RNS Number : 6436K
KSK Emerging India Energy Fund Ltd
23 December 2008
Not for release, publication or distribution in, or into, the United States, Canada, Australia, Japan, Israel, the Republic of Ireland
or the Republic of South Africa.
Press Release 23 December 2008
KSK Emerging India Energy Fund Limited
("KEF" or "the Company")
Proposed Tender Offer by Liberum Capital Limited to return up to �42.5 million to
Eligible Shareholders of the Company
or
Proposed members' voluntary liquidation of the Company and cancellation of admission of the Shares to trading on AIM and CISX
and
Notice of Extraordinary General Meeting
Further to the announcement made on 9 December 2008 in which KSK Emerging India Energy Fund Limited (AIM:KEF) announced Proposals to be
put forward to Shareholders at an extraordinary general meeting, the Company announces today that a Circular has been sent out to all
Shareholders which sets out the background to and reasons for these Proposals and to explain what Shareholders should do next.
Shareholder approval is required to proceed with either the Tender Offer or the Liquidation. Accordingly, an Extraordinary General
Meeting is being convened at 2nd Floor, No. 1 Le Truchot, St Peter Port, Guernsey GY1 3JX, at 1 p.m. on 22 January 2009, the notice of which
is set out at the end of the Circular.
- Ends -
For further information:
KSK Emerging India Energy Fund Limited
Tanmay Das, Non-Executive Director Tel: +44 (0) 20 7398 7702
www.ksk-eiefund.com
Liberum Capital Limited
(Financial Adviser and Broker)
Steve Pearce Tel: +44 (0) 20 3100 2224
steve.pearce@liberumcapital.com www.liberumcapital.com
Grant Thornton UK LLP
(Nominated Adviser)
Philip Secrett Tel: +44 (0) 20 7728 2578
philip.j.secrett@gtuk.com www.gtuk.com
Media enquiries:
Abchurch Communications Limited
Henry Harrison-Topham Tel: +44 (0) 20 7398 7702
nick.probert@abchurch-group.com www.abchurch-group.com
Disclaimer
This press release is not for distribution (directly or indirectly) in or to the United States, Canada, Australia, Japan, Israel, the
Republic of Ireland or the Republic of South Africa or any other jurisdiction in which the same would be unlawful. This press release is not
an offer of securities for sale in or into the United States, Canada, Australia, Japan, Israel, the Republic of Ireland or the Republic of
South Africa. This press release does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any
offer to purchase or subscribe for, any Ordinary Shares of the Fund.
The following information is an excerpt from the circular to Shareholders (the "Circular") posted today. Further copies of this
Circular, the Tender Form and the Form of Proxy may be obtained on request from Capita Registrars by telephone on 0871 664 0321 from within
the UK or +44 20 8639 3399 if calling from outside the UK between 9.00am and 5.00pm (London time) Monday to Friday (except UK public
holidays). Definitions used in the Circular apply in this announcement unless the context otherwise requires.
Proposed Tender Offer by Liberum to return up to approximately �42.5 million to
Eligible Shareholders or Proposed Members' Voluntary Liquidation of the Company
1. Introduction
On 9 December 2008, the Company announced Proposals to be put forward to Shareholders at an extraordinary general meeting of the
Company. The purpose of this letter is to set out the background to and reasons for these Proposals and to explain what Shareholders should
do next. Defined terms can be found on pages 26 to 28 of the Circular. Shareholder approval is required to proceed with either the Tender
Offer or the Liquidation. Accordingly, an Extraordinary General Meeting is being convened at 2nd Floor, No. 1 Le Truchot, St Peter Port,
Guernsey GY1 3JX, at 1 p.m. on 22 January 2009, the notice of which is set out at the end of the Circular.
2. Background to and reasons for the Proposals
Since the Company's admission to AIM and the CISX in June 2008, the global financial crisis has materially affected the investment
landscape in India and abroad. This backdrop has presented the Company and its Investment Manager with new investment opportunities and a
basis upon which to renegotiate more favourable terms with pipeline target companies, including some of those referred to in the Admission
Document. Although the events described above have delayed the deployment of capital, the Board believes that the resultant preservation of
funds to date has been in the best interests of Shareholders, and that the Company remains in a strong position to exploit attractive entry
valuations in an increasingly capital constrained market.
As at 30 November 2008, the estimated unaudited Net Asset Value per Share was 99.5 pence of which 93.8 pence represented cash deposits.
Whilst the Board believes that the Company would be able to invest its funds in accordance with its investment policy within a
reasonable period of time, it is also aware of some Shareholders who, predominantly due to internal issues within their own funds, wish to
realise part or all of their investment in the Company at close to Net Asset Value per Share but are unable to do so because of a lack of
liquidity in the Shares.
