Publication of Scheme Circular

23 February 2018 

UTILICO EMERGING MARKETS LIMITED

(LEI Number: 213800UYZLSYB84N2H09)

 

Re-domiciliation of the Company to the United Kingdom

 

Further to the announcement by the Board on 14 February 2018 in relation to the proposed re-domiciliation of the Company to the United Kingdom, the Company has today published documentation for shareholders containing further details.

The proposal to re-domicile the Company is by way of a scheme of arrangement under section 99 of the Companies Act 1981 of Bermuda (the "Scheme") under which ordinary shareholders will exchange all their ordinary shares, on a one for one basis, for ordinary shares in Utilico Emerging Markets Trust plc ("UEM Trust"), a newly incorporated closed ended investment trust established in the United Kingdom.

A copy of the circular containing details of the Scheme, an explanatory statement explaining the effect of the Scheme and the notice of the court ordered meeting (the "Circular"), together with the prospectus also published today by UEM Trust, is being posted today to shareholders of the Company other than shareholders in restricted jurisdictions.

A copy of the Circular and the UEM Trust Prospectus will be submitted to the National Storage Mechanism and will shortly be available for inspection at: www.morningstar.co.uk/uk/NSM and on the Company's website: www.uem.limited.

Terms used and not defined in this announcement bear the meaning given to them in the Circular.

The directors of the Company expect the re-domiciliation to benefit current and future shareholders through:

·    Taking advantage of the UK investment trust structure and flexibility

·    Increasing marketing appeal  

·    Providing greater tax efficiency

·    Streamlining the electronic ownership of shares

·    Providing shareholders with enhanced rights via UK takeover and corporate law.

UEM Trust will continue to be managed in the same way with the same investment objective and the same investment policy and the existing dividend policy will remain unchanged, with the intention to grow the dividends progressively.

John Rennocks, Chairman, said: "Since the launch of the Company in 2005 there have been a number of positive developments in the UK investment trust rules and requirements, particularly in relation to investment flexibility. UK investment trusts have become the gold standard for a closed end structure and the Directors believe that redomiciling the Company's business and operations is likely to increase its marketing appeal. Since inception in June 2005, UEM has produced a NAV total return of 314%, against 248% from the MSCI Emerging Markets Index, whilst delivering an attractive yield, and we hope that this move will increase recognition of the positive characteristics of this trust."

The full text of the Chairman's statement and the timetable contained in the Circular is as set out below:

LETTER FROM THE CHAIRMAN

Utilico Emerging Markets Limited

(Incorporated in Bermuda under the Companies Act 1981, as amended, with company number 36941)

Directors:                                                                                                   Registered Office:

John Rennocks (Chairman)                                                                       34 Bermudiana Road

Susan Hansen                                                                                           Hamilton HM11

Garry Madeiros OBE                                                                                 Bermuda

Garth Milne

Anthony Muh

 

                                                                                                                  23 February 2018

To holders of Ordinary Shares and Depositary Interests, and, for information only, Subscription Shares

Recommended proposals for the reorganisation of UEM Bermuda in order to effect its re-domiciliation to the United Kingdom pursuant to a scheme of arrangement under
section 99 of the Companies Act 1981 of Bermuda

and

Notice of Special Court-Ordered Scheme Meeting

Introduction

On 14 February 2018 your Board announced proposals to re-domicile UEM Bermuda to the United Kingdom. It is intended that the proposed re-domiciliation will be effected by implementing the Reorganisation Proposal pursuant to a scheme of arrangement under section 99 of the Bermuda Companies Act (the Scheme).

Implementation of the Scheme is conditional, among other things, on the passing, by the requisite majorities, of the resolution (the Scheme Resolution) to be proposed at the special court-ordered scheme meeting of the Ordinary Shareholders (the Scheme Meeting) to be held on 20 March 2018, notice of which is set out at the end of this document. 

The purpose of this document is to set out the background to and reasons for the Reorganisation Proposal, and explain why your Board considers the Reorganisation Proposal to be in the best interests of the Company and Shareholders as a whole and why your Board recommends that you vote in favour of the Scheme Resolution.

Subject to satisfaction of all the conditions to the Scheme (other than Admission), the Scheme is expected to become effective on 28 March 2018 and, subject to Admission, the Scheme will be implemented, and dealings in the UEM Trust Shares are expected to commence, on 3 April 2018.

