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Premier Energy and Water Trust plc (the "Company")
Proposed Placing Programme, Publication of Circular and Notice of General Meeting
Premier Energy and Water Trust plc has today published a circular (the "Circular") in connection with the proposals to grant authority to allot up to 20 million ordinary shares of 1p each in the capital of the Company ("Ordinary Shares") on a non pre-emptive basis for the purposes of implementing a placing programme (the "Placing Programme" and the "Proposals").
A general meeting of the Company to consider and, if thought fit, approve the Proposals has been convened to be held at 2.45 p.m. on 19 April 2016 (or as soon as practicable following conclusion of the annual general meeting of the Company to be held at 2.30 p.m. on the same day) at the offices of Stephenson Harwood LLP, 1 Finsbury Circus, London EC2M 7SH ("General Meeting").
It is intended that, subject to the approval of certain resolutions contained in the Circular (as more fully described below), the Placing Programme will commence upon publication of a prospectus (the "Prospectus") on or around 20 April 2016. The Placing Programme will close exactly 12 months following publication of the Prospectus.
The Circular, which provides further details of the Placing Programme and includes a notice convening the General Meeting, is being posted to Shareholders today. A copy of the Circular has been submitted to the National Storage Mechanism and will shortly be available for inspection at www.morningstar.co.uk/uk/NSM. The Circular will also shortly be available on the Company's website at https://www.premierfunds.co.uk/investors/investments/investment-trusts/premier-energy-and-water-trust.
Expected Timetable
| Event | Time/date |
| Latest time and date for receipt of Forms of Proxy | 2.45 p.m. on 15 April 2016 |
| Latest time and date for transmission of CREST proxy instructions | 6.00 p.m. on 15 April 2016 |
| General Meeting | 2.45 p.m. on 19 April 2016 |
| Expected date of publication of Prospectus and commencement of Placing Programme | 20 April 2016 |
Notes:
- These times and dates are indicative only. If any of the above times and/or dates change, the revised times and/or dates will be notified to Shareholders by announcement through a Regulatory Information Service.
- All references to times are to times in London, England, unless otherwise stated.
Words and expressions that are defined in the Circular have the same meanings where they are used in this announcement, except where the context requires otherwise.
Enquiries:
| Premier Fund Managers Limited Nigel Sidebottom James Smith Claire Long | + 44 (0) 1483 30 60 90 |
| N+1 Singer James Maxwell Liz Yong Tom Smale | + 44 (0) 20 7496 3000 |
The following is a reproduction, without material adjustment, of the Chairman's Letter to Shareholders which is contained within the Circular:
Dear Shareholder,
1. Introduction
The Board announced today details of its proposals to enable the Company to issue Ordinary Shares pursuant to a placing programme of up to 20 million Ordinary Shares (the "Placing Programme").
The Placing Programme, if approved, will allow the Company to issue up to 20 million Ordinary Shares to investors without having to first offer them pro rata to existing Shareholders, being equivalent to approximately 110 per cent. of the issued Ordinary Share capital of the Company as at the date of the Circular.
Implementation of the Placing Programme requires the approval of Shareholders and is therefore conditional on the passing of certain of the Resolutions which will be proposed at a General Meeting to be held at 2.45 p.m. on 19 April 2016, or as soon as practicable following the conclusion of the Company's Annual General Meeting, notice of which you will have already received with the Company's annual report and accounts for the financial year ended 31 December 2015.
The purpose of the Circular is to provide Shareholders with details of the proposed Placing Programme and to set out the reasons why the Directors are recommending that Shareholders vote in favour of the Resolutions at the General Meeting.
2. Background to and reasons for the Placing Programme
As detailed in my Chairman's statement in the Company's 2015 Annual Report and Accounts, 2015 was a difficult year for the Company and stands in stark contrast to the strong gains made in 2013 and 2014. However, putting 2015 into context, following the management and portfolio changes in June 2012, performance has still been strong despite the recent weakness. From 31 May 2012 to 31 December 2015, a holder of Ordinary Shares has seen a total return of 76.2 per cent, an average compound return of 17.1 per cent. per year (Source: Bloomberg).
Notwithstanding the difficulties of 2015, the Board responded to market demand by issuing Ordinary Shares in May and July. As I noted in my Chairman's statement in the 2015 Annual Report and Accounts, the Board would consider issuing further Ordinary Shares in 2016 and beyond and believe that Shareholders would benefit from growing the Company in this way, which should allow for a more efficient cost base and improved trading liquidity.
