Publication of Prospectus

RNS Number : 2631P

Aberdeen Asian Income Fund Limited

22 October 2012

 



22 October 2012

ABERDEEN ASIAN INCOME FUND LIMITED

Publication of Prospectus and
Shareholder Circular re. C Share Issue

Introduction

Further to the Company's announcement on 17 October 2012 in relation to a proposed issue of C Shares, the Company has today published a prospectus with details of the issue. 

The Board is seeking to raise up to £50.0 million, by way of a non-pre-emptive placing and offer for subscription of up to 50,000,000 C Shares at an issue price of 100p per C Share.  Whilst neither the Placing nor the Public Offer has been underwritten, as at 18 October 2012, Cantor Fitzgerald had received written commitments from a range of institutional investors, private client investment managers and private client brokers to subscribe for approximately 42.1 million C Shares at 100p per C Share pursuant to the Placing and Public Offer, subject, inter alia, to the Placing and Offer Agreement becoming unconditional.

Background to, and Benefits of, the Issue

The Company has a long term record of outperformance, on a NAV total return basis (source: Datastream):

·           over the five years ended 18 October 2012, the Company outperformed the currency-adjusted MSCI AC Asia Pacific (ex-Japan) Index by 79.4 percentage points;

·           over the one, three and five year periods ended 18 October 2012:

-         the Company outperformed all other London-listed closed-ended investment companies in the Asia Pacific Income, Asia Pacific (ex-Japan) and Asia Pacific (inc-Japan) sub-sectors;

-         the Company outperformed all London-listed closed-ended investment companies in the Global Income & Growth sub-sector; and

-         the Company was ranked first, second and first against all London-listed closed-ended investment companies in the UK Income & Growth sub-sector.

In addition, in line with the Company's objective of growing its dividends over time, the Company has achieved solid dividend progression, with an annualised growth in dividends per Ordinary Share paid in respect of its last five financial years of 8.7 per cent.  All such dividends were fully covered by the earnings per Ordinary Share in the year in respect of which they were paid.

Furthermore, despite a period of considerable market volatility and notwithstanding frequent tap issues of new Ordinary Shares in response to investor demand, the Company's rating (being the price at which the Ordinary Shares trade relative to their NAV) has been resilient, with the Ordinary Shares trading at an average premium to their NAV of 3.7 per cent. over the 12 months ended 18 September  2012 (source: Datastream), being the date on which the Company announced that it was contemplating a C Share issue.  The Ordinary Shares have continued to trade at a significant premium (averaging 4.6 per cent.) to their NAV since that announcement (source: Datastream).

Against a backdrop of the Company's strong performance and rating and a positive outlook for the Asian Pacific region, and having tested the appetite for an issue of C Shares among existing and potential new investors, the Directors have concluded that there is sufficient demand to merit proceeding with such an issue.  In the Directors' opinion, the principal benefits of an issue of C Shares for existing and new investors are that:

·           investors will have the opportunity to invest in the Company at a substantially lower premium than acquiring Ordinary Shares through the market (the Issue Costs payable out of the assets attributable to the C Shares are expected to be equivalent to less than 2 per cent. of the Issue Price per C Share, compared to the premium at which the Ordinary Shares have traded over the last 12 months);

·           investors can invest in a larger size than the day-to-day secondary market liquidity in the Ordinary Shares may permit;

·           the C Shares will convert into Ordinary Shares on a NAV for NAV basis, so neither the existing Ordinary Shareholders nor the new investors will suffer any NAV dilution on Conversion;

·           the Company's market capitalisation will increase, which should help to make the Company more attractive to a wider and more diversified investor base and further enhance the secondary market liquidity in the Ordinary Shares; and

·           the Company's fixed running costs will be spread across a wider capital base, thereby reducing the percentage of those costs per Ordinary Share.

The Directors believe that there are additional benefits for existing Ordinary Shareholders, principally that:

·           the NAV of the existing Ordinary Shares will not be diluted by the expenses associated with raising the new capital or investing the net cash raised pursuant to the Issue, all of which will be paid out of the assets attributable to the C Shares;

·           existing Ordinary Shareholders will not be exposed to the effects of the Company holding the substantial amount of net cash raised pursuant to the Issue pending the investment of that cash; and

·           there will be no impact on the revenue attributable to the Ordinary Shares whilst the net proceeds of the Issue are being invested and, accordingly, there will be no negative impact on the dividends paid on the Ordinary Shares as a result of raising substantial additional capital through an issue of C Shares.

