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Fidelity Jap.OTC (26GU)

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Monday 20 December, 1999

Fidelity Jap.OTC

Reconstruction Proposals

Fidelity Japan OTC&Regional Mkts Fd
20 December 1999

              FIDELITY JAPAN OTC & REGIONAL MARKETS FUND LIMITED 
                 RECOMMENDED PROPOSALS FOR THE RECONSTRUCTION 
                     OF THE COMPANY AS AN OPEN ENDED FUND

Key features

- Proposed reconstruction of Fidelity Japan OTC & Regional Markets Fund 
Limited to provide Shareholders with the opportunity to roll over their 
investment into an open ended fund with a similar investment policy - 
the Fidelity Funds Emerging Japan Fund, a new sub-fund of Fidelity Funds 
SICAV.

- Shareholders can roll all or part of their investment into the Emerging 
Japan Sub-fund or elect for shares in the Fidelity Funds US Dollar Cash 
Fund, an existing sub-fund of Fidelity Funds SICAV, which can be redeemed
for cash.

- These proposals enable Shareholders to retain an ongoing exposure to the 
Japan OTC Market through an open ended fund or to realise their investment
for cash at a price based upon NAV per Share.

- A Circular will be sent to Shareholders shortly outlining these proposals
in full.

Enquiries:

Alex Hammond-Chambers        Chairman, Fidelity Japan OTC &     0131 222 9430
                             Regional Markets Fund Limited

Barbara Powley               Fidelity International Limited     01737 836 883

Nicholas Gold                ING Barings Limited                0171 767 1000
William Marle


Expected Key Dates:
                                              2000
Latest date for receipt of Forms of 
Election from Shareholders                    Saturday, 29th January

First Extraordinary General Meeting           Monday, 31st January

Second Extraordinary General Meeting          Friday, 10th March

Payments made under the Redemption Option     no later than Friday, 17th March




               FIDELITY JAPAN OTC & REGIONAL MARKETS FUND LIMITED 
                         ('the Fund' or 'the Company')
                 RECOMMENDED PROPOSALS FOR THE RECONSTRUCTION 
                     OF THE COMPANY AS AN OPEN ENDED FUND

Introduction

The Company was incorporated in the Cayman Islands on 1st March, 1990 and 
is a closed ended investment company listed on the London Stock Exchange.  
At the time of incorporation the Directors intended that the future of the 
Company should be reviewed after ten years and that proposals for either 
the continuation of the Company as a closed ended investment company, its 
conversion into an open ended investment company, or its winding-up should 
be submitted for the approval of the Shareholders at that time.

The Directors have accordingly reviewed the future of the Company and have 
concluded that the interests of the Company and the Shareholders would be 
best served if the Company is reconstructed in a manner that allows those 
Shareholders who so wish to retain an investment with the same fund manager 
and no material change to the investment policy while at the same time 
enabling other Shareholders to realise some or all of their investment.

The reconstruction will provide Shareholders with the chance to retain an 
equity exposure to the Japan OTC Market through converting their holding in 
the Company into a holding in the Emerging Japan Sub-fund, a new sub-fund 
being established by Fidelity Funds SICAV to invest in the Japanese OTC 
Market, the TSE Mothers Market and other similar markets for emerging 
Japanese companies and/or to convert into a holding in the US Dollar Sub-
fund, a sub-fund of Fidelity Funds SICAV investing principally in US Dollar 
denominated debt securities and money market instruments.

Shareholders who elect for the US Dollar Sub-fund may also choose, if they 
wish, for any or all of the shares they receive to be redeemed for cash at 
the net asset value per share on the business day following the date the 
proposals become effective (the 'Effective Date').

The proposals are expected, subject to the approval of Shareholders, to 
become effective on 10th March, 2000. 

The Proposals

The proposals provide for the Company to be put into members' voluntary 
liquidation and for the division of the Company's assets (after taking 
account of, inter alia, the expenses of the Scheme and the assets to be 
retained by the Liquidators to meet the liabilities of the Company) between 
two sub-funds of Fidelity Funds SICAV:

- the Emerging Japan Sub-fund, which is a new open ended sub-fund of 
Fidelity Funds SICAV that is being established with a similar 
investment objective to the Company; and

- a US Dollar Sub-fund of Fidelity Funds SICAV, whose aim is to provide 
investors with a relatively high and regular income, where both 
capital security and high liquidity are prime considerations, from a 
professionally managed portfolio of debt securities and other assets, 
with the opportunity to achieve the objective of regular income and 
high liquidity. 