The Placing Programme would also complement the placing programme of zero dividend preference shares issued by the Company's subsidiary, PEWT Securities 2020 ("ZDP Shares"). At the time of the scheme of reconstruction of PEWT Securities PLC in late 2015, and the election of a number of investors to rollover their investment in PEWT Securities plc into ZDP Shares issued by PEWT Securities 2020, PEWT Securities 2020 instigated the ZDP Placing Programme under which the board of PEWT Securities 2020 may issue up to approximately 56 million ZDP Shares until 19 November 2016 without needing to incur the costs of producing a further prospectus. Any new issue of ZDP Shares by PEWT Securities 2020 may only be made if:
- those ZDP Shares in issue immediately thereafter would have a cover of not less than 1.8 times; or
- those ZDP Shares in issue immediately thereafter would have a cover of not less than the cover of the ZDP Shares in issue immediately prior to the relevant calculation date.
The ZDP Placing Programme is being implemented to satisfy market demand and to enable the Group to raise additional capital as and when the directors of PEWT Securities 2020 consider appropriate. PEWT Securities 2020 will lend to the Company all of the proceeds of the ZDP Placing Programme, and the Board intends to use such proceeds to acquire investments in accordance with the Company's investment objective and policy.
By implementing both the Placing Programme and the ZDP Placing Programme, and giving the Directors the flexibility to issue Ordinary Shares and ZDP Shares at around the same time at prices so as to increase the NAV per Ordinary Share, the Board can seek to achieve a long term aim of growing the assets of the Company which should benefit Shareholders.
Having regard to the benefits of enlarging the Company, the Directors are seeking the necessary authorities to implement the Placing Programme. The Directors intend to use the authorities granted when they consider that it is the best interests of Shareholders to do so and to satisfy demand for the Ordinary Shares.
3. The Placing Programme
The Directors believe that the Placing Programme offers the following principal benefits to Shareholders:
- to raise additional monies in a timely manner to enable the Company to take advantage of opportunities to make further investments in accordance with the Company's investment policy;
- to increase the market capitalisation of the Company which should make the Ordinary Shares more attractive to a wider range of investors;
- it is expected that the secondary market liquidity in the Ordinary Shares will be increased as a result of a larger and more diversified shareholder base;
- to grow the Company, thereby spreading fixed costs over a larger capital base which should reduce the level of ongoing expenses per Ordinary Share; and
- to give the directors of PEWT Securities 2020 a greater opportunity to issue ZDP Shares, thereby growing the Company and providing the opportunity to enhance the yield to Ordinary Shareholders through the use of this form of this gearing.
It is intended that, subject to the approval of Resolutions 1 and 3 at the General Meeting, the Placing Programme will commence upon publication of a prospectus on or around 20 April 2016. The Placing Programme will close exactly 12 months following publication of the prospectus.
The Placing Programme will be flexible and may have a number of closing dates in order to provide the Company with the ability to issue Ordinary Shares over a period of time. The maximum number of Ordinary Shares to be issued pursuant to the Placing Programme is 20 million. Such Ordinary Shares will, subject to the Company's decision to proceed with an allotment at any given time, be issued at the Placing Programme Price as further described below.
Applications will be made to the UK Listing Authority and the London Stock Exchange for all the new Ordinary Shares to be issued pursuant to the Placing Programme to be admitted to the premium segment of the Official List of the UK Listing Authority and to trading on the London Stock Exchange's main market for listed securities (each, an "Admission"). All Ordinary Shares issued pursuant to the Placing Programme will be allotted conditionally on such Admission occurring.
The Ordinary Shares issued pursuant to the Placing Programme will rank pari passu with the Ordinary Shares then in issue (save for any dividends or other distributions declared, made or paid on the Ordinary Shares by reference to a record date prior to the allotment of the relevant new Ordinary Shares).
Placing Programme Price
Subject to the requirements of the Listing Rules, the price at which the new Ordinary Shares will be issued pursuant to the Placing Programme will be calculated by the Board as follows:
- for issuance of new Ordinary Shares only, the minimum Placing Programme Price will be the prevailing NAV per Ordinary Share together with a premium which will cover the commissions and expenses of the issue of new Ordinary Shares under the Placing Programme; and
- for issuance of new Ordinary Shares at or around the same time as the issue of ZDP Shares, and subject to all Resolutions being passed at the General Meeting, the minimum Placing Programme Price will be the aggregate of the Adjusted NAV per Ordinary Share and a premium to cover the commissions and expenses of the issue of new Ordinary Shares under the Placing Programme, where the "Adjusted NAV per Ordinary Share" is the discounted NAV per Ordinary Share which, when combined with a contemporaneous issue of ZDP Shares by PEWT Securities 2020 at a premium to the accrued capital entitlement per ZDP Share, still results in an increase to the NAV per Ordinary Share.
Fractions of Ordinary Shares will not be issued.
