Publication of Admission Document & Notice of EGM

RNS Number : 6526L

India Capital Growth Fund Limited

07 July 2014

7 July 2014

India Capital Growth Fund Limited (the "Company")

(a closed-ended investment company incorporated with limited liability under the Laws of Guernsey with registered number 43916)

Publication of Admission Document and Notice of EGM

Proposals for a Bonus Issue of Subscription Shares and Amendments to the Continuation Resolution Arrangements

On 13 June 2014, the Company announced that the Board was considering proposals for the Company's future including, inter alia, a bonus issue of Subscription Shares and amendments to the continuation vote provisions (together, the "Proposals"). The Company announces today that the Admission Document, which also constitutes a Circular to Shareholders, has been sent to Shareholders.

The Proposals set out in the Admission Document are subject to, amongst other things, the approval of Shareholders, and, accordingly, the Admission Document contains a notice convening an Extraordinary General Meeting of the Company which is to be held at the registered office of the Company at 1st Floor Tudor House, Le Bordage, St Peter Port, Guernsey, GY1 1DB at 9.30 a.m. on 6 August 2014 for Shareholders to consider and, if thought fit, approve the Proposals.

Bonus Issue of Subscription Shares

The Company is proposing to issue Subscription Shares by way of a bonus issue to Qualifying Shareholders of up to 37,500,731 of a new class of Subscription Shares free of payment on the basis of one Subscription Share for every two Ordinary Shares held on the Record Date. Each Subscription Share will confer the right (but not the obligation) to subscribe for one Ordinary Share upon exercise of the Subscription Share Rights and on payment of the Subscription Price as set out below. Fractions of Subscription Shares will not be allotted or issued and entitlements will be rounded down to the nearest whole number of Subscription Shares.

Whilst under the Articles, the Directors have authority to create new classes of shares in the Company, the general authority to issue new shares expired on 9 June 2014. Accordingly, the First 2014 Resolution to be proposed at the Extraordinary General Meeting grants the Directors authority to issue new shares to replace the authority previously set out in the Articles which expired on 9 June 2014 and specifically to issue the Subscription Shares and the new Ordinary Shares arising on exercise of the Subscription Shares. This authority is to issue (a) the new Subscription Shares and the new Ordinary Shares arising from the exercise of Subscription Share Rights; and (b) up to a maximum nominal value of £225,000 new Ordinary Shares where such authority will expire at the Company's annual general meeting in 2017, when the Directors intend to propose an ordinary resolution to renew the authority. The First 2014 Resolution also authorises the Directors to make market purchases of up to 14.99 per cent. of the Subscription Shares in issue. The Directors would only use such authority if they considered such purchases to be in the best interests of the Company and Shareholders as a whole.

The issue of the Subscription Shares is conditional upon the passing of the First 2014 Resolution at the Extraordinary General Meeting and Admission taking place by no later than 8.00 a.m. on 12 August 2014 (or such later date on or before 1 September 2014 as the Company and the Investment Manager may determine).

The Subscription Price per Ordinary Share, will be equal to the published unaudited NAV per Ordinary Share as calculated by the Administrator as at 5.00 p.m. on 31 July 2014 (the "Calculation Date") rounded up to the nearest penny. The NAV for the purpose of calculating the Subscription Price 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 Proposals). As at 5.00 p.m. on 30 June 2014, being the latest practicable date before the publication of the document, the unaudited NAV per Share was 60.12 pence.

It is expected that an announcement of the Subscription Price will be made on 5 August 2014.

Setting the Subscription Price at the NAV per Ordinary Share as at the Calculation Date reflects the Board's confidence in the Company's 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 Share Rights will be exercisable on one date only, 6 August 2016 (the "Subscription Date"), after which the Subscription Share Rights shall lapse. Notice of the exercise of the Subscription Share Rights must be given by no later than 5.00 p.m. on the Subscription Date.

However, if at any time after 6 August 2015 the average middle market quotations (as derived from the London Stock Exchange Official Daily List) for an Ordinary Share for at least 10 consecutive dealing days is 5 per cent. or more above the Subscription Price, the Company has the right (but not the obligation) by announcement on a RIS to change the Subscription Date for exercise of the Subscription Share Rights to an earlier date being a date not less than 30 days after the Company's announcement that it is bringing forward the Subscription Date (the "Revised Subscription Date"). In that event, an announcement will be made on a RIS and notice of the Revised Subscription Date will be given to all holders of Subscription Shares on the register as at 5.00 pm on the date falling three business days following the announcement of the Revised Subscription Date.