Background to and reasons for the Reorganisation Proposal

The Company is an exempted, closed ended Bermuda incorporated investment company that was incorporated on 9 June 2005. Its ordinary shares are admitted to the premium listing segment of the Official List and to trading on the London Stock Exchange's main market for listed securities.

The Net Asset Value performance of the Company and, for comparison purposes, the MSCI Emerging Markets Index (GBP adjusted), from the Company's inception in June 2005 to 31 January 2018 is set out in the table below:

	6 months (%)	1 year (%)	3 years (%)	5 years (%)	Inception (%)
Company - total return	4.9	17.9	39.5	65.3	313.9
MSCI Emerging Markets index (GBP adjusted) - total return	10.2	25.0	48.1	48.0	245.5

Source: Company, Datastream and MSCI

 

Since the launch of the Company in 2005 there have been a number of positive developments in the UK investment trust rules and requirements, particularly in relation to investment flexibility.  In light of the recognition of UK investment trusts as an attractive structure with an established long track record of spreading investment risk, the Directors believe that redomiciling the Company's business and operations to the United Kingdom is likely to increase its marketing appeal.  Furthermore, where shareholders wish to hold shares electronically, a UK investment trust will avoid the need to have the complexity of a share structure involving depositary interests. 

In addition to the marketing benefits of redomiciling the Company to the UK, as a UK incorporated and tax resident company, UEM Trust should be able to benefit from the United Kingdom's extensive network of double tax treaties.  The Directors are also aware of the developments over the life of the Company in the approach taken by some countries to the taxation of capital gains of certain offshore based investors, including Bermuda.  The Company has historically suffered a very low or insignificant charge to overseas capital gains tax, but in recent years such charge has become material and had the Company been incorporated in the United Kingdom and approved by HMRC as an investment trust, the material taxation charges reported in recent years would have been reduced substantially.

 

The Scheme

The Reorganisation Proposal will be implemented by way of a scheme of arrangement pursuant to section 99 of the Bermuda Companies Act.  Upon the implementation of the Scheme:

·           Ordinary Shareholders will exchange all their Ordinary Shares for UEM Trust Shares on the basis of one UEM Trust Share for every Ordinary Share held as at the Scheme Record Date (including any Ordinary Shares issued prior to the Scheme Record Date upon the exercise of the Subscription Share Rights attaching to the issued and outstanding Subscription Shares (whether by the relevant Subscription Shareholders on 28 February 2018 or thereafter by the Final Subscription Trustee)). UEM Trust Shares issued pursuant to the Scheme will be admitted to the premium listing segment of the Official List and to trading on the London Stock Exchange's main market for listed securities. The existing listing of the Company's shares will be cancelled at the same time; and

·           the Company will become a wholly-owned subsidiary of UEM Trust, a newly incorporated closed ended investment trust established in the United Kingdom. As a result UEM Trust will indirectly acquire all of the Company's assets and liabilities (including its investment portfolio) as at the date of Admission. UEM Trust will carry on the business and operations of the Company and will have the same investment objective and the same investment policy as the Company. 

 

Accordingly, as a result of the Scheme, Ordinary Shareholders will cease to hold any shares in the Company and (other than certain Overseas Shareholders) in place of their holdings of the Company's Ordinary Shares will instead hold the same number of UEM Trust Shares, with UEM Trust acting as the successor vehicle of the Company.

Set out below are the simplified structures of the UEM Group: (a) as at the date of this document and as expected to be immediately before completion of the Reorganisation Proposal; and (b) as expected to be immediately following completion of the Reorganisation Proposal respectively. 

 

As at the date of this document and as expected to be immediately before completion of the Reorganisation Proposal

[See structure chart in circular]

 

As expected to be immediately following completion of the Reorganisation Proposal

[See structure chart in circular]

 

It is intended that, as soon as reasonably practicable following implementation of the Scheme, all the Company's assets will be distributed in specie to UEM Trust, either through the liquidation of the Company or in consideration for the buy-back of the Company's Ordinary Shares from UEM Trust.

Conditions of the Scheme 

Implementation of the Scheme is conditional on:

·        the Scheme being approved by a majority in number representing not less than three-fourths in value of the Ordinary Shareholders present and voting in person or by proxy at the Scheme Meeting;

·        the Scheme, with or without modification, being sanctioned by the Court;

·        the Directors of the Company not resolving to abandon the Scheme prior to the order of the Court sanctioning the Scheme under section 99(3) of the Bermuda Companies Act being delivered to the Registrar of Companies in Bermuda for registration. The Directors have discretion to determine that the Scheme should no longer proceed if they consider that it is no longer in the best interests of the Company and Shareholders as a whole;

·        a copy of the Court order being delivered to the Registrar of Companies in Bermuda for registration; and

·        Admission of the UEM Trust Shares to be issued pursuant to the Scheme.