Shareholders who wish will be able to redeem some or all of their shares 
in the US Dollar Sub-fund for cash by electing for the Redemption Option.

Benefits to Shareholders

The proposals include a number of features:

(a) Shareholders wishing to retain an equity exposure to the Japan OTC 
Market may elect to invest in the Emerging Japan Sub-fund which will 
have substantially the same investment objective, and the same 
investment manager, as Fidelity Japan OTC & Regional Markets Fund 
Limited and which, as an open-ended investment company, permits 
redemption of shares at the option of the investor and at a price close 
to the net asset value.  If the Japan Smaller Companies Sub-fund Option 
applies (as described below), Shareholders may, nevertheless, retain an 
equity exposure to smaller Japanese companies.

(b) The US Dollar Sub-fund represents a readily realisable cash 
equivalent investment.  Shareholders who wish to realise their 
investment in the Company may take a cash exit by electing to receive 
shares in the US Dollar Sub-fund and for those shares to be redeemed at 
the net asset value per share on the business day following the 
Effective Date.

(c) No preliminary charge will be levied on any shares issued by Fidelity 
Funds SICAV to Shareholders pursuant to the proposals.

(d) Shareholders who elect to convert their investment into shares in the 
Emerging Japan Sub-fund or, if the Japan Smaller Companies Sub-fund 
Option applies, the Japan Smaller Companies Sub-Fund will not have made 
a 'disposal' for the purposes of United Kingdom taxation of capital 
gains.

Japan Smaller Companies Sub-fund Option

If the aggregate net asset value of the Ordinary Shares the holders of 
which have elected or are deemed to have elected for Emerging Japan Sub-
fund Shares is $25,000,000 or less on the day on which the special 
resolutions to be proposed at the First EGM are passed, Fidelity Funds 
SICAV may notify the Company by the close of business on that day that it 
will not establish the Emerging Japan Sub-fund as part of the proposals but 
will instead issue to Shareholders who have not elected to receive US 
Dollar Sub-fund Shares in these circumstances, shares in the Japan Smaller 
Companies Sub-fund of Fidelity Funds SICAV.

Mechanics of the Proposals

Following the passing of the special resolutions to be proposed at the 
First EGM described below, the assets of the Company will be split into two 
pools, the Emerging Japan Sub-fund Pool and the US Dollar Sub-fund Pool. 
The division will be pro rata to the number of Ordinary Shares whose 
holders have, or been deemed to have, elected for each Sub-fund.

The investment portfolios of the two Sub-fund Pools will then be 
reorganised, in the period leading up to the Effective Date, so that each 
comprises securities of a type that are eligible for transfer into the 
Emerging Japan Sub-fund and the US Dollar Sub-fund respectively.  The costs 
of these reorganisations will be borne by the relevant Sub-fund Pool.

Following the Second EGM, the Liquidators will retain cash and other assets 
which they consider sufficient to provide for all outstanding liabilities 
of the Company, including the expenses of the Company in relation to the 
proposals, any investments that have not been and are not being transferred 
to Fidelity Funds SICAV and any other contingencies and creditors.  These 
assets will be drawn from the Emerging Japan Sub-fund Pool and the US 
Dollar Sub-fund Pool pro rata to the number of Ordinary Shares whose 
holders have, or been deemed to have, elected for each Sub-fund.

The successor investments

Fidelity Funds SICAV was incorporated in Luxembourg in 1990 and issues a 
series of sub-funds investing in a range of equity, bond, cash and balanced 
funds denominated in a variety of currencies.  Fidelity Funds SICAV is 
managed by Fidelity International Limited.

(a) Emerging Japan Sub-fund 

This is a new sub-fund that is being established for the initial 
purpose of enabling Shareholders to exchange their investment in the 
Company for an investment vehicle with a similar investment 
objective.

The sub-fund aims to achieve long term capital growth primarily 
through investment in equities as well as equity related or debt 
instruments traded on the Japanese OTC Market, the TSE Mothers Market 
and other similar regulated markets for emerging Japanese companies.  
Mr Kenichi Mitzushita, who is the individual who has acted as the 
principal portfolio manager for the Company since December, 1996, 
will be the individual responsible for the management of the 
portfolio of the Emerging Japan Sub-fund.

The sub-fund has been structured to permit investment in the recently 
announced Mothers section of the TSE and new markets such as NASDAQ 
Japan which are expected to attract companies that might previously 
have joined the Japan OTC Market.

