Publication of Prospectus and Placing

RNS Number : 2510G

Honeycomb Investment Trust PLC

25 May 2017

 

NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, ANY MEMBER STATE OF THE EUROPEAN ECONOMIC AREA (OTHER THAN THE UNITED KINGDOM), CANADA, AUSTRALIA, THE REPUBLIC OF SOUTH AFRICA OR JAPAN OR ANY OTHER JURISDICTION IN WHICH THE PUBLICATION, DISTRIBUTION OR RELEASE OF THIS ANNOUNCEMENT WOULD BE UNLAWFUL.

This announcement is an advertisement only and does not constitute a prospectus.  Investors who wish to subscribe for or purchase shares in the Company are reminded that any such subscription or purchase should only be made on the basis of the information contained in the prospectus dated 25 May 2017 (and any supplement thereto) and not on the information contained in this announcement. This is a financial promotion and is not intended to be investment advice.

25 May 2017

Honeycomb Investment Trust plc

(the "Company")

Publication of Prospectus and Proposed Initial Placing

The board of directors of the Company is pleased to announce the publication of a prospectus (the "Prospectus") in relation to a share issuance programme of up to 40 million new Ordinary Shares and/or C Shares (the "Placing Programme"), including a first placing of Ordinary Shares (the "First Placing").

Under the First Placing, the Company is proposing to issue up to 10,000,000 new Ordinary Shares at an issue price of £10.50 per Ordinary Share (the "Initial Issue Price"). The Initial Issue Price represents a 5.8% discount to the last closing price of £11.15 per share on 24 May 2017 and a premium to the Net Asset Value per share of the Company.  New Ordinary Shares issued under the First Placing will not rank for the dividend declared on 28 April 2017 in respect of the three month period to 31 March 2017.

The proceeds from the First Placing will be invested in accordance with the Company's investment policy. The Company has fully deployed the net proceeds of the IPO placing and the placings of Ordinary Shares undertaken in May and December 2016.

The timetable for the First Placing is expected to be as follows:

	2017
Latest time and date for receipt of commitments for the First Placing	10.00 a.m. on 31 May
Publication of results of the First Placing	31 May
First Admission and commencement of dealings in the Ordinary Shares issued under the First Placing	8.00 a.m. on 2 June
CREST Accounts credited in respect of uncertificated Ordinary Shares issued under the First Placing	8.00 a.m. on 2 June
Where applicable, share certificates despatched in respect of Ordinary Shares issued under the First Placing	week commencing 5 June

The Company also confirms the publication of the Prospectus, dated today, which has been approved by the UK Listing Authority.

The First Placing is being conducted in accordance with the terms and conditions as set out in the Prospectus.

The Prospectus will shortly be made available on the Company's website (www.honeycombplc.com) and on the National Storage Mechanism at http://www.morningstar.co.uk/uk/NSM.

Capitalised terms used but not defined in this announcement have the same meanings as set out in the Prospectus.

Commenting on today's announcement, Lindsey McMurray, Managing Partner of Pollen Street Capital Limited, said:

"Since its IPO in December 2015 the Company has performed strongly, quickly deploying the initial capital and the proceeds from two further raises, into high quality consumer and SME loan assets.

The Company has made a good start to 2017 and has identified a significant pipeline of new business opportunities. The Company is pursuing the Placing Programme in order to capitalise on these opportunities and to seek to continue to generate positive returns for investors, and believes that the proceeds received from the First Placing will enable it to build on existing relationships and foster new ones within the markets in which it operates."

ENQUIRIES

For further information, please contact:

Pollen Street Capital Limited

Lindsey McMurray / James Scott / Matthew Potter
020 3728 6750

Liberum Capital Limited

Chris Clarke / Henry Freeman / Robert Johnson
020 3100 2000

Instinctif Partners

Tim Linacre / Giles Stewart
020 7457 2020

Background and Rationale for the Placing Programme and First Placing

The Company has fully invested the proceeds of the IPO Placing and the placings of Ordinary Shares undertaken in May and December 2016, primarily through the acquisition of loans originated by Origination Partners, the acquisition of loan portfolios and the provision of wholesale facilities.

The Directors believe the pipeline of potential acquisitions remains strong, with yields in line with return targets. The Company is currently evaluating a mixture of opportunities including seasoned portfolios, secured facilities and organic opportunities.

Honeycomb Investment Trust plc

The Company seeks to provide shareholders with an attractive level of dividend income and capital growth through the acquisition of loans made to consumers and small businesses and selected equity investments that are aligned with the Company's strategy and that present opportunities to enhance the Company's returns from its investments.

The Company is focused on acquiring credit assets in segments of the market that are underserved by traditional lenders. The Directors believe attractive yields can be generated through the cycle via the application of the Investment Manager's specialist skills in the sectors in which the Company is focused.

Whilst not forming part of its investment policy, once the Company has incurred borrowings in line with its borrowing policy, the Company will target the payment of dividends on the Ordinary Shares which equate to a yield of 8.0 per cent. per Ordinary Share per annum on the issue price for the IPO placing¹.

¹ There is no guarantee that the target returns or dividends stated above can or will be achieved and these should not be seen as a forecast of the Company's expected or actual return. Target returns are not a reliable indicator of future performance. Accordingly, investors should not place any reliance on the target returns or dividends when deciding whether to invest in the Company's shares.