Where new Ordinary Shares are issued, the total assets of the Company will increase by that number of Ordinary Shares multiplied by the relevant Placing Programme Price less brokers' commission and expenses. The Board does not anticipate that issues of Ordinary Shares pursuant to the Placing Programme will have any material impact on the earnings and NAV per Ordinary Share.
4. Use of proceeds
The net proceeds of the Placing Programme, after providing for the Company's operational expenses, will be used to make investments in accordance with the Company's investment policy.
5. Issued Share capital
As at the latest practicable date prior to the publication of the Circular, there were 18,088,480 Ordinary Shares in issue. If 20 million Ordinary Shares (being the maximum number of Ordinary Shares available under the Placing Programme) were to be issued pursuant to the Placing Programme, there would be a dilution of approximately 58 per cent. in existing Shareholders' voting control of the Company.
6. General Meeting
The Proposals require the approval by Shareholders at the General Meeting which has been convened for 2.45 p.m. on 19 April 2016, or as soon as practicable following the conclusion of the Annual General Meeting.
The Resolutions that will be put to Shareholders at the General Meeting are to:
- authorise the allotment of up to 20 million Ordinary Shares (representing approximately 110 per cent. of the Company's issued Ordinary Share capital (excluding Ordinary Shares held in treasury, if any) as at the latest practicable date prior to the publication of the Circular). This authority shall be in addition to any allotment authority granted to the Board by Shareholders at the Annual General Meeting (Resolution 1);
- allow the Board to allot Ordinary Shares at a discount to the then prevailing NAV per Ordinary Share. The Board will only use this authority to issue new Ordinary Shares provided that the combined effect of the issue of both Ordinary Shares at a discount to NAV per Ordinary Share and the issue of ZDP Shares by PEWT Securities 2020 at a premium to the accrued capital entitlement per ZDP Share, at or around the time of the Ordinary Share issue, is that the NAV per Ordinary Share is increased (Resolution 2); and
- disapply statutory pre-emption rights otherwise applicable to the allotment of up to 20 million Ordinary Shares for cash such that new Ordinary Shares do not first have to be offered to Shareholders in proportion to their holdings of Ordinary Shares (Resolution 3).
The Placing Programme is conditional on the approval by Shareholders of Resolution 1 and Resolution 3 to be proposed at the General Meeting. If Resolution 2 is not passed, the Placing Programme will still proceed although the Board will have reduced flexibility in respect of the price that it may issue Ordinary Shares pursuant to the Placing Programme when undertaking such issuance alongside a contemporaneous issue of ZDP Shares by PEWT Securities 2020.
The authority conferred by the Resolutions, if passed, will lapse on 30 April 2017.
Resolutions 1 and 2 will be proposed as ordinary resolutions. An ordinary resolution requires a majority of members entitled to vote and present in person or by proxy to vote in favour in order for it to be passed.
Resolution 3 will be proposed as a special resolution. 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.
In accordance with the Articles, all Shareholders entitled to vote and present in person or by proxy at the General Meeting shall upon a show of hands have one vote and upon a poll shall have one vote in respect of each Ordinary Share held. In order to ensure that a quorum is present at the General Meeting, it is necessary for two or more Shareholders to be present in person or by proxy (or, if a corporation, by representative).
The formal notice convening the General Meeting is set out on pages 10 to 11 of the Circular.
7. Action to be taken
Shareholders will find enclosed with the Circular a personalised Form of Proxy for use at the General Meeting.
Shareholders are asked to complete and return the Form of Proxy in accordance with the instructions printed thereon to the Company's Registrar, Capita Asset Services at PXS1, 34 Beckenham Road, Beckenham, Kent, BR3 4ZF or (during normal business hours only) by hand at the offices of the Company's registrars, Capita Asset Services, The Registry, 34 Beckenham Road, Beckenham, Kent, BR3 4TU no later than 2.45 p.m. on Friday, 15 April 2016.
Shareholders are requested to complete and return a Form of Proxy whether or not they wish to attend the General Meeting. The return of a Form of Proxy will not prevent Shareholders from attending the General Meeting and voting in person should they so wish.
8. Consent
N+1 Singer has given and not withdrawn its written consent to the issue of the Circular with the inclusion in it of references to its name in the form and context in which they appear.
9. Recommendation
The Board considers that the passing of the Resolutions is in the best interests of the Company and its Shareholders as a whole. Accordingly the Board unanimously recommends that Shareholders vote in favour of the Resolutions to be proposed at the General Meeting.
The Directors intend to vote in favour of the Resolutions in respect of their holdings of Ordinary Shares amounting to 258,816 Ordinary Shares in aggregate (representing approximately 1.43 per cent. of the issued share capital of the Company as at the date of the Circular).
Yours faithfully
Geoffrey Burns
Chairman
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