Publication circular and notice of general meeting

RNS Number : 3482P

AVI Japan Opportunity Trust PLC

09 October 2019

 

THIS ANNOUNCEMENT IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, TO U.S. PERSONS, OR IN OR INTO, THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, THE REPUBLIC OF SOUTH AFRICA OR INTO ANY OTHER JURISDICTION WHERE TO DO SO MIGHT CONSTITUTE A VIOLATION OR BREACH OF ANY APPLICABLE LAW.

This announcement does not constitute an offer to sell, or the solicitation of an offer to subscribe for, or to buy shares in any jurisdiction. This announcement is an advertisement and not a prospectus.

AVI Japan Opportunity Trust PLC (the "Company")

Publication of circular and notice of general meeting

LEI: 894500IJ5QQD7FPT3J73

9 October 2019

In line with the Board's aim to grow the Company and to satisfy ongoing investor demand for the Company's Shares, the Board is pleased to announce that the Company will be undertaking a placing of new Ordinary Shares in November 2019 (the "Placing"). Related to this, the Company further announces that it has today published and sent to shareholders a circular (the "Circular") convening a general meeting (the "General Meeting") in relation to (i) a proposed Related Party transaction with the Company's largest shareholder, Finda Oy and (ii) the renewal of the Company's non pre-emptive Share issuance authority.

The General Meeting is to be held at 4.00 p.m. on 28 October 2019 at the offices of N+1 Singer, 1 Bartholomew Lane, London EC2N 2AX.

Unless otherwise defined, the terms used in this Announcement shall have the same meaning as set out in the Circular.

The Related Party Transaction

As Finda Oy holds more than ten per cent. of the Company's issued share capital, it is considered a Substantial Shareholder of the Company and is therefore a Related Party for the purposes of the Listing Rules. The Listing Rules provide that transactions between an issuer and a Related Party in any 12 month period must be aggregated. The Company is not permitted to issue any further Ordinary Shares to Finda Oy until 14 May 2020 without first obtaining approval for the issue from Independent Shareholders (being Shareholders other than Finda Oy and its Associates).

Finda Oy has indicated that it wishes to invest a further £13 million in the Company in exchange for the issue of further Ordinary Shares. The Directors would like to facilitate the continued investment of this substantial and supportive Shareholder and therefore the Board intends to undertake the Placing. Independent Shareholders are being asked to approve the issue of up to 14,365,000 Ordinary Shares to Finda Oy in relation to the Placing. Such approval would represent a Related Party transaction for the purposes of the Listing Rules (the "Related Party Transaction").

Resolution 1, which will be proposed as an ordinary resolution, seeks approval of the Related Party Transaction (being the grant of authority to the Company to issue up to 14,365,000 Ordinary Shares to Finda Oy pursuant to the Placing) in accordance with the Listing Rules.

The Placing

The Board intends to undertake the Placing immediately following the General Meeting. However, given current market volatility, the Board wishes to maintain a degree of flexibility over when the Placing occurs. The authority sought in relation to approval of the Related Party Transaction will expire on 29 November 2019.

The price at which new Ordinary Shares will be issued under the Placing will be determined by the Board at the relevant time. However, it is expected that such new Ordinary Shares will be issued at a sufficient premium to the NAV per Share at the time of issue as will (i) cover the costs and expenses of the Placing (expected to be listing fees, broker commissions and legal fees) and (ii) take account of any premium at which the Ordinary Shares may be trading in the market at the relevant time. This premium per new Ordinary Share is expected to be set at around 2 per cent. of the relevant NAV per Share and in any event will not exceed 5 per cent. of the relevant NAV per Share. The Placing Price will be announced on the Business Day prior to the close of the Placing and will be based on the NAV per Share as at the date two Business Days prior to the close of the Placing.

As the new Ordinary Shares are being issued at a premium to the NAV per Share sufficient to cover the associated issue costs, the issue of the new Ordinary Shares will not be dilutive to the prevailing NAV per Share immediately prior to the Placing.

The number of new Ordinary Shares to be issued under the Placing will be determined by the Company and the Placing Agent 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. New Ordinary Shares issued to Finda Oy will be issued on the same terms as new Ordinary Shares issued to any other investor under the Placing.

The proceeds of the Placing will be invested in accordance with the Company's investment objective and policy.

The issue of new Ordinary Shares under the Placing is conditional on, inter alia, the admission of the new Ordinary Shares to the Main Market of the London Stock Exchange. In addition, the Placing is not conditional upon the passing of Resolution 2 or Resolution 3.

The Company's allotment authority

At the time of the Company's launch, the Company was granted shareholder authority to issue up to 16 million Ordinary Shares (the "Allotment Authority"). The Company has issued 1,635,000 Ordinary Shares and has the ability to issue a further 14,365,000 Ordinary Shares under the Allotment Authority. The Directors expect for all or substantially all of the remaining Allotment Authority to be utilised pursuant to the Placing. Once the Allotment Authority has been utilised in full, the Directors will be unable to issue further new Ordinary Shares until fresh authority is granted by Shareholders at the 2020 AGM or other earlier general meeting. Therefore, in order to maintain maximum flexibility for the Directors to issue further Ordinary Shares prior to renewal of the allotment authority at the 2020 AGM, the Board is also seeking the renewal of its Shareholder authorities to issue Ordinary Shares on a non pre-emptive basis.

Resolutions 2 and 3 seek the grant of Shareholder authority to issue up to 20 per cent. of the Company's current issued Share capital on a non-pre-emptive basis. If such authority is granted by Shareholders, the Directors will only use the authority to issue Ordinary Shares on a non pre-emptive basis, (i) to meet demand from investors and (ii) when the Directors believe that it is in the best interests of the Company and Shareholders to do so.

Recommendation

The benefits and risks of the proposals are set out in full in the Circular.

The Board, which has been so advised by Dickson Minto W.S. as Sponsor, considers that the proposed Related Party Transaction is fair and reasonable as far as the Shareholders are concerned.  In providing its advice to the Board, Dickson Minto W.S. has taken into account the Board's commercial assessments.

The Board also considers that the passing of the Resolutions is in the best interests of the Company and its Shareholders as a whole. Accordingly, the Directors unanimously recommend that Shareholders vote in favour of the Resolutions at the General Meeting. The Directors intend to vote in favour of the Resolutions in respect of their own beneficial holdings of Ordinary Shares (amounting to an aggregate of 40,000 Ordinary Shares, representing approximately 0.04 per cent. of the issued share capital of the Company as at the date of this document).

The circular, including the notice of general meeting will shortly be available for inspection at www.morningstar.co.uk/uk/NSM.

The circular is also available in electronic form on the Company's website at www.ajot.co.uk.   

Joe Bauernfreund Asset Value Investors Investment Manager	020 7659 4800
Nezia Morgan Link Company Matters Limited Company Secretary	01392 477 500

The content of the Company's web-pages and the content of any website or pages which may be accessed through hyperlinks on the Company's web-pages, other than the content of the Update referred to above, is neither incorporated into nor forms part of the above announcement.

 

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