
5.9 per cent. annually, in order for the New ZDP Shares not to receive their
full 2025 Final Capital Entitlement of 127.6111p per New ZDP Share on 28
November 2025.
3.Background to the Proposals
In December 2015, the Parent approved proposals to re-organise the Group by way
of a scheme of reconstruction, pursuant to which PEWT Securities, a
wholly-owned subsidiary of the Parent formed in 2014 for the sole purpose of
issuing zero dividend preference shares in the Group, was placed into members'
voluntary liquidation and old zero dividend preference shares issued by PEWT
Securities were replaced with the Existing ZDP Shares issued by PGIT Securities
2020, a wholly-owned subsidiary of the Parent incorporated in 2015 for the
purposes of the reconstruction.
As part of that reconstruction, holders of zero dividend preference shares
maturing in 2015 were afforded the opportunity to elect (i) to receive cash in
the liquidation in respect of all or part of their investment in PEWT
Securities or (ii) to roll over some or all of their investment in PEWT
Securities into the Existing ZDP Shares in order to receive a final cash
entitled in respect of each Existing ZDP Share held on a winding-up of PGIT
Securities 2020 on 30 November 2020. A significant number of holders of the old
zero dividend preference shares elected to do so.
At the time of the reconstruction in 2015, the Board informed Shareholders of
its intention to consider the options that may be available for refinancing the
Existing ZDP Shares nearer to the planned winding-up of PGIT Securities 2020.
The Board stated that it may consider the issuance by the Group of a follow-on
zero dividend preference share at that time, to allow ZDP Shareholders who wish
to do so the opportunity to roll over their investment into a similar
investment in the event that the Board believed there would be sufficient
demand for such an investment.
The Group's current capital structure would provide ZDP Shareholders with a
Final Capital Entitlement of 125.6519p in cash per Existing ZDP Share on the
planned winding-up date of PGIT Securities 2020 of 30 November 2020, and the
Articles provide for PGIT Securities 2020 to be wound up on that date. On a
winding-up, Shareholders' entitlements, after payment of PGIT Securities 2020's
creditors, are determined in accordance with the Articles as follows:
i. first, there shall be paid to ZDP Shareholders an amount equal 100p per
Existing ZDP Share as increased with effect from and including 1 January
2016 on a daily basis at such compounded rate as results in a final
entitlement on 30 November 2020 of 125.6519p per Existing ZDP Share; and
ii. secondly, the Parent, as the holder of all of the ordinary shares of PGIT
Securities 2020, shall receive the surplus assets of PGIT Securities 2020
available for distribution.
Accordingly, the Group is committed to repaying the Final Capital Entitlement
of the Existing ZDP Shares of approximately GBP30.25 million on 30 November 2020.
Against this background, the Board requested the Group's Investment Manager,
Premier Fund Managers Limited, and its financial adviser, N+1 Singer, to
consult with certain of the Group's ZDP Shareholders to ascertain their views.
There was support for an option that would enable ZDP Shareholders to roll over
all or some of their investment in Existing ZDP Shares, in a tax efficient
manner, into New ZDP Shares issued by the Group. This option is being provided
in conjunction with a Placing of further New ZDP Shares which may be issued to
ZDP Shareholders who wish to increase their holdings of New ZDP shares and to
third party investors.
The purpose of the Circular is to explain the Proposals and the actions
required to be taken in order for ZDP Shareholders to make their Election in
respect of the Proposals. The Board, which has been advised by N+1 Singer,
believes that the Proposals are in the best interests of Shareholders as a
whole and of ZDP Shareholders as a class. In providing its advice, N+1 Singer
has taken into account the commercial assessments of the Board.
ZDP Shareholders are recommended to make an Election for the Option(s) they
would prefer in respect of their Existing ZDP Shares. The Form of Election need
only be completed, or a TTE Instruction submitted, as appropriate, by ZDP
Shareholders who wish to make a full or partial election for New ZDP Shares
pursuant to the Rollover Option. If ZDP Shareholders wish to receive the Cash
Option, no action needs to be taken.
1. The Proposals
4.1Options available to ZDP Shareholders
Under the Proposals, PGIT Securities 2020 will be wound up on 30 November 2020.
