REG - Momentum Multi-Asset - Publication of Circular

Momentum Multi-Asset Value TrustAnnouncement

21/07/2023 14:45

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RNS Number : 8475G  Momentum Multi-Asset Value Trust  21 July 2023

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THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATON FOR THE PURPOSES OF ARTICLE 7 OF
THE MARKET ABUSE REGULATION (EU) 596/2014 AS IT FORMS PART OF UK DOMESTIC LAW
BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018, AS AMENDED. ON THE
PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS
INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

21 July 2023

Momentum Multi-Asset Value Trust plc (the "Company")

Publication of Circular

 

Further to the Company's announcement of 25 May 2023, in which the proposals
for the recommended scheme of reconstruction and voluntary winding-up of the
Company were set out (the "Proposals"), the Board is today publishing a
circular (the "Circular") in connection with the Proposals, which includes
notices convening the required general meetings. Terms used in this
announcement but not otherwise defined shall bear the same meanings as are set
out in the Circular.

 

Introduction

 

Recent market challenges and share buy backs through the operation of the
Company's discount control mechanism ("DCM") have seen the Company reduce in
size, to net assets of around £40 million (as at the Latest Practicable
Date), and its ongoing charges ratio increase. This has put the long-term
viability of the Company in question and the Board has decided it is in the
best interests of Shareholders as a whole to liquidate the Company and give
Shareholders the option to roll their investment into VT Momentum Diversified
Income Fund (the "ICVC Sub-Fund"), a sub-fund of VT Momentum Investment Funds
II (the "ICVC"), an open-ended vehicle, or to receive a cash exit at close to
NAV.

The Board is today putting forward proposals to Shareholders for the
winding-up of the Company by way of a scheme of reconstruction pursuant to
Section 110 of the Insolvency Act 1986 (the "Scheme"). Under the terms of the
Scheme, Shareholders will be offered the opportunity to roll over their
investment into the ICVC Sub-Fund, an open-ended fund also managed by Momentum
Global Investment Management Limited (the "Investment Manager"), or to receive
cash in respect of their investment in the Company, or a combination of both
(the "Proposals").

The opportunity to roll over into the ICVC Sub-Fund will provide Shareholders
with the ability to maintain a consistent investment approach. The ICVC
Sub-Fund is managed by the Investment Manager and has the same
valuation-driven philosophy as the Company. The ICVC Sub-Fund has similar
investment objectives to the Company and there is a material overlap of
portfolio holdings. The ICVC Sub-Fund aims to generate a high level of income
with the prospect of maintaining the real value of capital over the long term,
by investing in a multi-asset portfolio. It is larger than the Company, with
net assets of around £135 million (as at the Latest Practicable Date), and
benefits from a lower ongoing charges ratio and a higher yield.

The options

 

Shareholders may elect, in whole or in part and in accordance with their
personal investment requirements, for either or both of the following options:

·      the Rollover Option - rolling over some or all of their
investment into ICVC Shares to be issued by the ICVC Sub-Fund; and/or

·      the Cash Option - receiving cash in the liquidation of the
Company in respect of some or all of their investment in the Company.

Shareholders (other than Restricted Shareholders) that make no Election (or no
valid Election) will be deemed to have elected for ICVC Shares.

The Proposals

Under the Proposals, the Company will be wound up on the Winding-up Date by
means of a members' voluntary liquidation pursuant to a scheme of
reconstruction under Section 110 of the Insolvency Act 1986 and Shareholders
may elect to receive ICVC Shares in the ICVC Sub-Fund (being VT Momentum
Diversified Income Fund) and/or cash in respect of all or part of their
holding of Ordinary Shares in the Company. Shareholders who elect to roll over
their investment into the ICVC Sub-Fund will receive ICVC Shares and, in
consideration of such issue, the Company will transfer a portion of its net
assets to the ICVC (for the benefit of the ICVC Sub-Fund). In this way, it is
envisaged that UK resident Shareholders will be given a tax-efficient rollover
of their entitlements.

The ICVC Shares will be issued at the prevailing net asset value per ICVC
Share as at 12.00 noon on the Effective Date.

Shareholders who elect for the Cash Option will be sent a cheque (although the
Directors reserve the right to send an electronic payment if the amount is in
excess of £250,000) in respect of their entitlement if they hold Ordinary
Shares in certificated form or receive payment through CREST in respect of
their entitlement if they hold Ordinary Shares in uncertificated form.

Shareholders' approval is required to implement parts of the Proposals which
will involve the reclassification of the Company's existing Ordinary Shares to
give effect to the respective options for which each Shareholder has elected,
the voluntary winding-up of the Company and the appointment of the
Liquidators.