The Scheme will become effective, as a matter of Bermuda law, as soon as a copy of the order of the Court sanctioning the Scheme has been delivered to the Registrar of Companies in Bermuda as required by section 99(3) of the Bermuda Companies Act.  However, the Scheme will only be implemented upon Admission of the UEM Trust Shares to be issued pursuant to the Scheme, at which time the UEM Trust Shares will be unconditionally allotted and issued to Shareholders in accordance with the Scheme and the Company will become a wholly-owned subsidiary of UEM Trust.

If the Scheme does not become effective or Admission does not occur by 30 April 2018, the Reorganisation Proposal will not proceed and Shareholders will continue to hold Ordinary Shares in the Company. 

UEM Trust

UEM Trust is a newly established public limited company incorporated in England and Wales on 7 December 2017 with registered number 11102129.  UEM Trust is registered as an investment company under section 833 UK Companies Act and intends to carry on its business at all times so that it qualifies for approval as an investment trust in accordance with section 1158 of the Corporation Tax Act 2010 (as amended).  The registered address of UEM Trust is The Cottage, Ridgecourt, The Ridge, Epsom, Surrey KT18 7EP.

UEM Trust has been established for the specific purpose of carrying on the existing business and operations of the Company upon the Scheme becoming effective and implemented in accordance with its terms and Ordinary Shareholders should note the following:

·    UEM Trust will have the same investment objective and the same investment policy as the Company;

·    UEM Trust's Board will be identical to the Company's Board, with John Rennocks continuing to act as Chairman. There are no agreements or arrangements under which the remuneration and benefits or terms of service of any Director will be changed as a result of implementation of the Scheme;

·    the Company's existing management agreement will be novated to UEM Trust so that ICMIM will act as the alternative investment fund manager of UEM Trust, with sole responsibility for risk management, and ICMIM and ICM will act as joint portfolio managers of UEM Trust on the same terms as the existing management agreement (including as to the amount of management and performance fees payable to the Joint Portfolio Managers);

·    the administrator of UEM Trust will be JPMorgan Chase Bank N.A. - London Branch in place of F&C Management Limited which currently acts as administrator to the Company. Additional administrative support services will be procured by ICMIM, at the cost of the Company, from Waverton Investment Management Limited;

·    UEM Trust's ongoing charges are not expected to change materially and are therefore expected to be in line with the ongoing charges of the Company;

·    UEM Trust intends to pursue the Company's dividend policy with the intention to grow progressively the dividends which have been paid by the Company, although there is no guarantee of any particular level of profits or returns being achieved by UEM Trust in the future;

·    consistent with the Company's existing continuation arrangements, UEM Trust will have an indefinite life and a continuation vote will be proposed at UEM Trust's annual general meeting to be held in 2021 and at every fifth annual general meeting thereafter;

 

·    the UK tax treatment on receipt of dividends or gains on a disposal of UEM Trust Shares for a UK tax resident Shareholder who holds their shares as an investment will be the same as the tax position on dividends and capital gains received in respect of the Company; and

 

·    Ordinary Shareholders (other than certain Overseas Shareholders) will hold the same proportionate interests in UEM Trust as they hold in the Company as at the Scheme Record Date.

Legal, regulatory and tax impact of the Reorganisation Proposal

There are number of legal, regulatory and tax consequences resulting from UEM Trust being incorporated in the United Kingdom as compared to the Company which is incorporated in Bermuda.  The most material differences are:

-        as a public company incorporated in the United Kingdom, UEM Trust will be subject to the UK City Code on Takeovers and Mergers, including the requirement for a mandatory bid to be made for the UEM Trust Shares in the circumstances described in paragraph 5.1 of Part VII of the accompanying UEM Trust Prospectus;

-        as a company incorporated under the UK Companies Act:

-        UEM Trust will be subject to statutory pre-emption rights which apply on certain issues of new shares for cash unless dis-applied by a special resolution of UEM Trust Shareholders; and