ZDP Shareholders who are on the Register as at 6.00 p.m. on 20 November 2020
will be entitled to elect:
i. to roll over some or all of their investment into New ZDP Shares issued by
PMGR Securities 2025, a newly incorporated subsidiary of the Parent (the "
Rollover Option"); and/or
ii. to receive cash in the liquidation in respect of all or part of their
investment in PGIT Securities 2020 (the "Cash Option").
ZDP Shareholders may make different Elections in respect of different parts of
their holdings of Existing ZDP Shares, as suits their personal investment
requirements.
The default option under the Scheme will be the Cash Option,
meaning that a ZDP Shareholder who, in respect of all or part of his or
her holding of Existing ZDP Shares, fails to submit a valid Form of Election or
a valid TTE Instruction, as appropriate, by the due date or submits a Form of
Election which has not been duly completed or an invalid TTE Instruction, will
be deemed to have elected for the Cash Option in respect of such holding.
Subject to paragraph 9 of Part 4 of the Circular, Overseas Shareholders will be
deemed to have elected for the Cash Option in respect of their entire holding
of Existing ZDP Shares.
If the number of New ZDP Shares which would be issuable pursuant to the Scheme
as a result of giving full effect to Elections for the Rollover Option would
exceed the Maximum Issue Size, then the number of New ZDP Shares issuable
pursuant to the Scheme shall be scaled back in the manner set out in paragraph
14 of Part 4 of the Circular.
New ZDP Shares are also being made available under the Placing (subject also to
the Maximum Issue Size). Shareholders who are considering applying for further
New ZDP Shares in the Placing should contact their broker or N+1 Singer.
4.2Benefits of the Proposals
The Proposals offer ZDP Shareholders the option of receiving their Final
Capital Entitlement in cash or, if they prefer, the opportunity to roll over
all or part of their capital entitlement into New ZDP Shares issued by the
Group. ZDP Shareholders who may be subject to UK capital gains tax or
corporation tax on gains on their investment in PGIT Securities 2020 should
generally be able to roll over their investment into PMGR Securities 2025
without crystallising an immediate charge to UK capital gains tax or
corporation tax on gains (as to which, please see the discussion at paragraph 2
of Part 5 of the Circular).
The choice between the Options available under the Proposals will be a matter
for each ZDP Shareholder to decide and will be influenced by their individual
circumstances and investment objectives. ZDP Shareholders should, before making
any Election, read carefully the information on the Options in the Circular and
the accompanying Prospectus in relation to PMGR Securities 2025 and the New ZDP
Shares.
Shareholders who are in any doubt as to the contents of the Circular or as to
the action to be taken should immediately seek their own personal financial
advice from their independent professional adviser authorised under the
Financial Services and Markets Act 2000.
4.3Features of the proposed capital structure and the New ZDP Shares
In planning the proposed capital structure of the Group, the Directors have had
regard to the requirement to maintain a balance between, on the one hand, the
objective of providing a competitive yield and security of repayment for the
New ZDP Shareholders and, on the other hand, the objective of providing
Ordinary Shareholders with a high level of income coupled with capital growth
over the long-term.
The New ZDP Shares will be issued by PMGR Securities 2025, a newly formed
subsidiary of the Parent. The number of New ZDP Shares that may be issued under
the Issue is limited to the Maximum Issue
Size. On the assumption that Gross Assets on 20 November 2020 are GBP55.8
million, which were the Gross Assets as at the Latest Practicable Date, and the
Maximum Issue Size is achieved, then it is expected that following completion
of the Scheme there will be 24,424,500 New ZDP Shares in issue. The ordinary
shares of PMGR Securities 2025 are unlisted and are all held by the Parent.
The New ZDP Shares will have a repayment date of 28 November 2025 and will
effectively rank as to capital in priority to the Ordinary Shares (as is the
case with the Existing ZDP Shares, holders of Ordinary Shares will be, in
effect, entitled to the net revenue profits of the Group (including accumulated
revenue reserves) in priority to the repayment of the 2025 Final Capital
Entitlement). The objective of PMGR Securities 2025 is to repay the 2025 Final
Capital Entitlement on the 2025 ZDP Repayment Date.
