Proposed placing

RNS Number : 9300L

AVI Japan Opportunity Trust PLC

18 January 2021

 

THIS ANNOUNCEMENT, INCLUDING THE APPENDIX HERETO (TOGETHER THE "ANNOUNCEMENT") AND THE INFORMATION CONTAINED IN IT IS NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, DIRECTLY OR INDIRECTLY, IN OR TO THE UNITED STATES , AUSTRALIA , CANADA , THE REPUBLIC OF SOUTH AFRICA , JAPAN OR ANY MEMBER STATE OF THE EEA (OTHER THAN THE UNITED KINGDOM ) OR ANY OTHER JURISDICTION IN WHICH THE PUBLICATION, DISTRIBUTION OR RELEASE OF THIS ANNOUNCEMENT WOULD BE UNLAWFUL.

THIS ANNOUNCEMENT DOES NOT CONSTITUTE OR FORM A PART OF ANY OFFER TO SELL OR ISSUE, OR A SOLICITATION OF ANY OFFER TO PURCHASE OR OTHERWISE ACQUIRE, ANY SECURITIES OTHER THAN THE SECURITIES TO WHICH IT RELATES OR ANY OFFER OR INVITATION TO SELL OR ISSUE, OR ANY SOLICITATION OF ANY OFFER TO PURCHASE, SUBSCRIBE FOR OR OTHERWISE ACQUIRE, SUCH SECURITIES BY ANY PERSON IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL.

18 January 2021

AVI Japan Opportunity Trust plc ("AJOT" or the "Company")