Benefits of the Proposals

The Directors consider that the Proposals should have the following benefits
for Shareholders as a whole as compared to their current position, or under a
liquidation:

·      they enable Shareholders to roll over some or all of their
investment into the ICVC Sub-Fund, which aims to generate a high level of
income with the prospect of maintaining the real value of capital over the
long term, by investing in a multi-asset portfolio managed with a focus on
value which may include directly invested UK equities with a bias towards
mid-cap stocks, and overseas equities, fixed income, specialist assets and
managed liquidity held through third party funds;

·      Shareholders electing for the Rollover Option will not suffer the
full dealing costs that would be incurred on the realisation of the Company's
portfolio in the event of a simple winding-up and reinvesting the cash
proceeds; and

·      Shareholders who may be subject to UK capital gains tax or
corporation tax on chargeable gains should be able to roll over their
investment into the ICVC Sub-Fund and thereby continue to receive investment
returns without triggering an immediate liability to UK capital gains tax or
corporation tax on chargeable gains.

Shareholders who elect for the Cash Option in respect of some or all of their
investment will receive cash in the liquidation of the Company to the extent
of their Election for the Cash Option. Shareholders should note that,
depending on their particular circumstances, this may trigger a chargeable
gains tax liability. Please refer to the paragraph headed "Taxation" in Part 4
of the Circular for further details.

Shareholders who are in any doubt as to the contents of this announcement or
the Circular or as to the action to be taken should immediately seek their own
personal financial advice from an appropriately qualified independent adviser
authorised pursuant to the Financial Services and Markets Act 2000.

Entitlements of Shareholders under the Scheme

A Shareholder who elects to roll over all or part of their investment into the
ICVC Sub-Fund will be entitled to receive such number of ICVC Shares as is
produced by dividing the proportion of the value of the ICVC Rollover Pool
(less any stamp duty or SDRT payable on the transfer of the ICVC Rollover Pool
to the ICVC Sub-Fund) to which he/she/it is entitled by the ICVC Share
Subscription Price (further details are set out in Part 2 of the Circular, in
particular, in paragraph 7.3 therein). The appropriation of the Company's
assets to the ICVC Rollover Pool will occur on the Calculation Date and will
be based on the Residual Net Asset Value per Share multiplied by the aggregate
number for the Rollover Option. As the appropriation of the Company's assets
to the ICVC Rollover Pool will occur on the Calculation Date, the value of
Shareholders' entitlements may be adversely affected by movements in the value
of the assets contained in the ICVC Rollover Pool between the Calculation Date
and the Effective Date.

A Shareholder who elects for the Cash Option will be entitled to receive the
net realisation proceeds of such portion of the Cash Pool to which he/she/it
is entitled. The appropriation of the Company's assets to the Cash Pool will
occur on the Calculation Date and will be based on the Residual Net Asset
Value per Share multiplied by the aggregate number of Ordinary Shares in
respect of which Shareholders have elected (or are deemed to have elected) for
the Cash Option. As the appropriation of the Company's assets to the Cash Pool
will occur on the Calculation Date, the value of Shareholders' entitlements
may be adversely affected by movements in the value of the assets contained in
the Cash Pool between the Calculation Date and the date of payment and cheque
despatch in respect of entitlements under the Cash Option (expected to be not
later than 10 Business Days from the Effective Date).

The Residual Net Asset Value per Share for these purposes is an amount equal
to the Company NAV at the Calculation Date minus the Retention amount and
after providing for the liabilities to be discharged out of the Liquidation
Pool to the extent not already taken into account as a liability in respect of
the Company NAV or the Retention, divided by the number of Ordinary Shares in
issue. The number of ICVC Shares to be issued to the Liquidators pursuant to
the Scheme (as nominees for the relevant Shareholders) will be calculated by
reference to the ICVC Share Subscription Price. Further details regarding the
number of ICVC Shares to be issued pursuant to the Scheme are set out in Part
2 of the Circular.

For illustrative purposes only, had the Calculation Date been 18 July 2023,
the Directors estimate that the Residual Net Asset Value per Share would have
been 149.21p. This is based on the following figures and estimates: the net
assets of the Company as at 18 July 2023 (published on 19 July 2023) which
were approximately £40,550,000 minus the anticipated costs of the Proposals
and of liquidating the Company, estimated at approximately £290,000
(including VAT), other potential liabilities to be discharged from the
Liquidation Pool estimated at approximately £0 and the retention anticipated
to be required by the Liquidators (to meet contingent and unknown liabilities)
of £100,000.

