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
£30.25 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:
- 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
- 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
- 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 £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.
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:
- 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
- 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
£30.25 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.
- 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:
- 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
- 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 £55.8 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:
- 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
- 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 £55.8 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
£470,000 (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:
- 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);
- 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
- 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 £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.
- 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 Forms of Election or TTE Instructions from ZDP Shareholders
(i) |
1.00 p.m. on 20
November |
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
dealings in Existing ZDP Shares should only be for cash settlement
and immediate delivery of documents of title |
23 November |
Latest time and date for commitments
under the Placing |
1.00 p.m. on 26
November |
Existing ZDP Shares reclassified,
Official List amended and dealings in Reclassified Shares commence
on the London Stock Exchange(iii) |
8.00 a.m. on 27
November |
Dealings in Reclassified Shares
suspended |
8.00 a.m. on 30
November |
Second General Meeting
and, if the Scheme becomes unconditional, Effective Date for the
implementation of the Proposals and commencement of
liquidation(ii) |
10.00 a.m. on 30
November |
Publication of the results of the
Placing and the Scheme |
30 November |
New ZDP Shares admitted to Official
List, Existing ZDP Shares cancelled and dealings in New ZDP Shares
commence on the London Stock Exchange |
8.00 a.m. on 1
December |
CREST accounts credited with New ZDP
Shares (for holders in uncertificated form) |
as soon as practicable
after
1 December |
Consideration expected to be
despatched 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 |
1 December |
Despatch of New ZDP Share
certificates (to holders in certificated form) in the week
commencing |
7 December |
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.
- 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.
- Neither ZDP Shareholders nor Ordinary Shareholders are entitled
to attend or vote at either General Meeting.
- 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.