Conditions of the Issue

The Issue, which has not been underwritten, is conditional on (among other things):

·           not less than 30,000,000 C Shares being issued, at the Issue Price, under the Placing and Public Offer;

·           resolutions adopting the New Articles and authorising the issue of the C Shares on a non-pre-emptive basis being passed at an extraordinary general meeting of the Company which has been convened for Thursday, 15 November 2012;

·           the Placing and Offer Agreement becoming unconditional and not being terminated in accordance with its terms at any time prior to Admission; and

·           Admission occurring by 8.00 a.m. on Friday, 16 November 2012 (or such later date as the Company, the Investment Manager, Cantor Fitzgerald and the Sponsor may agree, being in any event not later than Friday, 30 November 2012).

Expected Timetable

Public Offer opens                                                                                       Monday, 22 October 2012

Record date for participation in Placing and Public
Offer by Shareholders on priority basis                                       6.00 p.m. on Monday, 22 October 2012

Latest time and date for receipt of applications
under the Public Offer                                                              11.00 a.m. on Friday, 9 November 2012

Latest time and date for receipt of commitments
under the Placing                                                                      5.00 p.m. on Friday, 9 November 2012

Result of Placing and Public Offer and basis of
allocation of C Shares pursuant to Placing and
Public Offer announced through RIS                                                            Monday, 12 November 2012

Extraordinary general meeting to adopt New
Articles and authorise Issue                                                  9.00 a.m. on Thursday, 15 November 2012

Admission of C Shares to premium segment of
Official List and to trading on London Stock
Exchange's Main Market                                                           8.00 a.m. on Friday, 16 November 2012

CREST stock accounts in respect of C Shares
issued in uncertificated form credited                                                            Friday, 16 November 2012

Share certificates in respect of C Shares
issued in certificated form despatched                           Week commencing Monday, 19 November 2012

Prospectus and Shareholder Circular

Copies of the prospectus dated 22 October 2012, which has been prepared in accordance with the Prospectus Rules in connection with the Issue and the applications for Admission, (the "Prospectus") and the circular to Shareholders, which includes the notice convening the Extraordinary General Meeting at which the resolutions required to enable the Issue to be implemented will be proposed, (the "Circular") will be posted to Shareholders later today.

Copies of the Prospectus and the Circular will also be available, for inspection only, at the National Storage Mechanism which is located at www.hemscott.com/nsm.do.  In addition, copies of the Prospectus may be collected, free of charge, during normal business hours up to Friday, 16 November 2012 from the Company's registered office at No. 1 Seaton Place, St Helier, Jersey JE4 8YJ, and from Aberdeen Asset Managers Limited, Bow Bells House, 1 Bread Street, London EC4M 9HH. 

Enquiries

William Hemmings / Gary Jones	Aberdeen Asset Managers Limited	[phone]
Sue Inglis / Chris Whittingslow	Cantor Fitzgerald Europe	[phone] / [phone]

General

Words and expressions defined in the Prospectus have the same meanings when used in this announcement.

This announcement does not constitute an offer to sell or the solicitation of an offer to buy any C Shares pursuant to the Placing or the Public Offer and any decision to apply for C Shares pursuant to the Placing or Public Offer should be made only on the basis of the information contained in the Prospectus.  The Prospectus does not constitute an offer of, or the solicitation of an offer to subscribe for or buy, any Shares to any person in any jurisdiction to whom it is unlawful to make such an offer or solicitation in such jurisdiction.  Save for the UK, no action has been taken or will be taken in any jurisdiction by the Company that would permit the offering of C Shares in any jurisdiction where action for that purpose is required.  Similarly, no action has been taken to permit the distribution of this announcement or the Prospectus in any jurisdiction outside the UK where such action is required to be taken.  Accordingly, the distribution of this Prospectus and the offering of C Shares in jurisdictions other than the UK may be restricted.  In particular, neither this announcement nor the Prospectus are for distribution, directly or indirectly, in or into the United States of America, Australia, Canada, Japan, New Zealand or the Republic of South Africa.

Cantor Fitzgerald Europe, which is authorised and regulated in the United Kingdom by the FSA, is acting solely for the Company and for no one else in connection with the Issue and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Cantor Fitzgerald Europe or for affording advice in relation to the Issue or any other matter referred to in this Prospectus.  Nothing in this paragraph shall serve to exclude or limit any responsibilities that Cantor Fitzgerald Europe may have under FSMA or the regulatory regime established under FSMA.

Nplus1 Brewin LLP, which is authorised and regulated in the United Kingdom by the FSA, is acting as sponsor solely for the Company and for no one else in connection with the Issue and will not be responsible to anyone other than the Company for providing the protections afforded to clients of Nplus1 Brewin LLP or for affording advice in relation to the Issue or any other matter referred to in this Prospectus.  Nothing in this paragraph shall serve to exclude or limit any responsibilities that Nplus1 Brewin LLP may have under FSMA or the regulatory regime established under FSMA.

 

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