In that event, notice of the exercise of the Subscription Share Rights must be given by holders of Subscription Shares by no later than 5.00 p.m. on the Revised Subscription Date after which the Share Subscription Rights shall lapse unless the Revised Subscription Date has been cancelled, in the circumstances set out below.

Not later than 20 days before the Subscription Date or the Revised Subscription Date (as the case may be), the Company shall give notice in writing to the holders of the Subscription Shares then in issue reminding them of their Subscription Share Rights and, in relation to any Uncertificated Subscription Shares, stating the form of Uncertificated Subscription Notice prescribed by the Directors.

An application will be made for the Subscription Shares to be admitted to trading on AIM. It is expected that Admission will occur, and that dealings will commence, in respect of the Subscription Shares on 12 August 2014. On their Admission, the Subscription Shares will confer rights to subscribe for new Ordinary Shares representing, in aggregate, due to rounding, a little under 33.3 per cent. of the then issued ordinary share capital of the Company.

Continuation Resolution

The Company's AIM admission document issued on 16 December 2005 in connection with the initial admission to trading of the Ordinary Shares stated that "the Company currently does not have a fixed life but the Board considers it desirable that Shareholders should have the opportunity to review the future of the Company after an initial period of 10 years and periodically thereafter. Accordingly, at the Annual General Meeting of the Company in 2015 (and every five years thereafter) an ordinary resolution will be proposed that the Company should continue as presently constituted" (hereafter, the "2015 Resolution")

In light of the intention to issue subscription shares with a potential two year duration, the Board will also propose at the Extraordinary General Meeting the Second 2014 Resolution to amend the Company's continuation vote provisions as set out below. If the Second 2014 Resolution is approved:

· the 2015 Resolution referred to in the Company's original AIM admission document 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 monthly average market capitalisation being less on average than £30 million over the one year period preceding the relevant Three Yearly Assessment taking the market capitalisation as at the last trading day of each month; or

ii. the Company's published diluted NAV per Ordinary Share (adjusted, if appropriate, for any dividends payable to Shareholders) underperforming the BSE Mid Cap Total Return Index by in excess of a cumulative 5 per cent. over the three year period preceding the relevant Three Yearly Assessment, save that if any new Ordinary Shares have been issued pursuant to the exercise of the Subscription Share Rights, the published NAV per Ordinary Share as at the date of the 2017 Three Yearly Assessment will be adjusted by adding back in pence per Ordinary Share terms the aggregate of (a) the dilutive effect of the new Ordinary Share issue and (b) the figure in (a) multiplied by the percentage change in the NAV per Ordinary Share between the issue date of the new Ordinary Shares and the date of the 2017 Three Yearly Assessment.

If the Second 2014 Resolution is not approved, the Company will revert to its undertaking in its original AIM admission document to propose the 2015 Resolution and will not issue the Subscription Shares. The Second 2014 Resolution is however not conditional on the approval of the First 2014 Resolution.

Discount/Premium

The Board intends that the return to Shareholders through the Company's share price should, where possible, match the returns that are achieved in the Company's NAV. Accordingly the Board will continue to monitor the performance of the NAV per Ordinary Share in relation to the Ordinary Share price closely and, in the event that there is a discount and it were to consistently exceed 20 per cent. over a three month period, will consider and discuss with major Shareholders whether any policy changes would be in the best interests of the Shareholders as a whole.

Should the Ordinary Shares trade at a premium to the Net Asset Value per Ordinary Share and the Directors determine that an issue would be in the best interests of the Company and Shareholders as a whole, the Company may issue new Ordinary Shares at a price that is not less than the prevailing Net Asset Value per Ordinary Share.

The Admission Document and the notice of the extraordinary general meeting are available for viewing on the Company's website at www.indiacapitalgrowth.com

Terms not defined in this announcement shall have the meaning given to them in the Admission Document.

Expected timetable of principal events:

Posting of Admission Document (incorporating the Circular and notice of EGM)	7 July 2014
Latest time and date for receipt of CREST Proxy Instructions and Forms of Proxy for the General Meeting	9.30 a.m. on 4 August 2014
Subscription Price of Subscription Shares calculated	As at 5.00 p.m. on 31 July 2014
Record Date for the Bonus Issue	5.00 p.m. on 4 August 2014
Extraordinary General Meeting	9.30 a.m. on 6 August 2014
Subscription Shares admitted to trading on AIM and dealings in the Subscription Shares commence	8.00 a.m. on 12 August 2014
Crediting of CREST stock accounts in respect of the Subscription Shares	As soon as possible after 8.00 a.m. on 12 August 2014
Share certificates despatched in respect of the Subscription Shares (where applicable)	Week commencing 18 August 2014