Pollen Street Capital Limited

Pollen Street Capital Limited (the "Investment Manager") serves as the Company's Investment Manager and has been appointed as an alternative investment fund manager for the purposes of the AIFM Directive. The Investment Manager is responsible for the discretionary management of the Portfolio. The Investment Manager Limited is authorised and regulated in the UK by the Financial Conduct Authority.

The Investment Manager was formed in November 2013 when the Royal Bank of Scotland private equity team spun-out to establish an independent fund management business. The team has focussed on the financial services sector since 2008, following the launch of the £1.1 billion RBS Special Opportunities Fund. It has since founded or invested in a number of financial services businesses including Shawbrook, Arrow Global and Target.

The Investment Manager's track record includes investments in 13 financial services businesses, representing a total investment of £603.3 million. As at 30 April 2017, the Investment Manager valued such investments (on the basis of the total consideration for realised investments and the current value of unrealised investments) at £1,619.4 million, representing an average gross multiple of capital invested of 2.7x and an average gross internal rate of return of 28.6 per cent.

IMPORTANT NOTICE

This announcement, which constitutes a financial promotion for the purposes of the Financial Services and Markets Act 2000 and which has been prepared by, and is the sole responsibility of, the Company, has been approved solely for the purposes of section 21(2)(b) of the Financial Services and Markets Act 2000 by a company that is authorised and regulated by the UK Financial Conduct Authority ("FCA").

This announcement is an advertisement and does not constitute a prospectus relating to the Company and does not constitute, or form part of, any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any Issue Shares in the Company in any jurisdiction nor shall it, or any part of it, or the fact of its distribution, form the basis of, or be relied on in connection with or act as any inducement to enter into, any contract therefor.

The information contained in this announcement is for background purposes only and does not purport to be full or complete.  Investors should not purchase or subscribe for any transferable securities referred to in this announcement except on the basis of information contained in the Prospectus (and, in relation to Issue Shares issued under the Placing Programme, any supplementary prospectus). Copies of the Prospectus will shortly be made available for viewing at the National Storage Mechanism at http://www.morningstar.co.uk/NSM and on the Company's website at http://www.honeycombplc.com/documents/.

The Issue Shares are only suitable for investors: (i) who are institutional, professional and knowledgeable (including those who are professionally advised); (ii) for whom an investment in the Issue Shares is part of a diversified investment programme; and (iii) who fully understand and are willing to assume the risks involved in such an investment, including the potential risks of capital loss and that there may be limited liquidity in the underlying investments of the Company. The value of shares and the income from them is not guaranteed and can fall as well as rise due to stock market and currency movements.  When you sell your investment you may get back less than you originally invested. If you are in any doubt about the contents of this announcement you should consult your accountant, legal or other professional adviser or financial adviser. Past performance is not a guide to future performance and the information in this announcement or any documents relating to the Issue cannot be relied upon as a guide to future performance.

Liberum Capital Limited is acting only for the Company in connection with the matters described in this announcement and is not acting for or advising any other person, or treating any other person as its client, in relation thereto and will not be responsible for providing the regulatory protection afforded to clients of Liberum Capital Limited or advice to any other person in relation to the matters contained herein.

Neither Liberum Capital Limited nor the Investment Manager nor any of their respective directors, officers, employees, advisers or agents accepts any responsibility or liability whatsoever for, or makes any representation or warranty, express or implied, as to the truth, accuracy of completeness of, the information in this announcement (or whether any information has been omitted from this announcement) or any information relating to the Company, whether written, oral or in a visual or electronic format, and howsoever transmitted or made available or any loss howsoever arising from any use of this announcement or its contents to otherwise in connection with it.

The Issue Shares have not been, nor will they be, registered under the US Securities Act of 1933, as amended (the "Securities Act") or with any securities regulatory authority of any state or other jurisdiction of the United States or under the applicable securities laws of any member state of the EEA (other than the United Kingdom), Australia, Canada, Japan, or South Africa. Accordingly, subject to certain exceptions, the Issue Shares may not be offered or sold in any member state of the EEA (other than the United Kingdom), the United States, Australia, Canada, Japan or South Africa or to or for the account or benefit of any national, resident or citizen of any member state of the EEA (other than the United Kingdom), Australia, Canada, Japan, South Africa, the United States or to, or for the account or benefit of US persons (as defined in Regulation S under the Securities Act). The Issue and the distribution of this announcement in other jurisdictions may be restricted by law and the persons into whose possession this announcement comes should inform themselves about, and observe, any such restrictions.

The Company has not been, and will not be, registered under the US Investment Company Act of 1940, as amended.

This announcement may include "forward-looking statements". All statements other than statements of historical fact included in this announcement, including, without limitation, those regarding and target returns, are forward-looking statements. Forward-looking statements are subject to risks and uncertainties and accordingly the Company's actual future financial results and performance may differ materially from the results and performance expressed in, or implied by, the statements.  These factors include but are not limited to those described in the Prospectus. These forward-looking statements speak only as at the date of this announcement.  The Company expressly disclaims any obligation or undertaking to update or revise any forward-looking statements contained herein to reflect actual results or any change in the assumptions, conditions or circumstances on which any such statements are based unless required to do so by the Financial Services and Markets Act 2000, the Listing Rules or Prospectus Rules of the FCA or other applicable laws, regulations or rules.

 

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