Statement re. RECOMMENDED PROPOSALS FOR VOLUNTA...
PREMIUM TRUST PLC
RECOMMENDED PROPOSALS FOR VOLUNTARY LIQUIDATION
1 DECEMBER 2006
Introduction
Further to the Company's announcement of 28 September 2006 the Board today
announces proposals under which the Company will be placed into members'
voluntary liquidation in accordance with the timetable set out in the Articles.
A circular containing full details of the proposals and convening an
extraordinary general meeting to be held on 29 December 2006 is being published
today and will be posted to members shortly.
Winding Up Requirement
The Directors are required under the Articles to convene the EGM and at the EGM
to propose a resolution pursuant to section 84 of the Insolvency Act 1986 to
wind up the Company.
The Articles provide that those members voting in favour of the resolution to
wind up the Company shall collectively have sufficient votes for the resolution
to be carried notwithstanding the number of shareholders who vote against the
resolution.
Holders of Capital Shares, Income Shares and ZDP Shares (in relation to certain
business) all have the right to attend and vote, in person or by proxy, at the
EGM.
Portfolio Realisation
The Directors have reviewed with the Manager the process by which the Company's
assets are to be realised. Certain major shareholders have also been consulted.
With a view to maximising shareholder value in the winding up while returning
capital as soon as practicable following the appointment of the liquidators on
29 December 2006, it is intended, having regard to the holiday period, that on
the Company's behalf the Manager will place orders, or a single order if
believed appropriate, for the Company's assets to be sold on the London Stock
Exchange on 18 December 2006. The Directors presently intend to acquire a
derivative instrument on 18 December 2006 through which the Company will
maintain exposure to movements in the FTSE 100 Index until as near as
practicable to the commencement of the Company's winding up.
Final Interim Dividend
Under the Articles, the Directors are required to pay a final interim dividend
to the holders of Income Shares. This dividend is to be based on the Directors'
best estimate of the revenue profits (including accumulated revenue reserves)
available for distribution.
As a result of this requirement, the Directors have determined to pay a final
interim dividend of 3.0p per Income Share. The amount of this dividend is
potentially subject to adjustment, in which case the Company will make an
announcement of the change to a Regulatory Information Service. The Income
Shares will be declared "ex" this dividend entitlement on 6 December 2006, the
record date for this dividend will be 8 December 2006, and this dividend will be
paid on 27 December 2006.
Bank Loan
It is expected that the Company's term loan facility with Lloyds TSB will be
repaid in full (together with interest accrued to that date) on 20 December
2006, applying part of the proceeds of the portfolio realisation described
above. It is anticipated that, at 20 December 2006, the principal amount drawn
and outstanding under the loan facility will be £7,000,000. It is not expected
that any breakage costs will be incurred.
Proposed Winding Up Process
Upon the passing of the first resolution to be proposed at the EGM, liquidators
will be appointed and the winding up will commence.
The liquidators will set aside sufficient assets in a liquidation fund to meet
the known and contingent liabilities of the Company, including the costs of the
winding up. In addition, a retention fund will be set aside by the liquidators,
such fund being of an amount considered by them to be sufficient to meet any
unknown liabilities of the Company.
On the winding up, members' entitlements will be determined by reference to the
Articles, which provide as follows:
(i) first, holders of Income Shares have the right to be paid an amount equal
to the amount standing to the credit of the Company's revenue reserves (as
reduced by the final interim dividend referred to above), including the
amount of the undistributed revenue profits for the current year of the
Company as at the date of the commencement of winding up;
(ii) second, holders of ZDP Shares have the right to receive a final capital
entitlement of 105.05p per ZDP Share;
(iii) third, after the payments of capital to holders of ZDP Shares
described in paragraph (ii) above, holders of Income Shares have the right
to receive a final capital entitlement of 47.7p per Income Share; and
(iv) fourth, holders of Capital Shares have the right to receive the surplus
assets of the Company available for distribution.
It is expected that the liquidators will make payments pursuant to the
entitlements described in paragraphs (i) to (iv) above in the week commencing 8
January 2007. It is expected that the value of the Company's assets, after
allowing for payment of the known liabilities of the Company, including the
costs of the winding up, and the retention fund to be set aside by the
liquidators, will permit the payment of the entitlements referred to in
paragraphs (i), (ii) and (iii) above in full by the liquidators. However given
the exposure of the Company's assets to stock market movements there can be no
absolute certainty that this will be the case.
The liquidators may make a further distribution to holders of Capital Shares, at
the conclusion of the winding up of the Company, depending on whether there are
surplus assets remaining. This distribution would include any unapplied part of
the retention fund set aside by the liquidators.
Expenses
The costs incurred in relation to the proposed liquidation, including financial
advice, other professional advice and the liquidators' charges, are estimated to
amount to approximately £178,000, inclusive of VAT.
Management and Secretarial Services Agreement
The Company and the Manager have agreed that the management and secretarial
services agreement between them will terminate with effect from the passing of
the resolution to wind up the Company. No compensation will be payable by the
Company other than accrued fees and other payments due under the agreement up to
and including the date of termination.
Enquiries
For further information, please contact:
Keith Swinley
Martin Currie Investment Management Ltd
Tel. 0131 229 5252
Nathan Brown
Winterflood Investment Trusts
Tel. 020 7621 5572
Notes
Capitalised terms shall bear the meanings given to them in the Company's
circular dated 1 December 2006 unless the context otherwise requires.
A copy of the above document will be submitted shortly to the UK Listing
Authority and will be available for inspection at the UK Listing Authority's
Document Viewing Facility, which is situated at:
Financial Services Authority
25 The North Colonnade
Canary Wharf
London E14 5HS