The Board has therefore decided to put forward the Tender Offer proposal under which the Company can use its cash resources to provide
liquidity to Shareholders at close to Net Asset Value and continue with a smaller capital base. If the Tender Offer proceeds, the Board and
the Investment Manager believe that, despite a smaller pool of capital available for investment, the Company will remain in a position to
generate long term capital growth for Shareholders through diversified exposure to an actively managed portfolio of investments engaged in
the Indian power and energy sector value chain.
The Board also considers it appropriate to put forward the Liquidation proposal so that, in the event that sufficient Shareholders wish
to realise all of their investment in the Company, the Company can be wound up and capital returned to Shareholders upon settlement of all
liabilities and obligations by the Proposed Liquidators. If the Liquidation proceeds the Delisting will take effect shortly afterwards.
If neither the Tender Offer Resolution nor the Liquidation Resolution are passed then the Company will continue to pursue its investment
strategy as currently constituted.
The Circular sets out details of these Proposals, as well as instructions on how Shareholders should proceed. Shareholders should note
that the Tender Offer Resolution (which is resolution 2) and the resolution to renew the Company's buy back authority (which is resolution
3) are both conditional upon the Liquidation Resolution not being passed. Therefore, if the Liquidation Resolution (which is resolution 1)
is passed, then the Tender Offer Resolution and resolution to renew the general buy-back authority will become irrelevant. Accordingly, in
these circumstances, the EGM will be adjourned indefinitely and the Tender Offer Resolution and the resolution to renew the general buy back
authority will not be put to the vote of Shareholders. The Tender Offer will only proceed if Shareholders do not pass the Liquidation
Resolution and subsequently pass the Tender Offer Resolution and the other conditions to the Tender Offer are satisfied.
Shareholders can vote on the Form of Proxy in favour of all, some or none of the resolutions set out on thereon. However, if the
Liquidation Resolution is passed at the EGM the Liquidation will begin immediately and the Tender Offer Resolution and the resolution to
renew the general buy back authority will not be put to the vote of Shareholders.
3. Details of the Proposals
Tender Offer
In order to provide an opportunity for Shareholders to realise part of their investment in the Company at close to Net Asset Value, the
Board proposes to offer, by way of the Tender Offer, to Eligible Shareholders the opportunity to tender to Liberum, in aggregate, up to
47,250,000 Shares (representing 50 per cent. of the total number of Shares in issue at the Record Date less those Shares held in treasury)
at a price of 90 pence per Share.
Under the Tender Offer, Eligible Shareholders will be able to tender to Liberum for cash up to 50 per cent. of such Shareholder's
holding of Shares entered on the Register at the Record Date, rounded down to the nearest whole number of Shares (the Basic Entitlement).
Eligible Shareholders will also be able to tender additional Shares to Liberum in excess of their Basic Entitlement, but such tenders will
only be satisfied, pro rata, to the extent that other Shareholders tender less than their Basic Entitlement.
If the number of Shares validly tendered exceeds 47,250,000 then, if and to the extent that any Eligible Shareholders have tendered less
than their Basic Entitlement (and subject to exceeding de minimis requirements) surplus tenders will be accepted in proportion to the number
of additional Shares tendered, but only so that the total number of Shares repurchased through the Tender Offer does not exceed 47,250,000.
In addition, each tendering Shareholder may tender Shares in excess of the Basic Entitlement, but such excess will only be accepted on a pro
rata basis to the extent that other Eligible Shareholders do not tender the Basic Entitlement.
The Tender Offer will not proceed unless the Tender Offer Resolution is passed and the Liquidation Resolution is not passed.
Furthermore, the Tender Offer will only proceed on the basis that the conditions set out in Part III of the Circular are satisfied. The
Tender Offer will be void if less than one per cent. of the Shares are tendered.
A Tender Form (which for certificated shareholders is enclosed with this Circular) cannot be withdrawn once it has been submitted. To be
valid, Tender Forms must be received by the Receiving Agent, Capita Registrars, Corporate Actions, The Registry, 34 Beckenham Road,
Beckenham, Kent BR3 4TU no later than 1 p.m. on 20 January 2009. The Tender Offer is also conditional upon the Repurchase Agreement becoming
unconditional in all respects (save in respect of any condition relating to the Tender Offer becoming unconditional). Details of the
Repurchase Agreement are set out in paragraph 6 below.
Further information relating to the Tender Offer is set out in Part II and Part III of the Circular.
The Tender Offer is being made by Liberum. Liberum will, as principal, purchase validly tendered Shares by means of on-market purchases
and, upon completion of those purchases, will use its reasonable endeavours to seek to sell such Shares to third party purchasers in the
market at the Tender Offer Price, failing which such Shares will be acquired by the Company from Liberum at a price equal to that paid by
Liberum under the Tender Offer under the terms of the Repurchase Agreement.
The Company is permitted to hold up to 10 per cent. of its issued share capital in treasury and it therefore proposes to hold the
maximum permitted number of Shares repurchased from Liberum under the Repurchase Agreement in treasury. The balance of the Shares
repurchased in excess of the 10 per cent. maximum will be cancelled.