-        compulsory acquisition rights will apply if an offeror for UEM Trust acquires or contracts to acquire not less than 90 per cent. of the UEM Trust Shares (in value and by voting rights) to which such offer relates, as described in paragraph 5.2 of Part VII of the UEM Trust Prospectus;

-        the Company's Ordinary Shares cannot be admitted as participating securities in CREST and instead Shareholders wishing to hold their Ordinary Shares in uncertificated form through CREST must do so in the form of Depositary Interests.  In contrast, UEM Trust Shares may be held in uncertificated form directly through the CREST system and it will not be necessary for such shares to be held in the form of Depositary Interests;

-        as the UEM Trust Shares will be admitted to the premium listing segment of the Official List and to trading on the main market for listed securities of the London Stock Exchange UEM Trust will be subject to the Listing Rules, the Disclosure Guidance and Transparency Rules and the Market Abuse Regulation which also apply to the Company.  However, as UEM Trust is incorporated in the United Kingdom, unlike the Company, it will not be categorised as a "non-UK issuer" for the purposes of the Disclosure Guidance and Transparency Rules and the application of the relevant rules to UEM Trust will reflect this;

-        the Company is categorised as a non-EU alternative investment fund (AIF) managed by an EU alternative investment fund manager (AIFM) for the purposes of the AIFM Directive, whereas UEM Trust will be categorised as an EU AIF managed by an EU AIFM.  In addition to enabling UEM Trust to take advantage of the EU marketing passport which applies to EU AIFs managed by EU AIFMs (at least for so long as the United Kingdom remains within the EEA), the principal consequence of this change in categorisation is that J.P. Morgan Europe Limited, as UEM Trust's depositary, will provide its services on the basis that UEM Trust is within the full scope of the AIFM Directive and not on a "depo-lite" basis as currently permitted in the case of the Company;

-        as a UK incorporated and tax resident company, UEM Trust should be able to benefit from the United Kingdom's extensive network of double tax treaties;

-        in order to maintain its approval as an investment trust, UEM Trust will need to distribute at least 85 per cent. of its distributable income earned in each financial year by way of dividends; and

-        transfers of the Company's Ordinary Shares and of Depositary Interests in respect of the Company's Ordinary Shares within CREST are not liable to UK stamp duty/SDRT unless the instrument of transfer is executed within the UK or the Ordinary Shares are registered in a register of the Company kept in the UK. In contrast, any transfer of UEM Trust Shares will be liable to ad valorem stamp duty at the rate of 0.5 per cent (rounded up to the nearest £5) or (if an unconditional agreement to transfer the UEM Trust Shares is not completed by a duly stamped transfer) SDRT at the rate of 0.5 per cent of the consideration paid. Paperless transfers of UEM Trust Shares within CREST will liable to SDRT (usually at the rate of 0.5 per cent of the consideration paid) rather than stamp duty. Such SDRT is reported through the CREST system and is collected by CREST.

Illustrative financial effects of the Scheme

For illustrative purpose only, had both the Scheme Effective Date and the date of Admission been 21 February 2018 (being the latest practicable date prior to the publication of this document) but assuming that all the Subscription Share Rights attaching to the issued and outstanding Subscription Shares have been exercised prior to that date, the Directors estimate that:

·    the Net Asset Value of UEM Trust would be £605.2 million; and

·    the Net Asset Value per UEM Trust Share would be 252.93 pence.

Therefore, had both the Scheme Effective Date and the date of Admission been 21 February 2018 (being the latest practicable date prior to the publication of this document), for every 1,000 Ordinary Shares held on the Scheme Record Date, an Ordinary Shareholder (other than certain Overseas Shareholders) would receive 1,000 UEM Trust Shares, with a Net Asset Value per UEM Trust Share of 252.93 pence and a total value on the Scheme Effective Date and the date of Admission of £2529.29.

In addition, provisions for capital gains taxation which are not expected to be payable due to UEM Trust complying with the requirements of the UK investment trust regime would also be written back.  The impact on Net Asset Value of UEM Trust and Net Asset Value per UEM Trust Share will be dependent on the valuations of individual securities at that time.

The above illustration is based on the following figures and estimates: the Net Asset Value of the Company as at 21 February 2018 (being the latest practicable date prior to the publication of this document) of £553.4 million; the assumed receipt by the Company of approximately £52.8 million upon the exercise of all the Subscription Share Rights attaching to the issued and outstanding Subscription Shares; the anticipated costs of the Reorganisation Proposal estimated at approximately £0.4 million (plus applicable VAT) (which have not yet been reflected in the Company's Net Asset Value); and a total of 239,271,920 Ordinary Shares in issue (which includes the maximum number of Ordinary Shares which will be issued if all the outstanding Subscription Share Rights are exercised).

