Northern Investors Company PLC.
Circ re. Proposed modification of investment objective, proposed change to investment policy and amendment to the Investment Management Agreement, and notice of meeting
24 JUNE 2011
NORTHERN INVESTORS COMPANY PLC
Proposed modification of investment objective, proposed change to investment policy and amendment to the Investment Management Agreement, and notice of meeting
Following the announcement on 10 May 2011, the Board of Northern Investors Company PLC (the "Company") announces that a circular (the "Circular") containing details of the proposed modification of the investment objective will be posted to Shareholders on 27 June 2011, along with the Form of Proxy for use at the General Meeting to be held at 12.45pm on Thursday 21 July 2011 at the Life Bioscience Centre, Times Square, Newcastle upon Tyne NE1 4EP (the "General Meeting").
As announced on 10 May 2011, the Board of the Company has consulted with the Company's largest Shareholders and, has concluded that it is in the best interests of Shareholders to undertake an orderly realisation of assets, ultimately leading to the voluntary liquidation of the Company. The Circular sets out the following proposals (the "Proposals"):
| that the investment objective and policy of the Company be modified with a view to realising the Company's assets in an orderly manner that achieves a balance between an efficient return of cash to Shareholders and maximising the value of the Company's investments;|
| that the terms of the Investment Management Agreement be amended in order to reflect the modification of the Company's investment objective and policy and to align the interests of Shareholders and the Manager through the realisation process;|
| that the Articles be amended to delete the provisions relating to the Continuation Vote and to specifically permit the funding of share buy-backs from capital profits; and|
|that the Company's share premium account be cancelled in order to create a distributable reserve to facilitate the return of cash to Shareholders.|
Subject to Shareholder approval of the Proposals, the Board will seek to return cash to Shareholders over time and is considering how this can be done as efficiently as possible.
The Board aims to realise the portfolio and return cash in an efficient manner to ensure that a balance between value and speed is achieved. The Board and the Manager believe that a carefully managed process of divesting the Company's investments, which are mainly in small and medium-sized unquoted companies, will return better value to Shareholders than any other option. The Company's portfolio companies have continued to perform well and the majority are well positioned to benefit from a continuation of the slow emergence of the UK economy from recession. Consequently, the Board believes that there are good prospects for Shareholders in due course to realise proceeds in excess of the present Net Asset Value ("NAV") per share.
It is the Board's current estimate that the overall timeframe for realisation will be approximately 5 financial years with a substantial proportion of the current NAV expected to be returned to Shareholders within the next 3 financial years ending in March 2015.
NVM Private Equity Limited (the "Manager") will be managing the orderly realisation process over time by seeking appropriate values for the underlying investments and managing the process of delivering cash to Shareholders. The Board has accordingly agreed, subject to Shareholder approval, to restructure the Manager's management and performance fee arrangements, which are not currently designed to accommodate the management of an orderly realisation process, in order to align so far as is possible the interests of the Company and the Manager throughout the realisation process. Under the Listing Rules, the Manager is a related party of the Company in relation to the amendments to the Investment Management Agreement. Accordingly, the amendments to the Investment Management Agreement require the approval of the Independent Shareholders.
The Board intends to consider with its advisers mechanisms for returning capital to Shareholders during the realisation period. The Company intends to maintain its investment trust status for as long as possible during this managed realisation process prior to liquidation and intends that dividends will accordingly continue to be paid as required by the relevant legislation.
A copy of the Circular has been submitted to the National Storage Mechanism and will shortly be available for inspection at: www.Hemscott.com/nsm.do
A copy of the Circular and the documents referred to in paragraph 6 of Page 14 of the Circular are available for inspection at the Company's registered office at Northumberland House, Princess Square, Newcastle upon Tyne NE1 8ER and at the offices of SJ Berwin LLP, 10 Queen Street Place, London EC4R 1BE during normal business hours on weekdays (Saturdays, Sundays and public holidays excepted) from the date of this document until the General Meeting.
Peter Haigh/Christopher Mellor, Northern Investors Company PLC - 0191 244 6000
Joe Winkley/Neil Winward, Oriel Securities Limited - 0207 710 7600
Neither the contents of the NVM Private Equity Limited website nor the contents of any website accessible from hyperlinks on the NVM Private Equity Limited website (or any other website) is incorporated into, or forms part of, this announcement.
The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and other applicable laws; and
(ii) they are solely responsible for the content, accuracy and originality of the
information contained therein.
Source: Northern Investors Co PLC via Thomson Reuters ONE