Bonus Issue of Subscription S

RNS Number : 9619M

JPMorgan Fleming Japanese Smllr Cos

06 February 2009

 



JPMorgan Fleming Japanese Smaller Companies Investment Trust plc

Bonus Issue of Subscription Shares

Introduction

Further to the announcement on 26 November 2008 by JPMorgan Fleming Japanese Smaller Companies Investment Trust plc (the 'Company') that the Board was considering making a bonus issue of Subscription Shares (the 'Bonus Issue') to existing Shareholders, the Board has today published a prospectus (the 'Prospectus') setting out details of the Bonus Issue and proposals in relation to the adoption of new Articles and a renewal of the Company's share repurchase authority (the 'Proposals').  

This announcement summarises the details and benefits of the Proposals and sets out the reasons for the Directors recommending that shareholders vote in favour of the Resolutions to be proposed at a General Meeting of the Company to be held on 2 March 2009.

All capitalised terms not defined in this Announcement shall have the meaning ascribed to them in the Prospectus.

The Proposals

The Proposals are as follows: 

The Bonus Issue

The Company is proposing to issue Subscription Shares to Qualifying Shareholders on the basis of one Subscription Share for every five Existing Ordinary Shares held on the Record Date. The Subscription Shares will be issued by way of bonus issue to Qualifying Shareholders.

Each Subscription Share will confer the right (but not the obligation) to subscribe for one Ordinary Share on any Business Day during the period from 1 April 2009 until 31 March 2014 (both dates inclusive), after which the rights under the Subscription Shares will lapse. Each Subscription Share will be capable of conversion into one Ordinary Share upon exercise of the Subscription Share Rights and on payment of the Conversion Price as set out below. 

Notice of the exercise of the Subscription Share Rights may be given at any time from 1 April 2009 until 31 March 2014 (both dates inclusive) and the Ordinary Shares arising on conversion will be issued within ten Business Days of the first Business Day of the calendar month following the month in which the relevant notices are received by the Registrars.

The Conversion Price will be equal to the unaudited NAV per Ordinary Share as at 5.00 p.m. on 27 February 2009, plus a percentage premium to such amount, rounded up to the nearest whole penny as follows:

a) if exercised on any day between and including 1 April 2009 and 31 March 2010 - a 1 per cent. premium to such NAV per Ordinary Share;

b) if exercised on any day between and including 1 April 2010 and 31 March 2012 - a 10 per cent. premium to such NAV per Ordinary Share; and

c) if exercised on any day between and including 1 April 2012 and 31 March 2014 - a 30 per cent. premium to such NAV per Ordinary Share.

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

The Directors believe the Bonus Issue of Subscription Shares will have the following advantages:

• Qualifying Shareholders 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 which may be traded in a similar fashion to their existing Ordinary Shares;

• Qualifying Shareholders will receive securities which are qualifying investments for the purposes of a stocks and shares ISA and permitted investments for the purposes of a SIPP;

• The total expense ratio per Ordinary Share may fall on the exercise of the Subscription Share Rights as the capital base of the Company will increase and the Company's fixed costs are spread across a larger number of Ordinary Shares; and

• Liquidity in the market for the Company's Ordinary Shares may improve on exercise of the Subscription Share Rights as the number of Ordinary Shares in issue will increase.

Authority to repurchase shares

Shareholder resolutions were passed at the AGM on 24 July 2008 granting the Company authority to make market purchases of Ordinary Shares representing (subject to certain conditions) up to 14.99 per cent. of the Company's then issued ordinary share capital. The Company's authority to repurchase Ordinary Shares is due to expire on 23 January 2010 unless previously renewed. This authority does not take into account the potential allotment of Ordinary Shares arising on the exercise of Subscription Share Rights. Therefore, and provided the Bonus Issue is approved by Shareholders, the Company is proposing to renew this authority to buy back up to 14.99 per cent. of the Ordinary Share capital which will be in issue following implementation of the Bonus Issue and the exercise of any of the Subscription Share Rights prior to the date of any such purchase.

In order to allow the Company to repurchase Subscription Shares, the Company is also seeking authority at the General Meeting to buy back up to 14.99 per cent. of the issued Subscription Share capital. Repurchases of Ordinary Shares and 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. Purchases through the market will not exceed the higher of (i) 5 per cent. above the average of the middle market quotations (as derived from the Official List) for the 5 consecutive dealing days ending on the dealing day immediately preceding the date on which the purchase is made and (ii) the higher of the price quoted for (a) the last independent trade of, or (b) the highest current independent bid for, any number of Ordinary Shares or Subscription Shares, as applicable, on the trading venue where the purchase is carried out. In addition, repurchases of Ordinary Shares will only be made in the market at prices below the prevailing NAV per Ordinary Share.