The above figures are provided for illustrative purposes only and do not represent forecasts.  The Net Asset Value of a UEM Trust Share as at the date of Admission may be materially different from the illustrative figures set out above as a result of, inter alia, changes in the value of the Company's investments and the number of new Ordinary Shares (if any) issued upon the exercise of the outstanding Subscription Share Rights.

Subscription Shares

Shareholders will not be entitled to vote on, or participate in, the Scheme in respect of their holdings of Subscription Shares as the final date on which any outstanding Subscription Share Rights can be exercised by Subscription Shareholders is 28 February 2018 (the Final Subscription Date). However, holders of any Ordinary Shares issued upon the exercise of the outstanding Subscription Share Rights (whether by the relevant Subscription Shareholders on 28 February 2018 or thereafter by the Final Subscription Trustee, as described below) will be able to vote at the Scheme Meeting and will participate in the Scheme on the same basis as existing Ordinary Shareholders.

In accordance with the terms and conditions on which the Subscription Shares were issued, the Company shall appoint a trustee (the Final Subscription Trustee) within seven days of the Final Subscription Date. 

If, in the opinion of the Final Subscription Trustee, the net proceeds of sale after deduction of all costs and expenses incurred by, including any fee payable to, the Final Subscription Trustee will exceed the costs of exercising the issued and outstanding Subscription Share Rights, the Final Subscription Trustee shall within 14 days following the Final Subscription Date exercise all (or such proportion as it may in its absolute discretion determine) of the Subscription Share Rights which have not been exercised on the same terms as they could have been exercised by the relevant Subscription Shareholders on the Final Subscription Date and sell the Ordinary Shares resulting from such exercise in the market.  The Final Subscription Trustee will distribute the net proceeds of any such sale (after deduction of the costs and expenses) to the relevant Subscription Shareholders at the risk of such persons within 56 days of the Final Subscription Date, provided that entitlements of under £5.00 per Subscription Shareholder shall be retained for the benefit of the Company.

The subscription price payable on the exercise of each Subscription Share Right is 183 pence. Given that as at 21 February 2018 (being the latest practicable date prior to the issue of this document) the closing price of an Ordinary Share was 218.00 pence, the Directors currently anticipate that the Final Subscription Trustee is likely to exercise all outstanding Subscription Share Rights and sell the Ordinary Shares arising on such exercise in the market. Assuming that all the outstanding Subscription Share Rights are exercised (whether by the relevant Subscription Shareholders or by the Final Subscription Trustee) an additional 28,865,465 Ordinary Shares will be allotted and issued prior to the Scheme Effective Date.  The Company intends to use its reasonable endeavours to procure that all Ordinary Shares issued upon the exercise of the issued and outstanding Subscription Share Rights (whether by the relevant Subscription Shareholders on 28 February 2018 or thereafter by the Final Subscription Trustee) will be issued prior to the Scheme Meeting Record Date, so that the holders of the relevant Ordinary Shares will be entitled to vote at the Scheme Meeting.

The Chairman of the Scheme Meeting will confirm the additional number of Ordinary Shares that have been issued and paid up credited as fully paid at or prior to the Scheme Meeting and the Scheme will be amended at Recital (E) accordingly.

Dividends

The Directors have declared a third quarterly interim dividend of 1.80p per Ordinary Share in respect of the year ending 31 March 2018, which will be paid on 1 March 2018 to Ordinary Shareholders on the register on 16 February 2018.

As set out in the Company's half yearly report for the six month period ended 30 September 2017, in the absence of unforeseen circumstances, the Directors intended to declare a dividend for the fourth quarter of the year ending 31 March 2018 of 1.80p per Ordinary Share. This dividend would typically have been paid in June 2018.  However, in light of the Reorganisation Proposal and the expected timeframe for UEM Trust to complete a proposed capital reduction which will create a distributable reserve, the Directors have decided to bring the payment of that dividend forward and today declared a fourth quarterly interim dividend of 1.80p per Ordinary Share in respect of the year ending 31 March 2018. This fourth quarterly interim dividend will be paid on 13 April 2018 to Ordinary Shareholders on the register on 23 March 2018.  Accordingly, it is expected that the dividend for the first quarter of the year ending 31 March 2019 will be declared by the UEM Trust Directors in August 2018 for payment in September 2018.    

