REG - Down MicroCap InvTst - Publication of a circular for a General Meeting

Downing Strategic Micro-Cap Investment TrustAnnouncement

08/03/2024 08:45

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RNS Number : 1509G  Downing Strategic Micro-Cap IT PLC  08 March 2024

8 March 2024
 

Downing Strategic Micro-Cap Investment Trust plc

 LEI Number: 213800QMYPUW4POFFX69

Publication of a circular for a General Meeting

 

Proposed B Share Scheme

Downing Strategic Micro-Cap Investment Trust plc (LSE: DSM) (the "Company) is
pleased to announce details of its proposals which seek to return 100 per
cent. of Shareholders' capital in cash to Shareholders through a compulsory
procedure involving a bonus issue, on a pro rata basis, of B Shares to all
Shareholders followed by the redemption of such B Shares.  The Board believe
that this mechanism treats all Shareholders fairly and allows capital losses
and any gains to be treated efficiently, within this current tax year.

The introduction of the B Share Scheme requires Shareholder approval, at a
general meeting of the Company to be held at the offices of Dickson Minto,
Dashwood House, 69 Old Broad Street, London EC2M 1QS at 2.00 p.m. on 3 April
2024 (the "General Meeting"). Subject to the Resolutions being passed at the
General Meeting, the B Share Scheme will provide the Company with the ability
to return cash to Shareholders at such time or times as the Board may, at its
absolute discretion, determine. B Shares would be issued to Shareholders (at
no cost to Shareholders) pro rata to their holdings of Ordinary Shares at the
time of issue of the B Shares and, shortly thereafter, redeemed and cancelled
in accordance with their terms for an amount not exceeding the amount treated
as paid up on the issue of the B Shares.

A circular containing further detail of the proposed B Share Scheme and the
notice convening the General Meeting has today been published by the Company
(the "Circular"). A copy of the Circular will be submitted to the National
Storage Mechanism and will shortly be available for inspection at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism) . The Circular will
also be available on the Company's website
(https://www.downingstrategic.co.uk/ (https://www.downingstrategic.co.uk/) ).

Proposed return of capital

Subject to the passing of the Resolutions at the General Meeting, the Board
intends to return, in aggregate, a minimum of approximately £10 million to
Shareholders via an initial issue and redemption of B Shares. B Shares of
£1.00 each will be paid up from the Company's reserves and issued to all
Shareholders by way of a bonus issue pro rata to their holdings of Ordinary
Shares, currently expected to be on the basis of one B Share for every 5
Ordinary Shares held at the Record Date of 6.00 p.m. on 3 April 2024. The B
Shares will be issued on 4 April 2024 and immediately redeemed at £1.00 per B
Share. The Redemption Date in respect of this Return of Capital will be 4
April 2024.  It is expected that the proceeds from the redemption of the B
Shares, which is equivalent to approximately 21.5 pence per Ordinary Share
(based on the current issued ordinary share capital of the Company), will be
sent to Shareholders through CREST (in respect of uncertificated Shareholders)
or via cheque (in respect of certificated Shareholders) by 9 April 2024.

The proposed initial Return of Capital represents approximately 33 per cent.
of the Company's Net Asset Value as at 6 March 2024, being the latest
published unaudited Net Asset Value prior to the publication of the Circular.
The Board further believes that it will be able to return approximately a
further £5.2 million (representing 17 per cent. of the Company's Net Asset
Value as at 6 March 2024) by the end of June 2024 making a total return by
then of over 50 per cent. of Shareholders' current capital.  Realisations to
date have proceeded well and liquidity has been achieved, ahead of Board
expectations across the portfolio without detriment to the listed valuations.

Quote from the Chairman, Hugh Aldous:

"The Board has been considering the best options for Shareholders in this
relatively sub-scale investment company and in current markets. It has been
conferring with Shareholders and believes that a managed wind down of the
Company together with the proposals which seek to return 100 per cent. cash to
Shareholders, in a fair, equitable, efficient and orderly manner pursuant to
the B Share Scheme, is in the best interests of Shareholders as a whole. It
has been very pleased with the support that Shareholders have shown to date
for these proposals. The Company continues to be on track to return over 50
per cent. of Shareholders current capital by the end of June 2024 and notes
that realisations to date have proceeded well and liquidity has been achieved,
ahead of Board expectations across the portfolio without detriment to the
listed valuations."

Timetable

It is expected that the timetable will be as follows:

                                                                            2024
 Publication of the Circular                                                8 March
 Latest time for receipt of Forms of Proxy and electronic appointments of   2.00 p.m. on 28 March
 proxies in respect of the General Meeting
 General Meeting                                                            2.00 p.m. on 3 April
 Record Date in respect of first Return of Capital                          6.00 p.m. on 3 April
 Issue and allotment of B Shares in respect of the first Return of Capital  4 April
 Redemption Date in respect of first Return of Capital                      4 April
 Payment date: (i) cheques posted to Shareholders; and (ii) CREST holders   By 9 April
 credited with funds, in each case respect of the first Return of Capital

 

All redemption payments will be paid gross of tax.

 

 

Defined terms used in this announcement have the meanings given in the
Circular unless the context otherwise requires

 

For further information please contact:

 

 Chairman

 Hugh Aldous                 tel: 020 7416 7780

 Dickson Minto Advisers LLP

 Douglas Armstrong           tel: 020 7649 6823

 

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