Publication of Circular

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED IN IT IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL.

THIS ANNOUNCEMENT IS AN ADVERTISEMENT AND NOT A PROSPECTUS.  THIS ANNOUNCEMENT DOES NOT CONSTITUTE OR FORM PART OF, AND SHOULD NOT BE CONSTRUED AS, ANY OFFER FOR SALE OR SUBSCRIPTION OF, OR SOLICITATION OF ANY OFFER TO BUY OR SUBSCRIBE FOR, ANY SHARES IN STRATEGIC EQUITY CAPITAL PLC OR SECURITIES IN ANY OTHER ENTITY, IN ANY JURISDICTION, INCLUDING THE UNITED STATES, NOR SHALL IT, OR ANY PART OF IT, OR THE FACT OF ITS DISTRIBUTION, FORM THE BASIS OF, OR BE RELIED ON IN CONNECTION WITH, ANY CONTRACT OR INVESTMENT DECISION WHATSOEVER, IN ANY JURISDICTION.  THIS ANNOUNCEMENT DOES NOT CONSTITUTE A RECOMMENDATION REGARDING ANY SECURITIES.

ANY INVESTMENT DECISION MUST BE MADE EXCLUSIVELY ON THE BASIS OF THE FINAL PROSPECTUS TO BE PUBLISHED BY THE COMPANY AND ANY SUPPLEMENT THERETO IN CONNECTION WITH ADMISSION.

Strategic Equity Capital plc

Publication of a Circular

7 July 2015

Further to the statement made by Strategic Equity Capital plc (the “Company”) on 5 June 2015, the Board of Directors is pleased to announce that it intends to proceed with a share issuance programme for up to 20 million new ordinary shares (“Shares”) in the capital of the Company (the “Share Issuance Programme”).

To date this year, the Company has issued (or sold from treasury) a total of 5,517,600 Shares raising gross proceeds of £11.9 million to pursue the Company’s investment objectives.  The Company is only able to issue a further 200,000 Shares under its existing shareholder authorities and the block listing that is in place.  As a result, the Company has today published a circular to shareholders (the “Circular”) convening a general meeting to consider and, if thought fit, approve the Resolutions to enable the Share Issuance Programme to be implemented.

Following discussions with the Investment Manager, the Board is satisfied that the Investment Manager’s approach will be able to absorb the additional capital that could be raised pursuant to the Share Issuance Programme.  In addition, it is envisaged that Shares would be issued over time under the Share Issuance Programme, subject to market conditions, particularly when the Investment Manager has identified suitable investment opportunities in order to minimise cash drag.  The Board recognises that the Investment Manager’s focused investment strategy in smaller companies has limited capacity.  Accordingly, the Board will continue to monitor the Investment Manager’s capacity for this strategy and will limit any future issuance to ensure that the Company’s investment strategy and performance are not compromised.

Benefits of the Share Issuance Programme

The Directors believe that the Share Issuance Programme offers the following principal benefits:

• raise additional monies in a timely manner to enable the Company to take advantage of opportunities to make further investments in accordance with the Company's investment policy;
• improve liquidity in the market for the Shares which should make the Shares more attractive to a wider range of investors;
• maintain the Company’s ability to issue new Shares tactically, so as to manage better the premium to Net Asset Value per Share at which the Shares may trade; and
• grow the Company, thereby spreading fixed costs over a larger capital base which should reduce the level of ongoing charges per Share.

The Share Issuance Programme is flexible and may have a number of closing dates in order to provide the Company with the ability to issue Shares over a period of time. The maximum number of Shares to be issued pursuant to the Share Issuance Programme is 20 million. Such Shares will, subject to the Company’s decision to proceed with an issue at any given time, be issued at the Issue Price as further described below. No Shares will be issued at a discount to the Net Asset Value per Share at the time of the relevant issue.

Applications will be made to the UKLA and the London Stock Exchange for  new Shares to be issued pursuant to the Share Issuance Programme to be admitted to the premium segment of the Official List and to trading on the London Stock Exchange’s main market for listed securities (each, an "Admission"). All Shares issued pursuant to the Share Issuance Programme will be allotted conditionally on such Admission occurring.

The Shares issued pursuant to the Share Issuance Programme will rank pari passu with the Shares then in issue (save for any dividends or other distributions declared, made or paid on the Shares by reference to a record date prior to the allotment of the relevant new Shares).

The Issue Price

Subject to the requirements of the Listing Rules, the minimum Issue Price in respect of an allotment of new Shares will not be less than the aggregate of the estimated prevailing Net Asset Value per Share and a premium to cover the commissions and expenses of the issue of new Shares under the Share Issuance Programme. Fractions of Shares will not be issued.

Where new Shares are issued, the total assets of the Company will increase by that number of Shares multiplied by the relevant Issue Price less brokers’ commission and expenses. It is not expected that there will be any material impact on the earnings and Net Asset Value per Share.

Use of proceeds

The net proceeds of the Share Issuance Programme, after providing for the Company’s operational expenses, will be used to purchase investments sourced by the Investment Manager in line with the Company’s investment policy to pursue the Company’s investment objective.

Issued share capital

As at 6 July 2015, the Company’s issued share capital comprised 62,583,891 Shares.  No Shares were held in treasury.