Proposed Placing

The Board of AJOT announces that the Investment Manager, Asset Value Investors Limited, continues to find attractive opportunities for the Company to deliver returns for Shareholders through the active management of a focussed portfolio of equity investments listed or quoted in Japan, which have been identified by the Investment Manager as undervalued and having a significant proportion of their market capitalisation held in cash, listed securities and/or realisable assets. As such, the Company is seeking to raise up to £35 million in new Ordinary Shares under its existing Placing Programme, pursuant to the prospectus published on 3 March 2020, to fund investments in line with its investment policy (the "Placing"). The issue price will be at a premium of 2 per cent. of the unaudited NAV per Ordinary Share at close of business on the day that the Placing closes, which is expected to be Friday 12 February 2021, and such premium is expected to be sufficient to cover the anticipated costs and expenses associated with the Placing (the "Placing Price").  As such, the issue of the new Ordinary Shares under the Placing will not be dilutive to the prevailing NAV per Ordinary Share immediately prior to the Placing. Joe Bauernfreund, CEO and CIO of Asset Value Investors, commented: "We want to take advantage of valuations which in many cases remain depressed despite encouraging signs of recovering earnings and heightened levels of corporate activity. In addition to investing in a number of new opportunities, the proceeds will be used to increase the size of the shareholdings in several companies where the manager is planning on submitting shareholder proposals at the AGM later this year. The increased stakes will improve the likelihood of a successful outcome." The proposed Placing will take place through the Company's broker, Nplus1 Singer Advisory LLP ("N+1 Singer"), acting as Placing Agent. The Placing will be conducted under the authorities for the Placing Programme granted by Shareholders at the Company's General Meeting on 26 March 2020. The number of new Ordinary Shares to be issued under the Placing will be determined by the Company and N+1 Singer and will be announced on the date of Admission of the new Ordinary Shares. The Directors will determine, in their sole discretion, the basis of allocation of new Ordinary Shares under the Placing. The proposed Placing shall commence immediately following this announcement and is expected to close at 12.00 p.m. (London time) on Friday 12 February 2021, but may be closed earlier or later at the discretion of the Company and N+1 Singer.  The final number of new Ordinary Shares will be agreed between the Company and N+1 Singer following close of the Placing and announced shortly thereafter. The Placing is being made pursuant to the terms and conditions set out in Part 6 of the Company's prospectus dated 3 March 2020 (the "Prospectus") and the Share Issuance Agreement dated 3 March 2020 (the "Share Issuance Agreement"). Investors are invited to apply for new Ordinary Shares pursuant to the Placing by contacting their usual contact at N+1 Singer. N+1 Singer may choose to accept applications, either in whole or in part, on the basis of allocations determined in agreement with the Company and may scale back any applications for this purpose on such basis as the Company and the N+1 Singer may determine. N+1 Singer may also, notwithstanding the above and subject to the prior consent of the Company: (i) allocate new Ordinary Shares after the time of any initial allocation to any person submitting an application after that time, and (ii) allocate new Ordinary Shares after the Placing has closed to any person submitting an application after that time.  The Company's Board, in consultation with the N+1 Singer, may also decide not to proceed with the Placing for any reason. In this case, an announcement will be made by the Company. Applications will be made to the UK Listing Authority and the London Stock Exchange for the new Ordinary Shares to be admitted to the premium listing segment of the Official List and to trading on London Stock Exchange's main market (the "Admission"). It is expected that Admission will become effective on 17 February 2021 and that dealings in the new Ordinary Shares will commence at that time. Expected Timetable   Each of the times and dates set out below and mentioned elsewhere in this document may be adjusted by the Company, in which event details of the new times and dates will be announced via a Regulatory Information Service. References to a time of day are to London time. Placing opens 18 January 2021 Latest time and date for commitments under the Placing 12.00 p.m. on 12 February 2021 Announcement of results of the Placing 15 February 2021 Trade date 15 February 2021 Admission 8.00 a.m. on 17 February 2021 Crediting of CREST stock accounts in respect of the new Ordinary Shares 17 February 2021         Any capitalised terms used but not otherwise defined in this announcement have the meaning set out in the Prospectus dated 3 March 2020. For further information, please contact: Asset Value Investors Joe Bauernfreund Tel: [phone] N+1 Singer James Maxwell / Justin McKeegan / James Fischer (Corporate Finance) Alan Geeves / James Waterlow / Sam Greatrex (Sales) Tel: [phone] Quill PR Fiona Harris / Sarah Gibbons-Cook Tel: [phone]         Appendix DETAILS OF THE PLACING N+1 Singer has entered into the Share Issuance Agreement with the Company and the Investment Manager under which N+1 Singer has, on the terms and subject to the conditions set out therein, undertaken to use its reasonable endeavours to procure, as agent for the Company, subscribers for the Ordinary Shares at the Placing Price. The Share Issuance Agreement contains customary warranties given by the Company and the Investment Manager to N+1 Singer as to matters relating to the Company and its business. The Company (after consultation with N+1 Singer and the Investment Manager) reserves the right to scale back the number of Ordinary Shares to be subscribed by any Placee in the event of applications in excess of the target amount under the Placing. The Company and N+1 Singer also reserve the right not to accept offers to subscribe for Ordinary Shares or to accept such offer in part rather than in whole.  Each Placee's obligations will be owed to the Company and to N+1 Singer. Following the confirmation referred to below in the paragraph entitled "Participation in, and principal terms of, the Placing", each Placee will also have an immediate, separate, irrevocable and binding obligation, owed to N+1 Singer, to pay to N+1 Singer (or as N+1 Singer may direct) in cleared funds an amount equal to the product of the Placing Price and the number of Ordinary Shares which such Placees has agreed to acquire. Each Placee agrees to indemnify on demand and hold each of N+1 Singer, the Company and the Investment Manager and their respective affiliates harmless from any all costs, claims, liabilities and expenses (including legal fees and expenses) arising out of or in connection with any breach of the acknowledgments, undertakings, representations, warranties and agreements set forth in these terms and conditions and any Contract Note or Placing Confirmation.  The Placing is also conditional upon the Company having complied in all material respects with its obligations under the Share Issuance Agreement and the obligations of N+1 Singer not having been terminated pursuant to the terms of the Share Issuance Agreement.  APPLICATION FOR ADMISSION TO TRADING Application will be made to the FCA and the London Stock Exchange for Admission. It is expected that settlement of any such Ordinary Shares and Admission will become effective on or around 8.00 a.m. on 17 February 2021 and that dealings in the Ordinary Shares will commence at that time. PAYMENT FOR SHARES Each Placee must pay the Placing Price for the Ordinary Shares issued to the Placee in the manner and by the time directed by N+1 Singer. If any Placee fails to pay as so directed and/or by the time directed, the relevant Placee's application for Ordinary Shares shall at N+1 Singer's discretion either be rejected or accepted in which case the paragraph below entitled "Registration and Settlement" shall apply to such application. NO PROSPECTUS The Ordinary Shares are being offered to Relevant Persons only and will not be offered in such a way as to require a prospectus in the United Kingdom or elsewhere.  