European Assets Trust NV
24 November 1999
The Issuer has advised that the headline for the European Assets Trust NV
announcement released today at 09:09 under RNS No 3256b should read Stmt.re
Draft Tax Laws and not Stmt. re Possible Restructuring.
The full text shown below remains unchanged.
The following is the text of a letter to be sent to shareholders of European
Assets Trust today -
Dear Shareholder
The Supervisory and Management Boards of your Company are very conscious of
the discount to asset value at which the ordinary shares of the Company trade
in the market. We believe that this discount is based largely on the Dutch
dividend withholding tax that shareholders would suffer in the event of the
reconstruction or liquidation of the Company or the repurchase of shares by
it. The Boards of European Assets Trust have considered at length a wide
range of schemes and proposals for the future of the Company over the last
year and a half aimed at increasing shareholder value. During the course of
this process, numerous discussions have been held with the Dutch tax
authorities and with the Ministry of Finance, which have confirmed that none
of these proposals would achieve their objective. European Assets Trust's
position therefore remains as the Boards had previously understood it to be,
namely that any attempt to distribute the Company's assets outside the
Netherlands could expose shareholders to significant tax penalties. The
Boards therefore concluded that a restructuring of European Assets Trust is
unlikely to be possible under the present Dutch tax regulations.
New draft legislation was announced in the Netherlands in September relating
to investment company taxation. The draft bill contains a number of features
of particular relevance to shareholders in European Assets Trust which are set
out below in general terms.
* After 2001, investment companies realising and distributing their
revaluation reserves will be treated as making a distribution of capital and
dividend withholding tax will not arise.
* During a transitional period up to and including 2005, companies will suffer
corporate taxation at the rate of 20% on 'excess distributions' defined as
annual distributions in excess of the greater of a 4% return or twice the
average distribution in the three years 1998, 1999 and 2000 under a
consistent dividend policy.
* After 2005, investment companies should be able to distribute their assets
freely.
The legislation is not expected to be formally enacted before July 2000.
However, it is intended that the proposals will have passed through the lower
house of the Dutch parliament by early in the New Year, at which point there
will be greater confidence as to the exact nature of the changes that will be
enacted.
The Board is reviewing with its advisers the effect of the proposed changes on
the Company's position, with the objective of taking advantage of any changes
which will enable us to increase shareholder value. A further announcement
will be made when the shape of the new legislation is more certain in the New
Year.
Yours faithfully
John Ward
Chairman'
Contact - Howard Myles, Warburg Dillon Read
tel 0171 568 2140
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