If 20 million Shares (being the maximum number of Shares available under the Share Issuance Programme) are issued pursuant to the Share Issuance Programme, there would be a dilution of approximately 24.2 per cent. in existing Shareholders’ voting control of the Company.  Whilst taking authority to disapply pre-emption rights over 32 per cent. of the Company’s issued share capital exceeds the authority ordinarily recommended by corporate governance best practice, the Directors believe that taking a larger than normal authority is justified in the present circumstances:  there will be no dilution in the NAV per Share as a result of implementation of the Proposals and, whilst Shareholders’ voting rights could be diluted by up to the percentage referred to above, the Directors believe that this consideration is outweighed by the flexibility that a larger authority provides.  It also means that the Company should save the costs of having to convene more frequent general meetings in order to obtain further Shareholder authority to implement the Share Issuance Programme in full.

General Meeting

The Share Issuance Programme is conditional on the approval by Shareholders of the Resolutions to be proposed at the General Meeting of the Company which has been convened for 11.00 a.m. on 31 July 2015.

The Resolutions that will be put to Shareholders at the General Meeting are to:

1.            authorise the allotment of up to 20 million Shares (representing 32 per cent. of the Company's issued Share capital (excluding Shares held in treasury, if any) as at the latest practicable date prior to the publication of the Circular); and

2.            disapply statutory pre-emption rights otherwise applicable to the allotment of up to 20 million Shares for cash such that new Shares do not first have to be offered to Shareholders in proportion to their holdings of Shares,

(the "Resolutions").

Both Resolutions need to be passed in order for the Share Issuance Programme to proceed.

The authority conferred by the Resolutions, if passed, will lapse on 31 August 2016.

Resolution 1 will be proposed as an ordinary resolution and resolution 2 will be proposed as a special resolution. An ordinary resolution requires a simple majority of members entitled to vote and present in person or by proxy to vote in favour in order for it to be passed. A special resolution requires a majority of at least 75 per cent. of members entitled to vote and present in person or by proxy to vote in favour in order for it to be passed.

All Shareholders are entitled to attend and vote at the General Meeting. In accordance with the Articles, all Shareholders entitled to vote and present in person or by proxy at the General Meeting shall upon a show of hands have one vote and upon a poll shall have one vote in respect of each Share held. In order to ensure that a quorum is present at the General Meeting, it is necessary for two or more Shareholders to be present in person or by proxy (or, if a corporation, by representative).

The formal notice convening the General Meeting is set out in the Circular.

Recommendation

The Board considers that the Share Issuance Programme is in the best interests of the Company and its Shareholders as a whole. Accordingly the Board unanimously recommends that Shareholders vote in favour of the Resolutions to be proposed at the General Meeting.

The Directors intend to vote in favour of the Resolutions in respect of their holdings of Shares amounting to 2,769,102 Shares in aggregate (representing approximately 4.4 per cent. of the issued share capital of the Company as at 6 July 2015 (being the latest practicable date prior to the publication of the Circular)).

The fund managers, Stuart Widdowson and Jeff Harris (and their immediate family members) who together hold 642,263 Shares representing 1.0 per cent. of the issued share capital of the Company as at 6 July 2015, and the parent of the Investment Manager, RIT Capital Partners plc, which holds 9,818,227 Shares representing 15.7 per cent. of the issued share capital of the Company, also intend to vote in favour of the Resolutions in respect of their holdings of Shares.

Prospectus

If the Resolutions are passed, the Company intends to publish a prospectus in early August in relation to the Share Issuance Programme, following which the Share Issuance Programme will open.

Expected timetable

Latest time and date for receipt of Forms of Proxy	11.00 a.m. 29 July 2015
General Meeting to approve the Resolutions	11.00 a.m. 31 July 2015
Publication of the prospectus in connection with the Share Issuance Programme	Early August 2015

Circular

The Circular will be posted to shareholders shortly.  A copy of the Circular has also been submitted to the National Storage Mechanism and will be available for inspection at www.morningstar.co.uk/uk/NSM shortly as well as on the Company's website at http://www.strategicequitycapital.com/.

Capitalised terms shall have the meanings attributed to them in the Circular unless otherwise stated.

Enquiries:

GVQ Investment Management Limited                      020 3691 6100

Stuart Widdowson

Theresa Russell

Canaccord Genuity Limited                                         020 7523 8000

Andrew Zychowski

Lucy Lewis

Capital Sinclair Henderson Limited (Secretary)          01392 412 122

Important notices

Canaccord Genuity Limited, which is authorised and regulated in the UK by the Financial Conduct Authority, is acting exclusively for the Company and for no-one else in connection with the contents of this announcement and will not be responsible to anyone other than the Company for providing the protections afforded to the respective clients of Canaccord Genuity Limited, or for affording advice in relation to the contents of this announcement or any matters referred to herein. 

No person has been authorised to give any information or to make any representations other than those contained in this announcement and, if given or made, such information or representations must not be relied on as having been authorised by any member of the Company's group or Canaccord Genuity Limited or any of their respective directors, officers, employees or agents.  Subject to the Listing Rules and/or the Prospectus Rules and/or the Disclosure and Transparency Rules and/or the Takeover Code and/or FSMA, neither the delivery of this announcement nor any subscription or acquisition made under it shall, in any circumstances, create any implication that there has been no change in the affairs of the Company since the date of this announcement or that the information in it is correct as of any subsequent date.

This announcement is for information only and does not constitute or form part of any offer or invitation to issue, acquire or dispose of any securities or investment advice in any jurisdiction.