Placing of ZDP Shares & publication of Prospectus

RNS Number : 1602U

Acorn Income Fund Ld

16 December 2011

 

Acorn Income Fund Limited

Placing of new ZDP Shares and publication of Prospectus

16 December 2011

The Board of Acorn Income Fund Limited is pleased to announce the Placing of 12,000,000 new zero dividend redeemable preference shares at a price of £1 each, raising gross proceeds of £12 million and estimated net proceeds after expenses and issue costs of approximately £11.6 million.

A prospectus containing details of the ZDP Shares and other information (the "Prospectus") has been submitted to the National Storage Mechanism and will shortly be available for inspection at http://www.Hemscott.com/nsm.do.  A copy of the Prospectus can also be downloaded from http://www.premierassetmanagement.co.uk.

The ZDP Shares

Application has been made for the standard listing of the ZDP Shares on the Official List and for them to be admitted to trading on London Stock Exchange plc's main market for listed securities.  It is expected that admission will be effective and dealings will commence on 21 December 2011.  The ZDP Shares do not entitle the holder to any dividends or, save in certain circumstances, to vote at general meetings; however Acorn Income Fund may not, without the prior approval of ZDP Shareholders (inter alia): (i) take on any bank borrowings (save for short term borrowings in the ordinary course of business such as to settle share trades or borrowings to finance the redemption of the ZDP Shares) until the ZDP Repayment Date; (ii) pay any dividends out of capital reserves; (iii) pass a resolution releasing the Directors from their obligation to redeem the ZDP Shares on the ZDP Repayment Date; (iv) issue any securities or shares which rank pari passu with or in priority to the ZDP Shares; (v) make any material change to the Company's investment policy which, at the time of making such change, appears likely in the reasonable opinion of the Directors to be materially prejudicial to the holders of the ZDP Shares; (vi)  make any material change to the basis on which the Company charges expenses to its revenue and capital accounts; or (vii) pass any resolution to vary, modify or abrogate any of the special rights attached to the ZDP Shares.

Key information about the ZDP Shares:

Expected admission date                                    21 December 2011

Redemption Date                                              31 January 2017

Issue price per ZDP Share                                 100 pence

Final Capital Entitlement per ZDP Share             138 pence

Gross Redemption Yield                                    6.5 per cent. per annum

Initial Cover                                                      1.57 times

Hurdle rate to receive the Final Capital Entitlement          - 8.77 per cent. per annum

Hurdle rate to receive the initial subscription price           - 14.34 per cent. per annum

ISIN                                                                 GG00B4W1FT21

SEDOL Code                                                     B4W1FT2

Ticker                                                               AIFZ

Use of proceeds

Approximately £6.00 million of the net proceeds will be applied to repay all Acorn Income Fund's borrowings and the balance, being approximately £5.6 million will be invested in Acorn Income Fund's two Portfolios. .

Portfolio information as at close of business on 14 December 2011

The Prospectus contains an analysis of Acorn Income Fund's Portfolios as at close of business on 14 December 2011.  At that time the Net Asset Value per Ordinary Share was 181.11 pence.

John Boothman, Chairman, said "I am delighted that Acorn Income Fund has been able to raise the funds necessary to refinance its borrowings well in advance of the facility expiry date in February 2012.  While nothing can be guaranteed in investment markets, the Board expects that the interest saving on repayment of the borrowings and the increase in the size of the Portfolios following the Placing will lead to additional net income and improved revenue return per Ordinary Share in due course and I would like to welcome the new ZDP Shareholders to the Company.

Enquiries:

Anson Fund Mangers Limited (Administrator and Company Secretary)

Matthew Rowe                                                                                           Tel: [phone]

Unicorn Asset Management Limited - Investment adviser to the Smaller Companies portfolio

John McClure                                                                                             Tel: [phone]

Premier Fund Managers Limited - Investment adviser to the Income portfolio

Nigel Sidebottom                                                                                         Tel: [phone]

Fairfax I.S. PLC - Financial adviser and broker to Acorn Income Fund          Tel:[phone]

David Floyd

John Korwin-Szymanowski

Words and expressions used in this announcement have the same meanings as in the Prospectus.

Fairfax I.S. PLC ("Fairfax"), which is authorised and regulated by the Financial Services Authority, has given and has not withdrawn its written consent to the publication of this announcement containing references to its name in the form and context in which they appear.  Fairfax is acting exclusively for Acorn Income Fund and not for any other person in relation to the matters referred to in this document and will not be responsible to any other person for providing the protections afforded to customers of Fairfax in relation to the matters referred to herein.

This announcement does not constitute an offer or invitation to subscribe for securities.

E&OE - in transmission

 

END

 

 

STRBDBDDUUBBGBL