Borrowings

The Company's £50m secured multicurrency revolving bank facility with Scotiabank Europe plc is due for repayment on 27 April 2018.  As at 21 February 2018 (being the latest practicable date prior to the publication of this document), £47.6 million was drawn down under the facility in US Dollars and Euros.  It is intended that this facility will be repaid in full prior to the Scheme Effective Date using the proceeds from the final exercise of the issued and outstanding Subscription Share Rights.

UEM Trust has received credit approval from Scotiabank Europe plc for a new 3 year £50m unsecured multicurrency revolving bank facility which it is expected will be entered into either on or within a short period following Admission of the UEM Trust Shares issued pursuant to the Scheme.

Costs of the Reorganisation Proposal

The total costs of implementing the Reorganisation Proposal are expected to be approximately £1.0 million (plus applicable VAT), of which it is expected that approximately £0.4 million will be paid by the Company and the balance (plus applicable VAT) will be paid by UEM Trust.

Announcements

It is expected that the Company will make an announcement through an RIS setting out the result of the Scheme Meeting shortly after the conclusion of the Scheme Meeting (or any adjournment thereof) on 20 March 2018.

The Company will also make an announcement through an RIS stating whether or not the Scheme has been sanctioned by the Court and, if applicable, the Scheme Effective Date, the expected date of Admission and the total number of UEM Trust Shares to be issued pursuant to the Scheme, on or around 29 March 2018 and in any event prior to Admission.

Overseas Shareholders

The terms of the Scheme, as they relate to Overseas Shareholders, may be affected by the laws of the relevant jurisdiction. Overseas Shareholders should inform themselves about and observe any applicable legal requirements.  Restricted Shareholders will not receive the UEM Trust Prospectus. 

Taxation

If you are in any doubt as to your tax position, or you may be subject to taxation in a jurisdiction other than the United Kingdom, you are recommended to seek immediately your own personal tax advice from an independent professional adviser.

Scheme Meeting

In accordance with the direction of the Court, the Scheme Meeting has been convened for 10.00 a.m. (Bermuda time) on 20 March 2018 for the purpose of considering and, if thought fit, passing a resolution to approve the Scheme (with or without modification).

The notice convening the Scheme Meeting and the resolution to be put to the Scheme Meeting is set out at the end of this document and is also described in Part II of this document in the section headed "The Scheme Meeting".  The Scheme Meeting will be held at Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda.

As far as the Company is aware, having made all reasonable enquiries, no Ordinary Shareholders are materially interested in the transactions contemplated under the Scheme and therefore, no Ordinary Shareholders are required to abstain from voting at the Scheme Meeting under the relevant laws, rules and regulations.

The Scheme Resolution will require the approval of a majority in number representing not less than three-fourths in value of the Ordinary Shareholders present and voting in person or by proxy at the Scheme Meeting.

If the Scheme Resolution is approved by the requisite majorities, the Company will apply to the Court by a petition seeking the Court's sanction for the Scheme.  Persons who object to the order being made may appear and be heard at the hearing of the petition.

Consequences of the Scheme not proceeding

The action necessary to make the Scheme become effective and/or to implement the Scheme will not be taken unless the Directors are satisfied that the Scheme has been duly approved by Ordinary Shareholders and sanctioned by the Court.

Under Bermuda law, the Directors may terminate or abandon the Scheme at any time prior to the Sanction Hearing. The Directors may also terminate or abandon the Scheme if the conditions to the Scheme (including Admission) are not satisfied or waived.

It is a condition of the Scheme that the Directors have not resolved to abandon the Scheme prior to a copy of the order sanctioning the Scheme being delivered to the Registrar of Companies in Bermuda for registration and the Directors have discretion to determine that the Scheme should no longer proceed if they consider that it is no longer in the best interests of the Company and Shareholders as a whole. 

If all the conditions to the Scheme (including Admission) are not satisfied by 30 April 2018, the Scheme and the Reorganisation Proposal will not be implemented and Shareholders will continue to hold their Ordinary Shares in the Company.

Action to be taken

Before taking any action, Ordinary Shareholders are recommended to read the further information set out in this document and the accompanying UEM Trust Prospectus.

Shareholders should note that they will be bound by the outcome of the Scheme Meeting whether or not they complete a Form of Proxy or Form of Instruction and/or attend the Scheme Meeting in person.

