Tender Offer

RNS Number : 4437Z

Qatar Investment Fund PLC

11 December 2014

 



11 December 2014

Qatar Investment Fund PLC 

("QIF" or the "Company")

Tender Offer to purchase up to 10 per cent. of the Company's issued share capital

A circular explaining the terms of a Tender Offer for up to 10 per cent. of the issued Share Capital of the Company and a notice of an Extraordinary General Meeting to be held on 9 January 2015 has today been posted to Shareholders (the "Circular").

1.    Introduction

As set out in the 2012 Circular, the Directors have decided, subject to Shareholder approval and the Company satisfying the distributable profits requirements under Isle of Man law, to implement a tender offer in the fourth quarter of 2014, on similar terms to the 2013 Tender Offer, for up to 10 per cent. of the Company's issued Share Capital at the Record Date (excluding treasury shares) in the event that the average discount to NAV per Share at which the Shares trade in the twelve month period from the 2013 Calculation Date to 27 November 2014 has been greater than 10 per cent. 

Notwithstanding the improvement in the NAV per Share performance of the Company during 2014, the average discount to NAV per Share at which the Shares traded for the past 12 month period has been 14.0 per cent. (from the 2013 Calculation Date to 27 November 2014), and has therefore exceeded 10 per cent.

Accordingly, the Directors have put forward to Shareholders a tender offer for up to 10 per cent. of the Company's issued Share Capital (excluding treasury shares) at a discount of 1 per cent. to Formula Asset Value on the Calculation Date. The total number of Shares to be purchased under the Tender Offer will not exceed 15,477,601 Shares, representing 10 per cent. of the Company's issued Share Capital as at 10 December 2014 (being the latest practicable date prior to the publication of this the Circular).

2.    The Company's Performance and Prospects

The Company is a closed-ended investment company which was incorporated in the Isle of Man on 26 June 2007.  The investment objective of the Company is to invest primarily in Qatari equities and in listed companies in other GCC countries. 

As at 10 December 2014, being the latest practicable date prior to the publication of this document, the unaudited Net Asset Value per Ordinary Share was US$1.5786 and the closing mid-market Share price was US$1.311.

The Company's NAV per Share has improved from US$1.2649 at 28 November 2013 to US$1.6399 at 27 November 2014, an increase of 29.65 per cent. This compares to the 28.49 per cent. increase in the QE Index over the same period.

During this period, Shareholders also received a dividend of 3.2 cents per Share which was paid in January 2014, and the Directors have declared a dividend for the 2014 financial year of 3.5 cents per Share payable in February 2014.

Qatar's economy continues to grow, with GDP increasing 5.7% in the April-June quarter of 2014 compared to the April-June quarter of 2013, according to Qatar Statistics Authority (QSA).  In the April-June quarter of 2014, GDP accelerated from a downwardly revised 5.4% in the previous quarter.  Q2 growth was mainly driven by double-digit expansion in the non-hydrocarbon sector.  The non-hydrocarbon sector GDP grew 11.3% in the April-June quarter of 2014 over the April-June quarter of 2013 due to demand in electricity, construction, trading, hospitality and financial sectors, and the growing population.

The hydrocarbon sector GDP contracted 2.2% during the same period, because of lower oil production, some major maintenance shutdowns in Natural Gas Liquids (NGL) and Liquefied Natural Gases (LNG) plants and the lower oil price.

Looking ahead Qatar's GDP will be driven by expansion of the non-hydrocarbon sector as demand for domestic goods and services is expected to remain strong.  According to the QNB Group, Qatar's GDP growth in 2014 is expected to be 6.8% accelerating to 7.5% in 2015 and 7.8% in 2016.  The non-hydrocarbon sector is estimated to grow by over 11% each year, while the hydrocarbon sector growth is likely to be between 0.6% - 1.0% between 2014 and 2016. The Investment Adviser believes GDP forecasts may reduce given the recent fall in the oil price but no updated forecasts have been issued.

Population growth in Qatar remained healthy, rising 6.9% at the end of September 2014 compared to December 2013.  The population is expected to rise by an average of 7.3% over 2014-16, which will encourage the domestic consumer and services sectors.

The long term prospects for the Qatari economy remain compelling because of massive infrastructure spending (US$182 billion over 2014-2018) and favourable demographics.  GDP growth from an expanding non-hydrocarbon sector and rising population should drive consumption spending, creating opportunities in financial services, transport, communications, and real estate.

The banking sector should benefit from demand for project financing and consumer lending.  Hence, the Investment Adviser favours selected domestic banks, real estate and consumer driven companies.

In the near term, growth prospects for the Qatari economy and the Qatari market are expected to remain good because of the near term infrastructure project pipeline, expansionary budget announcements, moderate corporate earnings growth and an attractive dividend yield.

3.    The Tender Offer

The Board has decided to implement a tender offer for up to 10 per cent. of the Shares in issue (excluding treasury shares) on the Record Date. The Board is aware that the Shares are tightly held and that therefore the liquidity in the Shares can at times be limited. This Tender Offer is designed to enable those Shareholders (other than Restricted Shareholders) who wish to realise a portion of their holding of Shares to have the opportunity to do so.

The Tender Price will be an amount equal to a discount of 1 per cent. to Formula Asset Value as at the Calculation Date, calculated in accordance with paragraph 3 of Part III of the Circular. The Record Date for the Tender Offer is 5.30 p.m. on 15 December 2014.

The Tender Offer will be conditional on the passing of the Resolution to be proposed at the Extraordinary General Meeting. The Tender Offer will also be conditional on the Company satisfying the distributable profits requirements under Isle of Man law at the time of the Tender Offer.

