Aberdeen UK Tracker Trust has announced that it has published a circular to Shareholders in connection with its proposals to reconstruct and wind-up the company. These proposals relate to its previous announcement on 30 November 2016, that its board had agreed heads of terms for a merger with Aberdeen Diversified Income and Growth Trust (ADIGT) (formerly BlackRock Income Strategies Trust).
The Proposals comprise a voluntary liquidation of the company and a scheme of reconstruction whereby Shareholders will be entitled to elect to receive new ordinary shares of ADIGT (the “Rollover Option”); and they can elect to receive cash (the “Cash Option”). Shareholders can make different Elections in respect of different parts of their holdings. The Cash Option is limited to 60 per cent. of the Cash NAV (which, for the avoidance of doubt, is subject to a discount of 2.75 per cent.). Should total Elections for the Cash Option exceed 60 per cent. of the Cash NAV, aggregate excess elections will be scaled back into ADIGT New Ordinary Shares on a pro rata basis. The enhancement from the Discount will be applied to the Rollover Pool and will be for the benefit of those Shareholders who have elected for the Rollover Option.
- The Directors believe that the Proposals should provide the following benefits for Shareholders:
- Shareholders may roll their investment into ADIGT, allowing for investment in a highly diversified, multi-asset approach to targeting highly attractive long-term income and capital returns with lower volatility than equity markets;
- Shareholders electing to receive shares in ADIGT in respect of their entitlements in the liquidation should expect to receive at least 103.59 per cent. of NAV, or at least 97.21 per cent. of NAV if electing for cash in respect of their entitlements in the liquidation (both on the basis of a cum income NAV per Share in the Company of 366.70 pence on 28 February 2017);
- Shareholders who roll their investment into ADIGT will have an investment in a larger company that may result in better liquidity for their shares trading on the London Stock Exchange compared to the current level of trading liquidity in the Company’s shares;
- Shareholders who roll their investment into ADIGT should be exposed to an above market target dividend yield, with dividends being paid quarterly;
- to utilise fully the investment trust structure via investment in certain less liquid asset classes; and
- the option to elect for cash at a tighter level than the prevailing current discount to net asset value subject to the Cash Pool Cap, which will be satisfied through a realisation of the portfolio.
The implementation of the Proposals will require two general meetings of the Company. The First General Meeting is to be held on 29 March 2017 and the Second General Meeting is to be held on 6 April 2017. Assuming that the scheme is passed and all other conditions are met, the company expects the new ADIGT shares to be admitted to trading on 10 April 20217 and for cheques to be posted to shareholders electing for the cash option on the week commencing 18 April 2017.
Aberdeen UK Tracker Trust publishes circular for reconstruction and wind-up : AUKT, ADIG