No offering document or prospectus has been or will be submitted to be approved by the FCA in relation to the Placing and Placees' commitments will be made solely on the basis of the information contained in this announcement (including this Appendix) and certain business and financial information the Company is required to publish in accordance with the rules and practices of the FCA (collectively "Exchange Information"). Each Placee, by accepting a participation in the Placing, agrees that the content of this announcement, including this Appendix, is exclusively the responsibility of the Company and confirms that it has not relied on any other information (other than the Exchange Information), representation, warranty, or statement made by or on behalf of the Company or N+1 Singer or any other person and neither N+1 Singer nor the Company nor the Investment Manager nor any other person will be liable for any Placee's decision to participate in the Placing based on any other information, representation, warranty or statement which the Placees may have obtained or received. Each Placee acknowledges and agrees that it has relied on its own investigation of the business, financial or other position of the Company in accepting a participation in the Placing. Nothing in this paragraph shall exclude the liability of any person for fraudulent misrepresentation.  REGISTRATION AND SETTLEMENT Settlement of transactions in the Ordinary Shares (ISIN: GB00BYMTBG55) following Admission will take place within CREST provided that, subject to certain exceptions, N+1 Singer reserves the right to require settlement for, and delivery of, the Ordinary Shares (or a portion thereof) to Placees by such other means that it deems necessary if delivery or settlement is not possible or practicable within CREST within the timetable set out in this announcement or would not be consistent with the regulatory requirements in any Placee's jurisdiction. Each Placee allocated Ordinary Shares in the Placing will be sent a Contract Note or Placing Confirmation stating the number of Ordinary Shares allocated to it at the Placing Price, the aggregate amount owed by such Placee to N+1 Singer (as agent for the Company) and settlement instructions. Each Placee agrees that it will do all things necessary to ensure that delivery and payment is completed in accordance with either the CREST or certificated settlement instructions that it has in place with N+1 Singer. In the event of any failure by a Placee to pay as so directed and/or by the time required by N+1 Singer, as applicable, the relevant Placee shall be deemed hereby to have irrevocably and unconditionally appointed N+1 Singer, or any nominee of N+1 Singer as its agent to use its reasonable endeavours to sell (in one or more transactions) any or all of the Ordinary Shares in respect of which payment shall not have been made as directed, and to indemnify N+1 Singer and its respective affiliates on demand in respect of any liability for stamp duty and/or stamp duty reserve tax or any other liability whatsoever arising in respect of any such sale or sales. A sale of all or any of such Ordinary Shares shall not release the relevant Placee from the obligation to make such payment for the relevant Ordinary Shares to the extent that N+1 Singer or its nominee has failed to sell the Ordinary Shares at a consideration which, after deduction of the expenses of such sale and payment of stamp duty and/or stamp duty reserve tax as aforementioned, is equal to or exceeds the Placing Price. MISCELLANEOUS Solely for the purposes of the product governance requirements contained within: (a) the UK version of EU Directive 2014/65/EU on markets in financial instruments, as amended ("MiFID II"); (b) Articles 9 and 10 of the UK version of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II; and (c) local implementing measures (together, the "Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the Product Governance Requirements) may otherwise have with respect thereto, the Ordinary Shares have been subject to a product approval process, which has determined that the Ordinary Shares are: (i) compatible with an end target market of investors who meet the criteria of professional clients and eligible counterparties, each as defined in MiFID II; and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II (the "Target Market Assessment"). Notwithstanding the Target Market Assessment, Placees should note that: the price of the Ordinary Shares may decline and investors could lose all or part of their investment; the Ordinary Shares offer no guaranteed income and no capital protection; and an investment in the Ordinary Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Placing.  Furthermore, it is noted that, notwithstanding the Target Market Assessment, N+1 Singer will only procure investors who meet the criteria of professional clients and eligible counterparties.  For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of MiFID II; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the Ordinary Shares. Each distributor is responsible for undertaking its own target market assessment in respect of the Ordinary Shares and determining appropriate distribution channels. The content of this announcement has been prepared by, and is the sole responsibility of, AVI Japan Opportunity Trust plc. The information contained in this announcement is given at the date of its publication (unless otherwise marked) and is subject to updating, revision and amendment from time to time. Neither the content of the Company's website nor any website accessible by hyperlinks to the Company's website is incorporated in, or forms part of, this announcement. Certain statements in this announcement are forward-looking statements which are based on the Company's expectations, intentions and projections regarding its future performance, anticipated events or trends and other matters that are not historical facts. These forward-looking statements, which may use words such as "aim", "anticipate", "believe", "could", "intend", "estimate", "expect" and words of similar meaning, include all matters that are not historical facts. These forward-looking statements involve risks, assumptions and uncertainties that could cause the actual results of operations, financial condition, liquidity and dividend policy and the development of the industries in which the Company's businesses operate to differ materially from the impression created by the forward-looking statements. These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Given those risks and uncertainties, prospective investors are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date of such statements and, except as required by the FCA, the London Stock Exchange or applicable law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Nplus1 Singer Advisory LLP ("N+1 Singer"), which is authorised and regulated in the United Kingdom by the FCA, is acting exclusively for the Company and no-one else in connection with the Placing. N+1 Singer will not regard any other person as its client in relation to the Placing and will not be responsible to anyone other than the Company for providing the protections afforded to its clients, nor for providing advice in relation to the Placing, the contents of this announcement or any transaction, arrangement or other matter referred to herein. None of the Investment Manager or N+1 Singer, or any of their respective directors, officers, employees, advisers, affiliates or agents, accepts any responsibility or liability whatsoever for or makes any representation or warranty, express or implied, as to this announcement, including the truth, accuracy or completeness of the information in this announcement (or whether any information has been omitted from the announcement) or for any loss howsoever arising from any use of the announcement or its contents. The Investment Manager and N+1 Singer, and their respective directors, officers, employees, advisers, affiliates or agents, accordingly disclaim all and any liability whether arising in tort, contract or otherwise which they might otherwise have in respect of this announcement or its contents or otherwise arising in connection therewith.

 

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