The New ZDP Shares should provide a pre-determined level of capital growth
equivalent to a gross redemption yield of 5.0 per cent. per annum based on the
issue price of a New ZDP Share of 100p (subject to the Group having sufficient
assets available at the relevant time), which represents an increase from the
gross redemption yield of 4.75 per cent. provided for by the Existing ZDP
Shares. The initial capital entitlement of 100p per New ZDP Share will be
increased from Admission at a daily compound rate to the 2025 ZDP Repayment
Date, being 28 November 2025 on which PMGR Securities 2025 is expected to be
wound up. Subject to the Group having sufficient assets at the time and
assuming the Scheme is effective on 30 November 2020, the 2025 Final Capital
Entitlement of a New ZDP Share will be 127.6111p. The capital entitlement of
the New ZDP Shares will rank behind the Group's other liabilities but ahead of
the capital entitlement of the Ordinary Shareholders (holders of Ordinary
Shares being entitled to the net revenue profits of the Group in priority to
the repayment of the 2025 Final Capital Entitlement).
The New ZDP Shares will be admitted to a standard listing on the Official List
and traded on the premium segment of the London Stock Exchange's main market.
Further information on the New ZDP Shares, including the rights attaching to
them and certain undertakings given by the Group for the benefit of the New ZDP
Shareholders, are set out in the Prospectus accompanying the Circular.
4.4Intra-Group arrangements
PMGR Securities 2025 will not directly hold any of the Group's portfolio of
investments, which will continue to be held by the Parent.
In order for PMGR Securities 2025 to have sufficient assets to repay the 2025
Final Capital Entitlement on the 2025 ZDP Repayment Date (or the accrued
capital entitlement of New ZDP Shares at an earlier date, if required), the
Parent and PMGR Securities 2025 have entered into arrangements whereby the
assets of the Parent will effectively be made available to meet the repayment
entitlements of the New ZDP Shares.
The Parent has entered into the New Undertaking Agreement with PMGR Securities
2025 by which the Parent has undertaken to contribute (by way of gift, capital
contribution or otherwise) such amount as will result in PMGR Securities 2025
having sufficient assets to satisfy the then current capital entitlement or, as
the case may be, the 2025 Final Capital Entitlement of the New ZDP Shares on
the 2025 ZDP Repayment Date or any earlier winding up of PMGR Securities 2025.
The Parent has also agreed to meet all of the running costs of PMGR Securities
2025.
The Parent has given certain undertakings for the benefit of PMGR Securities
2025 and the New ZDP Shareholders whilst the Parent remains liable to make any
payment under the New Undertaking Agreement.
In addition, pursuant to the New Undertaking Agreement, PMGR Securities 2025
has agreed to transfer to the Parent an amount equal to the value of the assets
(other than the Rollover Option Undertaking described in paragraph 4.5 below)
received by it from PGIT Securities 2020 pursuant to the terms of the Scheme
and any net proceeds pursuant to the Placing (further details of which are set
out at paragraph 4.6 below).
The arrangements outlined above will effectively result in all of the Group's
net assets being available to meet the repayment entitlements of the New ZDP
Shares. The repayment entitlements of the New ZDP Shares will effectively rank
in priority to the capital entitlement of the Ordinary Shares, although they
will be subordinated to any bank borrowings the Group may incur (although it is
the Parent's policy not to employ any long-term gearing other than by way of
the issue of zero dividend preference shares) and other creditors from time to
time. As is the case with the Existing ZDP Shares, holders of Ordinary Shares
will be entitled to the net revenue profits of the Group, including revenue
reserves, in priority to the repayment of the 2025 Final Capital Entitlement.
The terms of the agreements referred to above are summarised in paragraph 9 of
Part 7 of the Prospectus. The provisions of the articles of association of PMGR
Securities 2025 are summarised in paragraph 4 of Part 7 of the Prospectus. The
rights attached to the New ZDP Shares are also summarised in Part 3 of the
Circular.
4.5Operation of the Scheme
If the Scheme proceeds, before any assets are transferred to PMGR Securities
2025 under the Scheme or set aside to pay ZDP Shareholders who have or are
deemed to have elected for the Cash Option, the Liquidators will set aside
sufficient assets in the Liquidation Fund to meet all estimated current and
future, actual and contingent liabilities and costs which PGIT Securities 2020
has agreed to pay.
After provision for liabilities (if any) as described above has been made in
the Liquidation Fund, the assets of PGIT Securities 2020 will be appropriated
into two pools, the ZDP Cash Pool and the ZDP Rollover Pool, at the Effective
Date. The appropriation of the assets of PGIT Securities 2020 will be on the
basis of the value attributable to Elections for the Cash Option and the value
attributable to Elections for the Rollover Option. The remaining assets of PGIT
Securities 2020 will form part of the Liquidation Fund.