Based on the illustrative Residual Net Asset Value per Share set out above,
and assuming: (i) that there is no change in those net assets between 18 July
2023 and the Effective Date; (ii) that the revaluation of the ICVC Rollover
Pool on the Effective Date results in the same valuation as that performed on
the Calculation Date; (iii) that ICVC Shares are issued at 97.4919p (being the
ICVC Share Subscription Price); and (iv) that the assets in the Cash Pool are
realised at their value on the Calculation Date, this would give rise to the
following entitlements for every 1,000 Ordinary Shares held under the
Proposals:

·      1,525.049 ICVC Shares; or

·      £1,492.10 in cash.

The minimum subscription amount set out in the ICVC Prospectus will be waived
in respect of Shareholders who elect, or are deemed to elect, for the Rollover
Option.

The above figures are for illustrative purposes only and do not represent
forecasts. The Residual Net Asset Value per Share and Shareholders'
entitlements under the Proposals may change materially up to the Effective
Date as a result of, inter alia, changes in the value of the Company's
investments.

For details of the Scheme, please refer to Part 2 of the Circular.

Interim Dividend

In relation to the period from 1 May 2023 to 18 July 2023, as announced on 20
July 2023, the Directors have resolved that the Company will pay an interim
dividend of 2.5 pence per Ordinary Share (the "Interim Dividend") in order to
ensure that the Company meets the distribution requirements to maintain
investment trust status during the period from 1 May 2023 to the Winding-up
Date. This compares to an interim dividend of 1.8 pence per Ordinary Share
paid by the Company in September 2022 in respect of the first quarter of its
financial year to April 2023. The Interim Dividend will be paid on 18 August
2023 to Shareholders who are on the Register as at 6.00 p.m. on 28 July 2023.
The ex-dividend date for the Interim Dividend is 27 July 2023.

Expected Timetable

                                2023

 Ex-dividend date for the Interim Dividend                                     27 July

 Interim Dividend Record Date                                                  6.00 p.m. on 28 July

 Latest time and date for receipt of Forms of Proxy from Shareholders for the  10.00 a.m. on 11 August
 First General Meeting

 Latest time and date for receipt of the Forms of Election and/or TTE          1.00 p.m. on 11 August
 Instructions from Shareholders wishing to elect for the Cash Option

 Scheme Entitlements Record Date                                               6.00 p.m. on 11 August

 Ordinary Shares disabled in CREST                                             6.00 p.m. on 11 August

 First General Meeting                                                         10.00 a.m. on 15 August

 Calculation Date                                                              11.59 p.m. on 17 August

 Payment of the Interim Dividend                                               18 August

 Latest time for receipt of Forms of Proxy from Shareholders for the Second    10.00 a.m. on 21 August
 General Meeting

 Reclassification of the Ordinary Shares                                       8.00 a.m. on 22 August

 Suspension of dealings in Reclassified Shares                                 7.00 a.m. on 23 August

 Second General Meeting                                                        10.00 a.m. on 23 August

 Appointment of the Liquidators                                                23 August

 Effective Date and Transfer Agreement executed and implemented                23 August

 ICVC Shares issued pursuant to the Scheme                                     23 August

 First day of dealing in ICVC Shares                                           23 August

 Contract notes expected to be despatched in respect of ICVC Shares issued     Week commencing 28 August
 pursuant to the Scheme

 Cheques expected to be despatched and CREST payments made to Shareholders in  Not later than 10 Business Days from the Effective Date
 respect of the Cash Option

 Cancellation of listing of Reclassified Shares                                As soon as practicable after the Effective Date

 

The times and dates set out in the expected timetable of events above and
mentioned throughout this announcement may be adjusted by the Company in which
event details of the new times and dates will be notified, as requested, to
the Financial Conduct Authority, the London Stock Exchange and, where
appropriate, Shareholders. All references to time in this announcement are to
UK time.

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/
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism) #
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism)
/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism) . The Circular will
also be available on the Company's website
https://momentum.co.uk/investment-trust
(https://momentum.co.uk/investment-trust) and at the registered office of the
Company (Level 4, Dashwood House, 69 Old Broad Street, London, England, EC2M
1QS).

 

Enquiries:

Juniper Partners Limited, Company Secretary

0131 378 0500

 

Steve Hunter, Momentum Global Investment Management Limited

0151 906 2481

 

Sally Walton, SEC Newgate (media enquiries)

020 3757 6872

 

Legal Entity Identifier: 213800OQTUSRFDIL9L29

 

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