Proposals to Shareholders

RNS Number : 5355J

India Capital Growth Fund Limited

13 June 2014

 



13 June 2014

INDIA CAPITAL GROWTH FUND LIMITED (THE "COMPANY")

COMPANY UPDATE

The Company today announces that the Board is considering proposals for the Company's future including, inter alia, a bonus issue of subscription shares and amendments to the continuation vote provisions.

Bonus issue of subscription shares

The Board intends to propose at an extraordinary general meeting to be convened in July 2014 (the "EGM") an ordinary resolution ("the First 2014 Resolution") to authorise the Board to allot to existing ordinary shareholders a new class of subscription shares, free of payment, on the basis of one subscription share for every two ordinary shares held in the Company.

Each subscription share is intended to confer the right, but not the obligation, to subscribe for one ordinary share in the Company upon exercise of the subscription share rights and on payment of the subscription price which will be based on the prevailing unaudited net asset value of the Company around the date of the issue of subscription shares.

The subscription shares are intended to be exercisable on a single date two years after their issue save that, during the second year of their duration, the Company would have the right, but not the obligation, to bring forward the exercise date should the ordinary share price exceed the exercise price of the subscription shares by a minimum of 5% for a minimum period of ten trading days.

Application will be made for the subscription shares to be admitted to trading on AIM.

Amendments to the continuation vote provisions

The Company has currently undertaken to propose at its 2015 AGM (and every five years thereafter) an ordinary resolution ("the 2015 Resolution") that the Company should continue as presently constituted.

In light of the intention to issue subscription shares with potential two year duration, the Board also intends to propose at the EGM an ordinary resolution ("the Second 2014 Resolution") to amend the Company's continuation vote provisions. If the Second 2014 Resolution is approved:

·      the 2015 Resolution will not be proposed; and

·      the Company will undertake that in 2017 (and every three years thereafter) the Board will carry out an assessment of the Company's performance (the "Three Yearly Assessment") and will thereafter propose an ordinary continuation resolution only in the event that either of the following criteria are met:

i.     the Company's market capitalisation being less on average than £30 million over the one year period preceding the relevant Three Yearly Assessment; or

ii.     the Company's undiluted NAV per share underperforming the BSE Mid Cap Index by in excess of a cumulative 5% over the three year period preceding the relevant Three Yearly Assessment.

If the Second 2014 Resolution is not approved, the Company will revert to its undertaking to propose the 2015 Resolution and will not issue the subscription shares. The Second 2014 Resolution is not intended to be conditional on the approval of the First 2014 Resolution.

The Board intends that the return to shareholders through the Company's share price should, where possible, match the investment returns that are achieved in the Company's portfolio. Accordingly the Board will also continue to monitor the discount to NAV per share closely and, in the event that the discount consistently exceeded 20% over a three month period, will consider and discuss with major shareholders whether any policy changes would be in the best interests of shareholders as a whole.

A further announcement setting out the detailed terms of the Company's proposals will be released, and a circular, incorporating an AIM Admission document for the subscription shares, will be despatched to the Company's registered shareholders, as soon as practicable.

For enquiries please contact:

Ocean Dial Asset Management Limited (Investment Manager)

Robin Sellers

Amul Pandya

[phone]

Grant Thornton UK LLP (Nominated Adviser)

Philip Secrett

Jen Clarke

[phone]

Numis Securities Limited (Corporate Broker)

Nathan Brown

Hugh Jonathan

[phone]

APEX Fund Services (Guernsey) Limited (Administrator)

Stephen Cuddihee

[phone]

 

END

 

 

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