The only material asset of PGIT Securities 2020 is the Existing Undertaking
Agreement, by which the Parent has undertaken to contribute (by way of gift,
capital contribution or otherwise) such amount as will result in PGIT
Securities 2020 having sufficient assets to satisfy the then current or, as the
case may be, Final Capital Entitlement of the Existing ZDP Shares on 30
November 2020, or any earlier winding up of PGIT Securities 2020. PGIT
Securities 2020 currently has no liabilities other than the Final Capital
Entitlement of ZDP Shareholders.
Accordingly, the split of assets into the Liquidation Fund, Cash Pool and
Rollover Pool will be achieved by way of terminating and restating the Existing
Undertaking Agreement, as at the Effective Date, such that the undertaking
contained therein is split into two new undertakings:
i. an undertaking from the Parent to contribute such amount as will result in
PGIT Securities 2020 having sufficient assets to satisfy the aggregate
Final Capital Entitlements of all those ZDP Shareholders electing for
the Cash Option and any other liabilities of PGIT Securities 2020 (the "
PGIT Securities 2020 Undertaking"); and
ii. an undertaking from the Parent to contribute such amount as will result in
PGIT Securities 2020 having sufficient assets to satisfy the aggregate
Final Capital Entitlements of all those ZDP Shareholders electing for
the Rollover Option (the "Rollover Option Undertaking").
In order to give effect to the Elections made (or deemed to be made) by ZDP
Shareholders, the Existing ZDP Shares will be split into two classes of
Reclassified Shares. Reclassified Shares will either have "A" rights, in
respect of the Rollover Option, or "B" rights, in respect of the Cash Option.
On the Effective Date, the Liquidators will transfer the assets in the ZDP
Rollover Pool (the only material asset of which is expected to be the Rollover
Option Undertaking) to PMGR Securities 2025. In consideration for such
transfer, New ZDP Shares will be issued fully paid at a subscription price of
100p to ZDP Shareholders with "A" rights who have elected for New ZDP Shares.
The transfer of the ZDP Rollover Pool will be carried out in accordance with
the terms of the Transfer Agreement. Further details of the Transfer Agreement
are set out in paragraph 1 of Part 5 of the Circular. The terms of the Rollover
Option Undertaking provide that PGIT Securities 2020 shall be entitled to
assign the Rollover Option Undertaking to PMGR Securities 2025 in connection
with the
Scheme. Further details of the Rollover Option Undertaking are set out in
paragraph 9.1 of Part 7 of the Prospectus.
The ZDP Cash Pool (the only material asset of which is expected to be the PGIT
Securities 2020 Undertaking) will be used to pay the Final Capital Entitlements
of ZDP Shareholders with "B" rights who have elected, or are deemed to have
elected, for the Cash Option.
Any remaining assets of PGIT Securities 2020 in the Liquidation Fund will be
paid in cash to the Parent as holder of the ordinary shares of PGIT Securities
2020.
4.6The Maximum Issue Size and the Placing
The maximum number of New ZDP Shares that may be issued under the Issue is the
Maximum Issue Size.
If the number of New ZDP Shares which would be issuable pursuant to the Scheme
as a result of giving full effect to Elections for the Rollover Option would
exceed the Maximum Issue Size, then the number of New ZDP Shares issuable
pursuant to the Scheme shall be scaled back in the manner set out in paragraph
14 of Part 4 of the Circular.
To the extent that Elections for the Rollover Option under the Scheme do not
require such maximum number of New ZDP Shares to be issued to ZDP Shareholders,
it is intended that the excess may be issued pursuant to the Placing.
N+1 Singer will use its reasonable endeavours to procure subscribers for the
balance of New ZDP Shares up to the Maximum Issue Size. No commission will be
paid by the Group to any placee in connection with the Placing, which is not
underwritten. The Placing closes at 1.00 p.m. on 26 November 2020.
ZDP Shareholders seeking to roll over their investment into New ZDP Shares will
be allocated New ZDP Shares in preference to any subscriptions from investors
under the Placing.
A summary of the placing agreement entered into among the Parent, the AIFM,
PGIT Securities 2020 and N+1 Singer is set out in paragraph 9.5 of Part 7 of
the Prospectus.