It is anticipated that authorisation for repurchases of both Ordinary Shares and Subscription Shares will be sought at the Annual General Meetings in 2009 and beyond.

Ordinary Shares repurchased might not be cancelled but rather held as treasury shares and may be subsequently re-issued as set out below. Purchases of Ordinary Shares to be held in treasury will be made in accordance with the Listing Rules and the Companies (Acquisitions of Own Shares) (Treasury Shares) Regulations 2003 (as amended).

Any sale of Ordinary Shares out of treasury prior to the date of the Company's 2009 AGM shall be made in accordance with the authorities granted to the Directors pursuant to the resolutions numbered 9 and 10 as passed at the AGM on 24 July 2008. Accordingly, the Board will continue to ensure that the sale of Ordinary Shares from treasury at a discount will be limited so that in the year to the date of the Company's Annual General Meeting in 2009, the aggregate dilution in Net Asset Value per Ordinary Share arising on such sales does not exceed 1.00 pence per share, being approximately 0.5 per cent. of the Net Asset Value of an Ordinary Share as at 31 March 2008.

Any Subscription Shares repurchased by the Company shall be cancelled and shall not be held in treasury for re-issue or resale.

New Articles of Association

As part of the Proposals, the New Articles will be adopted to replace the Existing Articles. The New Articles will set out the rights attaching to the Subscription Shares, but otherwise will be identical to the Existing Articles which were adopted at the Company's Annual General Meeting held on 24 July 2008 and which incorporated amendments to reflect the provisions of the 2006 Act and otherwise generally updated the Company's articles for current law, regulation and market practice.

As the 2006 Act will not be fully in force until October 2009, it is not yet possible to fully reflect all the changes being introduced by the 2006 Act and it is expected that Shareholders will be asked to approve further changes to the New Articles at the 2010 AGM.

The New Articles will be on display at the registered office of the Company until the end of the General Meeting.

Admission and dealings

The Subscription Shares will be in registered form and may be issued either in certificated or uncertificated form. No temporary documents of title will be issued. Pending despatch of definitive certificates, transfers of Subscription Shares in certificated form will be certified against the Register. All documents or remittances sent by or to Shareholders will be sent through the post at the risk of the Shareholder.

Applications 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 Admission will occur, and that dealings will commence, in respect of the Subscription Shares on 5 March 2009. On their Admission, the Subscription Shares will confer rights to subscribe for new Ordinary Shares representing, in aggregate, up to 20 per cent. of the then issued ordinary share capital of the Company.

Overseas Shareholders

The issue of the Subscription Shares to persons who have a registered or mailing address in countries outside of the EEA may be affected by the law or regulatory requirements of the relevant jurisdiction.

The Board will allot any Subscription Shares due under the Bonus Issue to Overseas Shareholders 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. Any Shareholder who is in any doubt as to his position should consult an appropriate independent professional adviser without delay.

Taxation

Shareholders should note that Subscription Shares are qualifying investments for the stocks and shares component of an ISA, but that exercise of Subscription Share Rights may affect the annual subscription limit available for further investment into an ISA in the relevant year.  Shareholders who are in any doubt about their tax position or who may be subject to tax in a jurisdiction other than the United Kingdom should consult their professional adviser.

General Meeting

The Proposals are conditional on, amongst other things, the approval by Shareholders of the Resolutions to be proposed at a General Meeting of the Company which has been convened for 2 March 2009.

Timetable

Conversion Prices of Subscription Shares calculated	Close of business on 27 February
General Meeting to approve the Bonus Issue	2 March
Announcement of the Conversion Prices	3 March
Record Date for the Bonus Issue	3 March
Admission of the Subscription Shares to the Official List and dealings in the Subscription Shares commence	5 March
Crediting of CREST stock accounts in respect of the Subscription Shares	5 March
Share certificates despatched in respect of Subscription Shares	the week commencing 9 March

        
Note:

The times and dates set out in the Expected Timetable of Principal Events above and mentioned throughout this announcement may be adjusted by the Company, in which event details of the new times and dates will be notified, as required, to the UK Listing Authority and the London Stock Exchange, and, where appropriate, to Shareholders.

Enquiries

For further information, please contact:

David Yovichic              020 7523 8361

Collins Stewart Europe Limited

Craig Cleland                  020 7742 3418

Richard Plaskett             020 7742 3422

J.P. Morgan Asset Management (UK) Limited

6 February 2009

 

END

 

 

MSCILFLRFTIRIIA