Proposed Bonus Issue of Subsc

RNS Number : 4975V

Schroder UK Growth Fund PLC

10 July 2009

 



Schroder UK Growth Fund Limited

10 July 2009

Introduction

Further to the Company's announcement on 18 May 2009 that the Board was considering proposals for a bonus issue of Subscription Shares to Qualifying Shareholders, the Board has published its proposals in relation to the Bonus Issue. Shareholders will be asked to approve the Resolution which is required to implement the Proposals at the General Meeting to be held on 6 August 2009.

The Proposals

The Company is proposing to issue Subscription Shares, subject to the passing of the Resolution and Admission. If the Resolution is passed, Qualifying Shareholders will each receive, without payment, one Subscription Share for every five Ordinary Shares held by them on the Record Date, being 5.00 p.m. on 5 August 2009. Fractions of Subscription Shares will not be allotted or issued and entitlements will be rounded down to the nearest whole number of Subscription Shares.

Each Subscription Share will confer the right, but not the obligation, to subscribe for one Ordinary Share on each of 31 January and 31 July between (and including) 31 January 2010 and 31 July 2012 (or if such date is not a Business Day, on the next following Business Day), each a Subscription Date.

Such Subscription Share Rights will be exercisable on payment of the Subscription Price, which will be the Net Asset Value per Ordinary Share on the Calculation Date, plus a percentage premium to such amount, rounded up to the nearest whole penny, as follows:

-	if exercised on either 31 January 2010 or 31 July 2010, a premium of 10 per cent.;
-	if exercised on either 31 January 2011 or 31 July 2011, a premium of 15 per cent.; and
-	if exercised on either 31 January 2012 or 31 July 2012, a premium of 25 per cent.

The NAV for the purpose of calculating the Subscription Prices will be the unaudited value of the Company's assets calculated in accordance with the Company's accounting policies (including revenue items for the current financial year) less all prior charges and other creditors at their fair value (including the costs of the Bonus Issue). Prior charges include all loans and overdrafts that are to be used for investment purposes.

It is expected that an announcement setting out the Subscription Price will be made on 6 August 2009.

The percentage premia applying upon exercise and the resulting Subscription Price reflect the Board's confidence in the Company's medium-term prospects and its hope that holders of Subscription Shares will be able to exercise their Subscription Share Rights and acquire Ordinary Shares on favourable terms in the future.

Subscription Shares will rank equally with each other and will not carry the right to receive any dividends from the Company. The Ordinary Shares resulting from the exercise of the Subscription Rights will rank pari passu with the Ordinary Shares then in issue (save for any dividends or other distributions declared, made or paid on the Ordinary shares by reference to a record date prior to the allotment of the relevant Ordinary Shares). 

The Directors believe that the Bonus Issue will have the following benefits: 

-	Investors will receive securities which they may convert into Ordinary Shares at a predetermined price in order to benefit from any future growth in the Company;
-	Qualifying Shareholders will receive securities with a monetary value which may be traded in a familiar fashion to their existing Ordinary Shares or converted into Ordinary Shares;
-	on any exercise of the Subscription Share Rights, the capital base of the Company will increase allowing operating costs to be spread across a larger number of Ordinary Shares and hence the total expense ratio to fall;
-	following the exercise of any Subscription Rights, the Company will have an increased number of Ordinary Shares in issue, which may in due course improve the liquidity in the market for its Ordinary Shares; and
	Qualifying Shareholders will receive securities which are qualifying investments for the purposes of the stocks and shares components of a ISA and permitted investments for the purposes of a SIPP.

Authority to repurchase Subscription Shares

Shareholders are being requested to grant the Board authority to allow the Company to repurchase up to 14.99 per cent. of the issued Subscription Share capital in issue following completion of the Bonus Issue. Repurchases of Subscription Shares will be made at the discretion of the Board and will only be made when market conditions are considered by the Board to be appropriate and in accordance with the Listing Rules. Any Subscription Shares repurchased by the Company will be cancelled and will not be held in treasury for resale.

Adoption of new Articles of Association

The Company proposes to adopt the New Articles which will set out the rights pertaining to the Subscription Shares but otherwise will be identical to the Articles of the Company that were adopted at an extraordinary general meeting of the Company on 5 August 2008. 

Admission and dealings

Application will be made to the UK Listing Authority for the Subscription Shares to be admitted to the Official List and to the London Stock Exchange for such shares to be admitted to trading on its main market. It is expected that Admissions will occur and that dealings will commence on 7 August 2009.

Overseas Shareholders

The issue of the Subscription Shares to persons who have a registered or mailing address in countries outside of the EEA States may be affected by the law or regulatory requirements of the relevant jurisdiction. Accordingly, Overseas Shareholders will not be Qualifying Shareholders for the purposes of the Bonus Issue and any Subscription Shares due to the Overseas Shareholders will be allotted to a market maker who will sell such Subscription Shares promptly at the best price obtainable. The proceeds of sale will be paid to the Overseas Shareholders entitled to them save that entitlements of less than £5 per Overseas Shareholder will be retained by the Company for its own account.

General Meeting

The Bonus Issue is conditional on, amongst other things, the approval by Shareholders of the Resolution to be proposed at a General Meeting of the Company which has been convened for 6 August 2009.

Expected timetable

	2009
Latest time and date for receipt of Forms of Proxy	12.30 p.m. on 4 August
Subscription Prices of Subscription Shares calculated	Close of business on 5 August
Record Date for the Bonus Issue	Close of business on 5 August
General Meeting to approve the Bonus Issue	12.30 p.m. on 6 August
Announcement of the Subscription Prices	6 August
Admission of the Subscription Shares to the Official List and dealings in the Subscription Shares commence	8.00 a.m. on 7 August
Crediting of CREST stock accounts in respect of the Subscription Shares	7 August
Share certificates despatched in respect of the Subscription Shares	Week commencing 10 August

Terms used and not defined in this announcement bear the meaning given to them in the Prospectus dated 9 July 2009. 

A copy of the Prospectus has been submitted to the UK Listing Authority and will shortly be available for inspection at the UK Listing Authority's Document Viewing Facility, which is situated at:

The Financial Services Authority

25 The North Colonnade

Canary Wharf

London  E14 5HS

Enquiries:

John Spedding, Schroder Investment Management Limited - 020 7658 3206

Katie Standley, Winterflood Investment Trusts - 020 3100 0297

This announcement should not be construed as advice relating to legal, taxation or any other matters and does not constitute a recommendation to sell or the solicitation of an offer to subscribe for or buy, nor shall there be any sale of, any securities in any jurisdiction in which such offer, solicitation or sale would be unlawful or would impose any unfulfilled registration, publication or approval requirements on the Company or Winterflood Securities Limited. 

The contents of this announcement include statements that are, or may be deemed to be 'forward looking statements'. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms 'believe', 'expect', 'intend', 'will' or ' should'.  By their nature, forward looking statements involve risks and uncertainties and readers are cautioned that any such forward-looking statements are not guarantees of future performance. The Company's actual results and performance may differ materially from the impression created by the forward-looking statements. The Company undertakes no obligation to publicly update or revise forward-looking statements, except as may be required by applicable law and regulation (including the Listing Rules). No statement in this announcement is intended to be a profit forecast. Investors should consult a financial adviser authorised under the Financial Services and Markets Act 2000 without delay if they are in any doubt about the action they should take.

 

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