4.7The General Meetings and winding-up of PGIT Securities 2020
The implementation of the Proposals requires the passing of the Resolutions at
the First General Meeting and the Second General Meeting. Neither ZDP
Shareholders nor Ordinary Shareholders are entitled to attend or vote at either
General Meeting. The Parent, as the holder of all of the ordinary shares in the
capital of PGIT Securities 2020, shall be the only person entitled to attend
and vote at the General Meetings.
At the First General Meeting, special resolutions will be proposed to: (i)
re-classify the rights attaching to the Existing ZDP Shares such that those ZDP
Shareholders who elect, or are deemed to elect, to roll over into New ZDP
Shares will hold shares with "A" rights giving them the right to receive New
ZDP Shares on a winding-up of PGIT Securities 2020 and those ZDP Shareholders
who elect, or are deemed to elect, to receive cash will hold Existing ZDP
Shares with "B" rights giving them the right to receive cash on the winding-up
of PGIT Securities 2020; (ii) authorise the implementation of the Scheme by the
Liquidators including an application to delist the Existing ZDP Shares from the
Official List of the FCA; and (iii) amend the Articles for the purposes of the
implementation of the Scheme. The amendments to the Articles are set out in
full in the Appendix to the Circular.
The First General Meeting has been convened for 10.00 a.m. on 23 November 2020
to be held at the offices of Stephenson Harwood LLP at 1 Finsbury Circus,
London EC2M 7SH, United Kingdom. Neither ZDP Shareholders nor Ordinary
Shareholders may attend or vote at the First General Meeting.
At the Second General Meeting, special resolutions will be proposed to: (i)
wind up PGIT Securities 2020 voluntarily; (ii) appoint the Liquidators; and
(iii) confer certain powers on the Liquidators.
The Second General Meeting has been convened for 10.00 a.m. on 30 November 2020
to be held at the offices of Stephenson Harwood LLP at 1 Finsbury Circus,
London EC2M 7SH, United Kingdom. Neither ZDP Shareholders nor Ordinary
Shareholders may attend or vote at the Second General Meeting.
4.8Dealings in Existing ZDP Shares and Reclassified Shares
It is advised that the last day for trading in the Existing ZDP Shares on the
London Stock Exchange for normal settlement (in order to enable settlement
prior to the Record Date) will be 17 November 2020. As from 23 November 2020,
dealings shall be for cash settlement only and, in the case of certificated
Existing ZDP Shares, will only be registered if documents of title are
delivered immediately.
The Record Date, being the date for determining which ZDP Shareholders are
entitled to participate in the Scheme, is 6.00 p.m. on 20 November 2020.
Application for the amendment of the Official List to reflect the Reclassified
Shares will be made, and it is expected that such amendment will become
effective, and that dealings in such Shares will commence, at 8.00 a.m. on 27
November 2020. For the purposes of dealings in the Reclassified Shares, all ZDP
Shareholders will be treated as certificated holders. It is expected that
dealings on the London Stock Exchange in the Reclassified Shares will be
suspended at 8.00 a.m. on 30 November 2020.
If ZDP Shareholders dispose of their Existing ZDP Shares otherwise than through
the London Stock Exchange, they must make their own arrangements with the other
parties concerned as regards entitlement under the Scheme.
4.9Share certificates and payment of cash entitlements
Certificates will not be issued in respect of Reclassified Shares. Existing
certificates in respect of Existing ZDP Shares will cease to be of value for
any purpose, and any existing credit of Existing ZDP Shares in any stock
account in CREST will be cancelled, following the despatch to ZDP Shareholders
of share certificates in respect of the New ZDP Shares issued under the Scheme
(or, in the case of ZDP Shareholders previously holding their Existing ZDP
Shares in uncertificated form, the appropriate stock accounts in CREST of such
ZDP Shareholders are credited with their respective entitlements to New ZDP
Shares) or, as the case may be, their cash entitlements.
If the Scheme becomes effective, cheques in respect of the Final Capital
Entitlements due to ZDP Shareholders holding their Existing ZDP Shares in
certificated form who have elected or are deemed to have elected for the Cash
Option are expected to be despatched by the Receiving Agent on 1 December 2020.
All ZDP Shareholders who hold their Existing ZDP Shares in CREST will receive
payment of their cash entitlement through the CREST system.
All documents and remittances despatched to or from ZDP Shareholders or their
appointed agents in connection with the Scheme and liquidation of PGIT
Securities 2020 will be despatched at Shareholders' own risk and no
acknowledgement will be issued for receipt of Forms of Election or TTE
Instructions.