The annual management charge will be 1.5 per cent.

(b) US Dollar Sub-fund 

This sub-fund was established in September, 1993 and had net assets 
on 30th November 1999 of approximately $325 million.  The sub-fund 
aims to provide investors with a relatively high and regular income 
where both capital security and high liquidity are prime 
considerations from a professionally managed portfolio of debt 
securities and other assets permitted by law, with the opportunity to 
achieve the objective of regular income and high liquidity.

The annual management charge is 0.4 per cent.

The annual management charge for the Company is 1.75 per cent.


Management Agreement

The existing Management Agreement between Fidelity International Limited 
and the Company will terminate on the Effective Date and Fidelity 
International Limited has waived its right to compensation on such 
termination.

Further details of the Proposals

(a) Entitlements

Each holder of Ordinary Shares will receive shares in the relevant Sub-fund 
or Sub-funds selected, the number of shares to be calculated by dividing 
the value of the assets in the relevant pool at the Effective Date by the 
relevant issue price.  The shares in the Emerging Japan Sub-fund will be 
issued at Y1,000 per share and shares in the US Dollar Sub-fund and, if the 
Japan Smaller Companies Sub-fund Option applies, shares in the Japan 
Smaller Companies Sub-fund, will be issued at their respective net asset 
values on the Effective Date.

(b) Redemption of shares

Shareholders electing to redeem US Dollar Sub-fund Shares, under the 
Redemption Option, will receive a price equal to the net asset value per 
share on the business day following the Effective Date.

(c) Non-returns

Shareholders who do not duly complete and return the Form of Election by 
the date specified in the Circular, which is expected to be Saturday, 29th 
January 2000, will be deemed to have elected to receive Emerging Japan Sub-
fund Shares, or, if the Japan Smaller Companies Sub-fund Option applies, 
shares in the Japan Smaller Companies Sub-fund, in respect of all their 
holding of Ordinary Shares. 

(d) Implementation

The proposals are conditional, inter alia, on the passing by Shareholders 
of the resolutions to be proposed at the First and Second EGMs.  If the 
proposals are not approved by Shareholders, the Directors are committed to 
convene an extraordinary general meeting on or about 1st December, 2000 at 
which, in accordance with the Articles, an ordinary resolution will be 
proposed to place the Company in voluntary winding up.

(e) The Liquidators

Brendan McMahon and David Pirouet, both of PricewaterhouseCoopers, are the 
proposed liquidators of the Company.

Dealings and Settlement

Information on dealings and settlement for both the Company and Sub-funds 
will be set out in the Circular to be sent to Shareholders shortly.  The 
expected key dates are as follows:

Expected Key Dates:
                                             2000
Latest date for receipt of Forms of Election 
from Shareholders                            Saturday, 29th January

First Extraordinary General Meeting          Monday, 31st January

Second Extraordinary General Meeting         Friday, 10th March

Payments made under the Redemption Option    no later than Friday, 17th March


Shareholders' Meetings

(a) First Extraordinary General Meeting

The First Extraordinary General Meeting is expected to be held on Monday, 
31st January, 2000.  At this meeting, at which all Shareholders are 
encouraged to attend and vote, resolutions will be proposed to approve the 
Scheme, to make the necessary changes to the Articles and to authorise the 
implementation of the Scheme by the Liquidators.  The Scheme will not 
become effective until the passing of the resolutions to be proposed at the 
Second Extraordinary General Meeting.  To be passed, the resolutions will 
require the approval of at least two thirds of the votes cast by those 
Shareholders present in person or by proxy.

(b) Second Extraordinary General Meeting

The Second Extraordinary General Meeting is expected to be held on Friday, 
10th March, 2000.  At this meeting, at which all Shareholders may attend 
and vote, a further resolution will be proposed for the winding-up of the 
Company and the appointment of the Liquidators.  To be passed, the 
resolution will require the approval of at least two thirds of the votes 
cast by those Shareholders present in person or by proxy.


ING Barings, which is regulated in the UK by the Securities and Futures 
Authority, is acting only for Fidelity Japan OTC & Regional Markets Fund 
Limited in connection with these proposals and will not be responsible to 
anyone other than Fidelity Japan OTC & Regional Markets Fund Limited for 
providing the protections afforded to customers of ING Barings or for 
providing advice in relation to these proposals.



                         

a d v e r t i s e m e n t