Notice of Requisitioned General Meeting

Strategic Equity Capital plc

Publication of Circular

3 March 2021

As announced on 8 February 2021, the Board of Strategic Equity Capital (the “Company”) received a request to requisition a general meeting of the Company from two of its Shareholders, Ian Armitage and Jonathan Morgan, representing 7.66 per cent. of the Company’s issued share capital (the "Requisitionists"). 

The Company is required to convene a General Meeting for the purpose of allowing Shareholders to consider and vote on two requisitioned resolutions (the "Resolutions").  The Resolutions relate to the continuation of the Company.  Resolution 1 is a continuation resolution in a similar form to that put to Shareholders at the Annual General Meeting, the latest one being passed in November 2020.  Resolution 2 requires the Board, in the event that Resolution 1 is not passed, to put forward proposals to Shareholders within eight weeks to enable those Shareholders who want to realise their investment in the Company for cash at or close to net asset value, or to exchange their Shares for shares in another investment vehicle, an opportunity to do so. 

The Board unanimously recommends that Shareholders vote FOR Resolution 1 (continuation of the Company) and AGAINST Resolution 2 (reconstruction proposals).

The Company’s fund management team and its portfolio have recently been subject to a detailed strategy review by the Investment Manager, which was appointed in May 2020, and with the oversight of the Board.  Changes to the fund management team were announced in September 2020 with Ken Wotton appointed as lead manager of the Company's portfolio alongside Adam Khanbhai. 

On 2 March 2021, the Company published its interim report for the half-year period to 31 December 2020.  In that report, the Board set out the positive returns of the Company in that period and noted the promising developments at portfolio companies. The Board has confidence in the management team's strategy for the portfolio and a vote against continuation of the Company at this early stage would, in the Board's opinion, not give the management team sufficient time to implement and demonstrate the benefits of their strategy and would, accordingly, be likely to prejudice the performance of the portfolio and therefore the interests of Shareholders.

The Shareholders are given a regular opportunity to consider the future of the Company at each Annual General Meeting, at which a continuation resolution is proposed to Shareholders in substantially the same form as Resolution 1 proposed at the forthcoming General Meeting.  In the event that any continuation resolution fails to pass, the Board will be required to put to Shareholders proposals for the liquidation or other reconstruction of the Company.  This is substantially the same as what is proposed by Resolution 2.  Each continuation vote of the Company so far has been passed, with the most recent continuation vote being approved by a comfortable margin at the Annual General Meeting in November 2020.  Shareholders will be afforded another opportunity to vote on the continuation of the Company at the next Annual General Meeting which is expected to take place in or around November 2021.

Given that the Board undertakes continuation votes annually at the AGM, the Board believes that the Resolutions proposed by the Requisitionists are unnecessary.  Nevertheless, the Board is obligated to convene the General Meeting to put these Resolutions to Shareholders.

The Board has consulted with certain key Shareholders who together hold Shares representing approximately 40.3 per cent. of the issued share capital of the Company as at 2 March 2021 (being the latest practicable date prior to the publication of this document), who have expressed their support for the Company’s continuance and the Investment Manager’s strategy, and have indicated that they will vote for Resolution 1 and against Resolution 2 at the General Meeting.

The Company has today despatched a circular to Shareholders (the “Circular”) which convenes the General Meeting of the Company for 10.00 a.m. on 30 March 2021.

The Resolutions that will be put to Shareholders at the General Meeting are:

1.  that the Company should continue as an investment trust until the conclusion of the next Annual General Meeting of the Company; and

2.  that, if Resolution 1 is not passed, then within eight weeks the board of the Company shall put forward proposals to enable those Shareholders who want to realise their investment in the Company for cash at close to net asset value or (at the option of each Shareholder) to exchange their Shares for shares in another investment vehicle.

Resolution 1 will be proposed as an ordinary resolution and Resolution 2 will be proposed as a special resolution.  Both Resolutions will be conducted on a poll.  An ordinary resolution requires a simple majority of members entitled to vote and present in person or by proxy to vote in favour in order for it to be passed. A special resolution requires a majority of at least 75 per cent. of members entitled to vote and present in person or by proxy to vote in favour in order for it to be passed.

Proxies should be returned by no later than 10.00 a.m. on 26 March 2021.  All Shareholders are entitled to attend and vote at the General Meeting.  However, in light of social distancing measures imposed by the Government as a result of the current Covid-19 pandemic, any Shareholder seeking to attend the General Meeting in person may be refused entry to the General Meeting. Shareholders are therefore strongly encouraged to appoint the chairman of the meeting as their proxy, in CREST or by completing the form of proxy enclosed with the Circular.

A copy of the circular published today will shortly be available on the Company’s website www.strategicequitycapital.com and available at the National Storage Mechanism which is located at https://data.fca.org.uk/#/nsm/nationalstoragemechanism.

Capitalised terms used in this announcement have the same meaning as given to them in the Circular unless otherwise defined.

LEI: 2138003R5GB8QZU2G577

Enquiries:

Strategic Equity Capital plc

Richard Hills (Chairman)

(via PATAC below)

PATAC Limited (Company secretary)  0131 378 0500

Steven Davidson

Investec Bank plc (Broker)   020 7597 4000

Lucy Lewis   

Tom Skinner