Publication of Circular and Notice of EGM

RNS Number : 7472J

Securities Trust of Scotland PLC

19 July 2013

Securities Trust of Scotland plc

General Meeting to extend the Board's Authority to issue Shares

Following the announcement on 5 July 2013, the Board of Securities Trust of Scotland (the "Company") wishes to seek an extension of its authority to issue further Shares, in order to meet the continuing demand for the Company's Shares. The proposals set out in a circular issued today by the Company (the "Circular") explain how the issue of further Shares will help the Company manage the premium and why this is advantageous to Shareholders.

The purpose of the Circular is, therefore, to convene a general meeting (the "General Meeting") at which appropriate new shareholder authorities will be sought. The General Meeting is to be held at 1.00 p.m. on 23 August 2013 at Saltire Court, 20 Castle Terrace, Edinburgh, EH1 2ES. Terms used in this announcement have the same meaning as set out in the Circular.

Investment Performance

Since the change in benchmark to the MSCI World High Dividend Yield index on 1 August 2011, the Company's investment performance has exceeded that of the new benchmark:

	One Month	Three Months	Six Months	One Year	Since 31 July 2011
STS Share Price Total Return	3.0%	5.5%	17.9%	27.3%	47.4%
STS NAV Total Return	4.6%	4.8%	14.8%	25.6%	34.3%
Benchmark Total Return	4.4%	3.4%	14.1%	24.8%	33.9%

Note: Cumulative Performance to 17th July 2013. Past performance is not a guide to future returns

Source: Martin Currie and Morningstar. Benchmark is the MSCI World High Dividend Yield index

In view of the strong performance, and the appeal of the global mandate, the Company has consistently traded at a premium to net asset value over the last 12 months.

In the Manager's opinion, global high yielding companies with persistent and sustainable dividends have a long track record of outperforming the broader global equity market. The Manager believes this situation will continue given the relative valuation of such stocks and sees plenty of opportunities in high quality, growing companies with attractive valuations that offer an attractive combination of dividend yield and dividend growth. The Board believes that the Manager's investment approach leaves the Company well positioned to take advantage of investment opportunities as they arise.

Reasons for requiring an extension of the Board's authorities

At the annual general meeting of the Company which was held on 16 July 2013, Shareholders granted the Board standard authorities to allot (and, as the case may be, to reissue from treasury) up to an agreed maximum number of Shares on a non pre-emptive basis during the period from that annual general meeting until the Company's next annual general meeting, which is expected to be held in July 2014.

These authorities are due to expire at the conclusion of the Company's next annual general meeting, unless Shareholders resolve to revoke, vary or extend those authorities at an earlier date.

The Board, however, believes that this current capacity may prove insufficient to allow the Board to continue to satisfy demand for the Company's Shares during the period up to the Company's next annual general meeting and is therefore seeking an extension of its authority to issue further Shares on a non pre-emptive basis. In the period from 2 July 2012 to 5 July 2013, the Board issued 11.634 million new Shares at a premium to the prevailing NAV.

Intentions regarding the issue of further Shares

Investment trusts have long suffered from volatile discounts to NAV. Sometimes, too, the shares of individual investment trusts may trade temporarily at a significant premium to NAV. This can put investors at a disadvantage, because they may find themselves buying shares at a sizeable premium which may be sustained and which may therefore have an adverse effect on the return from their investment.

The Board obtained authority at the recent annual general meeting to buy back up to 16,690,581 Shares and to allot Shares. The Board considers that successfully securing the authorities which are to be sought from Shareholders at the General Meeting to extend its authority to issue further Shares on a non pre-emptive basis will assist the Company in managing the premium.

The Board remains committed to the continuing expansion of the Company, which should benefit Shareholders by, for example, reducing each Shareholder's proportion of the Company's on-going charges to NAV. The Board would therefore use the shareholder authorities which are being sought at the General Meeting to meet their broader objective of continuing to grow the Company where suitable opportunities arise.

In any event, the Directors will only issue new Shares (or, as the case may be, re-issue Shares from treasury) when they believe that it is advantageous to the Company's Shareholders to do so and in no circumstances would any issue of new Shares or re-issue of Shares from treasury be at an issue price which would result in a dilution of NAV.

New Shares will rank pari passu in all respects with the existing issued Shares. It is expected that new Shares will be admitted to the Official List and to trading on the main market of the London Stock Exchange not later than the fifth business day following the Board's resolution to issue those new Shares.

Prospectus requirement

The Prospectus Rules provide that where a company wishes to apply for the admission to trading on a regulated market of shares representing, over a period of 12 months, 10 per cent. or more of that company's shares which are already admitted to trading on that regulated market, then the company concerned is required to issue a prospectus.

The Company anticipates that it is likely to reach or exceed the rolling 12 months' 10 per cent. limit on applications for admission to trading in the course of using the authorities which are to be sought at the General Meeting. Accordingly, the Company intends to publish a prospectus shortly following the date of the General Meeting, on the assumption that the required authorities are obtained at the General Meeting.

A copy of the circular will shortly be available for inspection at www.hemscott.com/nsm.do.

Copies of the circular are also available for collection during normal business hours on any day (Saturday, Sunday and public holidays excepted) from the registered office of the Company at Saltire Court, 20 Castle Terrace, Edinburgh, EH1 2ES

Expected Timetable

2013

Latest time and date for receipt of forms of direction from Alliance Trust Savings Plan Investors	Close of business on 16 August
Latest time and date for receipt of forms of proxy from Shareholders	1.00 p.m. on 21 August
General Meeting	1.00 p.m. on 23 August
Issue of prospectus	late August
Issues of further Shares	from late August
Admission and dealings commence in new Shares	from late August