8 March
2024
Downing Strategic Micro-Cap
Investment Trust plc
LEI Number:
213800QMYPUW4POFFX69
Publication of a circular for
a General Meeting
Proposed B Share Scheme
Downing Strategic Micro-Cap
Investment Trust plc (LSE: DSM) (the
"Company) is pleased to
announce details of its proposals which seek to return 100 per
cent. of Shareholders' capital in cash to Shareholders through a
compulsory procedure involving a bonus issue, on a pro rata basis, of B Shares to all
Shareholders followed by the redemption of such B Shares. The
Board believe that this mechanism treats all Shareholders fairly
and allows capital losses and any gains to be treated efficiently,
within this current tax year.
The introduction of the B
Share Scheme requires Shareholder approval,
at a general meeting of the Company to be held at the offices of
Dickson Minto, Dashwood House, 69 Old Broad Street, London EC2M 1QS
at 2.00 p.m. on 3
April 2024 (the "General
Meeting"). Subject to the
Resolutions being passed at the General Meeting, the B Share Scheme
will provide the Company with the ability to return cash to
Shareholders at such time or times as the Board may, at its
absolute discretion, determine. B Shares would be issued to
Shareholders (at no cost to Shareholders) pro rata to their holdings of Ordinary
Shares at the time of issue of the B Shares and, shortly
thereafter, redeemed and cancelled in accordance with their terms
for an amount not exceeding the amount treated as paid up on the
issue of the B Shares.
A circular containing further detail
of the proposed B Share Scheme and the notice convening the General
Meeting has today been published by the Company (the "Circular"). A copy of the Circular will
be submitted to the National Storage Mechanism and will shortly be
available for inspection at https://data.fca.org.uk/#/nsm/nationalstoragemechanism.
The Circular will also be available on the Company's website
(https://www.downingstrategic.co.uk/).
Proposed return of capital
Subject to the passing of the
Resolutions at the General Meeting, the Board intends to return, in
aggregate, a minimum of approximately £10 million to Shareholders
via an initial issue and redemption of B Shares. B Shares of £1.00
each will be paid up from the Company's reserves and issued to all
Shareholders by way of a bonus issue pro rata to their holdings of Ordinary
Shares, currently expected to be on the basis of one B Share for
every 5 Ordinary Shares held at the Record Date of 6.00 p.m. on 3
April 2024. The B Shares will be issued on 4 April 2024 and
immediately redeemed at £1.00 per B Share. The Redemption Date in
respect of this Return of Capital will be 4 April 2024. It is
expected that the proceeds from the redemption of the B Shares,
which is equivalent to approximately 21.5 pence per Ordinary Share
(based on the current issued ordinary share capital of the
Company), will be sent to Shareholders through CREST (in respect of
uncertificated Shareholders) or via cheque (in respect of
certificated Shareholders) by 9 April 2024.
The proposed initial Return of
Capital represents approximately 33 per cent. of the Company's Net
Asset Value as at 6 March 2024, being the
latest published unaudited Net Asset Value prior to the publication
of the Circular. The Board further believes that it will be able to
return approximately a further £5.2 million (representing 17 per
cent. of the Company's Net Asset Value as at 6 March 2024) by the
end of June 2024 making a total return by then of over 50 per cent.
of Shareholders' current capital. Realisations to date have
proceeded well and liquidity has been achieved, ahead of Board
expectations across the portfolio without detriment to the listed
valuations.
Quote from the Chairman, Hugh Aldous:
"The Board has been considering the best options for
Shareholders in this relatively sub-scale investment company and in
current markets. It has been conferring with Shareholders and
believes that a managed wind down of the Company together with the
proposals which seek to return 100 per cent. cash to Shareholders,
in a fair, equitable, efficient and orderly manner pursuant to the
B Share Scheme, is in the best interests of Shareholders as a
whole. It has been very pleased with the
support that Shareholders have shown to date for these proposals.
The Company continues to be on track to return over 50 per cent. of
Shareholders current capital by the end of June 2024 and notes that
realisations to date have proceeded well and liquidity has been
achieved, ahead of Board expectations across the portfolio without
detriment to the listed valuations."
Timetable
It is expected that the timetable
will be as follows:
|
|
2024
|
|
Publication of the
Circular
|
8
March
|
|
Latest time for receipt of Forms of
Proxy and electronic appointments of proxies in respect of the
General Meeting
|
2.00 p.m.
on 28 March
|
|
General
Meeting
|
2.00 p.m.
on 3 April
|
|
Record Date in respect of first
Return of Capital
|
6.00 p.m.
on 3 April
|
|
Issue and allotment of B Shares in
respect of the first Return of Capital
|
4
April
|
|
Redemption Date in respect of first
Return of Capital
|
4
April
|
|
Payment date: (i) cheques posted to
Shareholders; and (ii) CREST holders credited with funds, in each
case respect of the first Return of Capital
|
By 9
April
|
All redemption payments will be paid
gross of tax.
Defined terms used in this
announcement have the meanings given in the Circular unless the
context otherwise requires
For further information please
contact:
|
|
|
|
Chairman
Hugh Aldous
|
tel: 020 7416 7780
|
|
Dickson Minto Advisers LLP
Douglas Armstrong
|
tel: 020 7649 6823
|