Continuing Shareholders should receive an uplift to their NAV per Share as the Tender Price is being calculated to a discount of 1 per cent. to Formula Asset Value (which includes the costs of the Tender Offer (including the costs of associated portfolio realisations)).

The Tender Price will be paid to Shareholders in US Dollars and will be effected by the despatch of cheques drawn on an account of a branch of a United Kingdom clearing bank, or the crediting of CREST accounts as appropriate.

The Tender Offer is being made by Panmure Gordon who, as principal, will purchase at the Tender Price the Shares validly tendered (subject to the overall limits of the Tender Offer) and, following the completion of all those purchases, sell the relevant Shares on to the Company at the Tender Price by way of an on-market transaction, in accordance with the terms of Repurchase Agreement. All transactions will be carried out on the London Stock Exchange.

Shareholders are not obliged to tender any Shares and, if they do not wish to participate in the Tender Offer, Shareholders should not complete or return their Tender Form.

Conditions

The Tender Offer is conditional, inter alia, upon: (i) the Company obtaining the necessary Shareholders' authority to implement the Tender Offer at the Extraordinary General Meeting; (ii) the Company satisfying the distributable profits requirements under Isle of Man law at the time of the Tender Offer; and (iii) the Repurchase Agreement becoming unconditional in all respects (save in respect of any condition relating to the Tender Offer becoming unconditional).

Implementation of the Tender Offer will require approval by Shareholders at the Extraordinary General Meeting, which is to be held at 10.30 a.m. on 9 January 2015. The Tender Offer is also conditional upon Panmure Gordon being satisfied that the Company has sufficient funds available to meet its obligations under the Repurchase Agreement. In addition, the Tender Offer may be postponed or terminated in certain other circumstances.

4.    Restricted Shareholders and other Overseas Shareholders

The Tender Offer is not being made to Restricted Shareholders. In particular, the Tender Offer is not being made, directly or indirectly, in or into or by the use of mails by any means or instrumentality (including, without limitation, facsimile transmission, internet, telex and telephone) of interstate or foreign commerce, or any facility of a national securities exchange of the United States, nor is it being made directly or indirectly in or into Canada, Australia, Republic of South Africa or Japan and the Tender Offer cannot be accepted by any such use, means, instrumentality or facility or from within the United States, Canada, Australia, Republic of South Africa or Japan.

It is the responsibility of all Overseas Shareholders to satisfy themselves as to the observance of any legal or regulatory requirements in their jurisdiction, including, without limitation, any relevant requirements in relation to the ability of such Overseas Shareholders to participate in the Tender Offer.

5.    General Meeting

The Proposal set out in this document is subject to Shareholder approval at the Extraordinary General Meeting that has been convened for 10.30 a.m. on 9 January 2015, to be held at the offices of Galileo Fund Services Limited, Millennium House, 46 Athol Street, Douglas, Isle of Man IM1 1JB. The Resolution to be proposed is to authorise the Company to make market purchases of its Shares pursuant to the Tender Offer on the terms set out in this document.

6.    Recommendation

The Board considers that the Proposal is in the best interests of Shareholders as a whole. Accordingly, the Board recommends that Shareholders vote in favour of the Resolution to be proposed at the Extraordinary General Meeting, as those Directors who hold beneficial interests in Shares intend to do in respect of their own beneficial holdings of Shares which, in aggregate, amount to 88,944 Shares representing approximately 0.06 per cent. of the issued Share capital of the Company.

The Investment Adviser has indicated its intention to tender its Basic Entitlement of 2,825,371 Shares pursuant to the Tender Offer. Each of Nicholas Wilson and Leonard O'Brien, Directors of the Company, has indicated his intention to tender his Basic Entitlement of 4,500 Shares and 4,394 Shares, respectively, pursuant to the Tender Offer.

The Board makes no recommendation to Shareholders as to whether or not they should tender their Shares. Whether or not Shareholders decide to tender any of their Shares will depend, among other things, on their individual circumstances including their tax position and on their view of the Company's prospects. Shareholders in any doubt as to the action they should take should consult an appropriately qualified independent financial adviser, authorised under the Financial Services and Market Act 2000, without delay.

7.    Expected Timetable of Principal Events

The expected timetable for the Tender Offer is as follows:

Record Date for participation in the Tender Offer	5.30 p.m. on 15 December 2014
Latest time and date for receipt of Tender Forms or for settlement of TTE Instructions in respect of the Tender Offer	1.00 p.m. on 6 January 2015
Latest time and date for receipt of Forms of Proxy in respect of the Extraordinary General Meeting	10.30 a.m. on  7 January 2015
Extraordinary General Meeting	10.30 a.m. on 9 January 2015
Calculation Date	5.30 p.m. on 20 January 2015
Results of the Tender Offer and Tender Price announced	23 January 2015
Settlement date: cheques despatched and CREST accounts credited with proceeds in respect of successfully tendered Shares	30  January 2015
Balancing certificates despatched and CREST accounts credited in respect of unsold Shares	from 30 January 2015

Capitalised terms and expressions shall have the same meanings as those attributed to them in the Circular.

A copy of the Circular will shortly be available for inspection on the National Storage Mechanism at www.hemscott.com/nsm.do and is available for download from the Company's website www.qatarinvestmentfund.com/publications.

For further information:

Qatar Investment Fund Plc [phone]

Leonard O'Brien

Panmure Gordon [phone]

Richard Gray / Andrew Potts / Atholl Tweedie

Maitland [phone]

William Clutterbuck / Robbie Hynes

Galileo Fund Services Limited [phone]

Ian Dungate

 

END

 

 

TENGGGMCPUPCGMU