Shareholders who hold Ordinary Shares in certificated form

Shareholders who hold their Ordinary Shares in certificated form will find enclosed with this document a Form of Proxy for use in relation to the Scheme Meeting.  Whether or not you intend to be present at the Scheme Meeting, Shareholders who hold their Ordinary Shares in certificated form are urged to complete and return the Form of Proxy so as to be received by the Company's Registrars, Computershare Investor Services (Bermuda) Limited, c/o The Pavilions, Bridgwater Road, Bristol BS99 6ZY, by not later than 1.00 p.m. (London time) on 16 March 2018.

Submitting a Form of Proxy will not preclude an Ordinary Shareholder from attending the Scheme Meeting and voting in person should they so wish.  In such event, the returned Form of Proxy will be deemed to have been revoked.

Shareholders who hold Ordinary Shares through Depositary Interests

Shareholders who hold their Ordinary Shares through Depositary Interests in uncertificated form will find enclosed a Form of Instruction for use at the Scheme Meeting to instruct the DI Depositary how to vote on their behalf.  Such Shareholders are urged to complete and return the Form of Instruction so as to be received by the Company's DI Depositary, Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS99 6ZY by not later than 4.00 p.m. (London time) on 15 March 2018.

For Depositary Interest holders to give an instruction via the CREST system, CREST messages must be received by the issuer's agent (ID number 3RA50) by not later than 4.00 p.m. (London time) on 15 March 2018.  For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp generated by the CREST system) from which the issuer's agent is able to retrieve the message.  The Company may treat as invalid an appointment sent by CREST in the circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities Regulations 2001.

Recommendation

The Board considers the Reorganisation Proposal and Scheme to be in the best interests of the Company and Shareholders as a whole.  Accordingly, the Board unanimously recommends Shareholders vote in favour of the Scheme Resolution to be proposed at the Scheme Meeting and that they complete and return their Forms of Proxy and/or Forms of Instruction accordingly, whether or not they intend to attend the Scheme Meeting.

The Directors intend to vote in favour of the Scheme Resolution in respect of their beneficial holdings amounting in aggregate to 1,227,870 Ordinary Shares representing 0.6 per cent of the total voting rights attaching to the Ordinary Shares as at the date of this document.

If you are in any doubt as to the action you should take, you are recommended immediately to seek your own personal financial advice from your stockbroker, solicitor, accountant, bank manager or an appropriately qualified independent adviser authorised under the Financial Services and Markets Act 2000 (FSMA) if you are in the United Kingdom, or from another appropriately authorised independent financial adviser if you are outside the United Kingdom.

 

Yours sincerely

 

 

John Rennocks
(Chairman)

 

Expected Timetable

	2018
Publication of this document and the UEM Trust Prospectus	23 February
Final Subscription Date	28 February
Latest time and date for receipt of Forms of Instruction from holders of Depositary Interests in respect of the Scheme Meeting	4.00 p.m. on 15 March
Latest time and date for receipt of Forms of Proxy from Shareholders in respect of the Scheme Meeting	1.00 p.m. on 16 March
Scheme Meeting Record Date	6.00 p.m. on 16 March
Scheme Meeting	10.00 a.m. (Bermuda time) on 20 March
Scheme Record Date	6.00 p.m. on 27 March
Suspension of Ordinary Shares	7.30 a.m. on 28 March
Court hearing to sanction the Scheme	28 March
Scheme Effective Date	28 March
Listing hearing to consider the applications for Admission of the UEM Trust Shares	29 March
Date on which the Scheme is implemented and Admission and unconditional dealings in UEM Trust Shares commence	3 April
Crediting of CREST accounts in respect of the UEM Trust Shares issued pursuant to the Scheme	3 April
Share certificates in respect of UEM Trust Shares issued in certificated form despatched by post	the week commencing 2 April or as soon as practicable thereafter

 

Notes:

1)    Unless otherwise stated, all references to times in this document are to London times.

2)    All times and dates in the Expected Timetable and in this document (where permitted by law) may be subject to adjustment.  Any changes to the Expected Timetable set out above will be notified through an RIS.

Name of contact and telephone number for enquiries:

ICM Investment Management Limited                      

Charles Jillings / Alastair Moreton                                                           01372 271486

Montfort Communications

Gay Collins / Mike Foster                                                                         07798 626282

[email protected]