4.10Overseas Shareholders
ZDP Shareholders who are Overseas Shareholders will not receive a Form of
Election and will (unless the Directors determine otherwise) receive their
Final Capital Entitlement in cash in respect of their entire holding of
Existing ZDP Shares unless they have satisfied the Directors that it is lawful
for New ZDP Shares to be issued to them under any relevant overseas laws and
regulations.
4.11Taxation
The attention of ZDP Shareholders is drawn to paragraph 2 of Part 5 of the
Circular which sets out a general guide to certain aspects of current UK
taxation law and HMRC published practice.
5.Costs of the Proposals
On the assumption that (i) the Gross Assets on 20 November 2020 are GBP55.8
million, which were the Gross Assets as at the Latest Practicable Date, (ii)
the number of Existing ZDP Shares in issue as at the Effective Date is
24,073,337, which is the number of Existing ZDP Shares in issue as at the date
of the Circular, and (iii) all ZDP Shareholders are eligible to, and do, elect
for the Rollover Option, then the costs of implementing the Proposals are
expected to be approximately GBP470,000 (equivalent to approximately 1.83 per
cent. of the Net Asset Value as at the Latest Practicable Date). These costs
will be borne by the Parent and so will effectively be borne by the Ordinary
Shareholders.
If the Proposals are not implemented, the costs of the Proposals will, in any
event, be borne by the Parent and so will effectively be borne by the Ordinary
Shareholders.
6.Conditions to the Proposals
The Scheme which provides for, and which will effect, the Rollover Option, is
conditional upon:
i. the passing of the Resolutions to be proposed at the First General Meeting
(or any adjournment thereof) and upon any conditions of such Resolutions
being satisfied and the passing of the Resolutions to be proposed at the
Second General Meeting (or any adjournment thereof);
ii. the FCA agreeing to admit to the standard segment of the Official List the
Reclassified Shares and the London Stock Exchange agreeing to admit the
Reclassified Shares to trading on its main market, and, subject only to
allotment thereof, the New ZDP Shares to be issued pursuant to the Issue
also being agreed to be so admitted; and
iii. the Minimum Issue Size being achieved.
7.Certain considerations relating to the Proposals
The implementation of, and an Election for one or more Options under, the
Proposals carry with them certain considerations for ZDP Shareholders as
described below:
* ZDP Shareholders will need to consider the tax consequences of the
Proposals, based on their particular circumstances. As described in
paragraph 2 of Part 5 of the Circular, UK resident ZDP Shareholders who
elect for, or who are deemed to elect for the Cash Option (including as a
result of scaling back of elections under the Scheme), will generally be
treated as making a disposal of their Existing ZDP Shares and may incur a
tax liability as a result. Similarly, ZDP Shareholders who elect to roll
over some or all of their entitlement into New ZDP Shares may incur tax
liabilities on any subsequent disposal of their New ZDP Shares. ZDP
Shareholders who elect to roll over their investment into New ZDP Shares
should not generally be treated as making a disposal for the purposes of UK
taxation of chargeable gains as a result of doing so. Shareholders who are
in any doubt as to the tax consequences of the Proposals should seek
independent professional advice;
* elections for New ZDP Shares may be subject to scaling back under the
Scheme. This may result in ZDP Shareholders receiving part of their Final
Capital Entitlements under the Scheme in cash rather than in New ZDP
Shares;
* the default option under the Scheme is for a ZDP Shareholder to receive the
Final Capital Entitlement in cash. ZDP Shareholders making no Election
under the Scheme will therefore receive cash;
* the New ZDP Shares are designed to be held over the long-term and may not
be suitable as short-term investments. There can be no guarantee that any
appreciation in the value of the Group's investments will occur and
investors may not get back the full value of their investment. The past
performance of the Group is not a guide to the future performance of the
Group. On the assumption that (i) Gross Assets on 20 November 2020 are GBP
55.8 million, which were the Gross Assets as at the Latest Practicable
Date; and (ii) the Maximum Issue Size is achieved, then it is expected that
following completion of the Scheme, Gross Assets would need to fall by 33.3
per cent. in total, and 5.9 per cent. annually, in order for the New ZDP
Shares not to receive their full 2025 Final Capital Entitlement of
127.6111p per New ZDP Share on 28 November 2025;
* there can be no guarantee that the investment objective of the Parent will
be achieved. A failure to meet the investment objective may have a material
adverse effect on the ability of the Parent to meet its obligations under
the New Undertaking Agreement and thereby on the ability of PMGR Securities
2025 to pay the 2025 Final Capital Entitlement in full on the 2025 ZDP
Repayment Date; and
* the ability of PMGR Securities 2025 to pay such amounts is dependent on it
having sufficient cash resources to meet such obligation and therefore on
the Parent meeting its obligation under the New Undertaking Agreement to
contribute such funds to PMGR Securities 2025 so as to ensure PMGR
Securities 2025 has sufficient assets at the relevant time.
8.Action to be taken
Details of the action to be taken by ZDP Shareholders in relation to the
Proposals are set out in Part 2 of the Circular.
It is important that ZDP Shareholders read Part 2 carefully and, if they wish
to make a full or partial election for New ZDP Shares, where their Existing ZDP
Shares are held in certificated form, return their Forms of Election or, where
their Existing ZDP Shares are held in uncertificated form, submit their TTE
Instructions so as to be received no later than 1.00 p.m. on 20 November 2020.
Failure to return or submit a Form of Election or a TTE Instruction or the
return or submission of a Form of Election or a TTE Instruction which is not
validly completed will result in the relevant ZDP Shareholder being deemed to
have elected for the Cash Option.
1. No recommendation
Your Board considers that the Proposals set out in the Circular are in the best
interests of Shareholders as a whole and of ZDP Shareholders as a class.
However, the Directors make no recommendation to ZDP Shareholders as to whether
or not they should elect to receive New ZDP Shares or cash under the Scheme.
The benefits of the Options under the Scheme to ZDP Shareholders will depend on
their own personal, financial and tax circumstances and their investment
objectives. Accordingly, you are recommended to read carefully all the
information in the Circular and in the Prospectus before making any election.
The choice between the Options is a matter for each ZDP Shareholder to decide.
ZDP Shareholders in any doubt as to the action they should take should consult
an appropriately qualified independent adviser, authorised under the Financial
Services and Markets Act 2000, without delay.
Yours faithfully
Gillian Nott OBE
Chairman
Expected Timetable 2020
Latest time and date for receipt of the 1.00 p.m. on 20 November
Forms of Election or TTE Instructions
from ZDP Shareholders (i)
Record Date for entitlement to the Scheme 6.00 p.m. on 20 November
First General Meeting(ii) 10.00 a.m. on 23 November
Date from which it is advised that 23 November
dealings in Existing ZDP Shares should
only be for cash settlement and immediate
delivery of documents of title
Latest time and date for commitments 1.00 p.m. on 26 November
under the Placing
Existing ZDP Shares reclassified, 8.00 a.m. on 27 November
Official List amended and dealings in
Reclassified Shares commence on the
London Stock Exchange(iii)
Dealings in Reclassified Shares suspended 8.00 a.m. on 30 November
Second General Meeting 10.00 a.m. on 30 November
and, if the Scheme becomes unconditional,
Effective Date for the implementation of
the Proposals and commencement of
liquidation(ii)
Publication of the results of the Placing 30 November
and the Scheme
New ZDP Shares admitted to Official List, 8.00 a.m. on 1 December
Existing ZDP Shares cancelled and
dealings in New ZDP Shares commence on
the London Stock Exchange
CREST accounts credited with New ZDP as soon as practicable after
Shares (for holders in uncertificated 1 December
form)
Consideration expected to be despatched 1 December
to ZDP Shareholders who elect or are
deemed to have elected for the Cash
Option to CREST participants by the
crediting through CREST and to
certificated holders by cheque in the
week commencing
Despatch of New ZDP Share certificates 7 December
(to holders in certificated form) in the
week commencing
All 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 time in the Circular are to UK time.
i. ZDP Shareholders who wish to receive their Final Capital Entitlement in
respect of their entire holding of Existing ZDP Shares in cash do not need
to complete a Form of Election or send a TTE Instruction and will be deemed
to have elected for the Cash Option.
ii. Neither ZDP Shareholders nor Ordinary Shareholders are entitled to attend
or vote at either General Meeting.
iii. Reclassified Shares are a technical requirement of the Scheme and will be
created if Resolution 1 to be proposed at the First General Meeting is
passed and becomes effective. Existing ZDP Shares will be reclassified
according to the Elections made (or deemed to have been made) by ZDP
Shareholders.
END
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