The obligation on Liberum to sell any tendered Shares that it purchases has not been underwritten and there is no assurance as to the
number of Shares for which third party purchasers will be found. Under the Repurchase Agreement, Liberum is legally bound to sell to the
Company by way of market purchase any Shares acquired by it under the Tender Offer and not sold to third party purchasers in the market at
the Tender Offer Price.
Subject to satisfaction of the Company's obligations under Guernsey Law (which the Directors have no reason to believe have not or will
not be satisfied), the repurchase of Shares by the Company will be funded from the Company's cash resources.
The Directors are of the opinion, having made due and careful enquiry, that on conclusion of the proposed Tender Offer, the Company will
have sufficient working capital available to it for its present requirements, that is, for at least the next 12 months from the date of the
Circular.
Liquidation and Delisting
Shareholders will be asked at the Extraordinary General Meeting to consider the Liquidation Resolution which, if passed, will result in
the Company being put into an immediate members' voluntary liquidation. The Delisting would take effect shortly afterwards. The Liquidation
Resolution, which is a special resolution and requires the support of 75 per cent. of those present and voting to vote in favour of it, also
includes an approval for the cancellation of (i) the admission to trading of the Shares on AIM and on CISX and (ii) the Company's CISX
listing.
Trading in the Shares on both AIM and the CISX will be suspended at 7 a.m. on 22 January 2009, the date of the EGM. If the Tender Offer
proceeds, trading of the Shares on AIM and the CISX will recommence at 7 a.m. on 23 January 2009. If the Liquidation proceeds, the Delisting
is anticipated to be effective on 23 January 2009.
Details of the Liquidation and the financial effect of the return of capital to Shareholders
If the Liquidation Resolution is passed, the Company will cease to carry on business except in so far as may be expedient for the
winding up of the Company. The Liquidation Resolution includes a provision for the appointment of the Proposed Liquidators who will commence
the process of settling the Company's liabilities and returning assets to Shareholders in accordance with the Law as soon as practicable
after their appointment. Powers of the directors cease on the appointment of the Proposed Liquidators.
The conduct of the Liquidation and the timing and amount of any distributions to Shareholders will be the responsibility of the Proposed
Liquidators. The amount and timing of payments to Shareholders will be dependent primarily upon the absence of any significant claims not
currently provided for being notified to the Proposed Liquidators and no significant movement in the value of the Company's assets. The
Board is not currently aware of any such claims that would adversely impact on the return of cash to Shareholders or any matters which would
significantly diminish the value of the Company's assets. The Directors have discussed the amount and timing of distributions to
Shareholders with the Proposed Liquidators, who have based their considerations on the unaudited management accounts for the Company as at
30 November 2008, on the assumption that no significant new claims are received after the Liquidation begins and that no significant
diminution in the value of the Company's assets occurs. On the basis of such discussions and the bases set out, the Directors anticipate that the Proposed Liquidators are likely to make an initial
distribution to Shareholders of approximately 90 pence per Share within a period of six weeks following their appointment. The Directors
further anticipate that the Proposed Liquidators will distribute around 97 pence per Share in total to Shareholders, which includes the
initial distribution. The Closing Price on 19 December 2008, the Business Day before the date of the Circular, was 79 pence. As noted below,
the timing and amount of the distributions will be for the Proposed Liquidators to decide at the relevant time and the anticipated
distribution figures given are estimates based on data and information currently available.
The Company is party to the Investment Management Agreement. If the Liquidation proceeds, the Board has been advised that this will
constitute a termination event under the terms of that agreement. Further details of the Investment Management Agreement and the
consequences of termination are set out below. It is possible that a claim may be brought against the Company by the Investment Manager if
the Liquidation proceeds and the Investment Management Agreement is terminated. As at the date of this Circular, no such claim has been made
and it is not, therefore, possible to assess the merits or value of any such claim.
As soon as the Company's affairs are fully wound up the Proposed Liquidators will prepare an account and call a general meeting of the
Company at which the account will be presented and explained. After the meeting, the Proposed Liquidators will give notice to the registrar
in Guernsey of a final meeting and the date of this final meeting. The registrar publishes the fact of this final meeting and that the
Company is to be dissolved. The expenses relating to the voluntary winding up, including the remuneration of the Proposed Liquidators are
payable from the Company's assets in priority to all other claims.
Factors which could affect the amount and timing of distributions to Shareholders on Liquidation
Shareholders should be aware that the total amount of cash which can be returned to Shareholders and the timing of the distributions
remain dependent upon a number of factors, including the amounts realised from the liquidation of the current investments, the amounts
required to settle outstanding liabilities, (including accrued but unpaid fees earned by the Investment Manager under the Investment
Management Agreement or any claim brought under that agreement) and the costs of the Liquidation. Shareholders should also note that the
Board's estimate of the total amount to be returned, and the timing and the amount of the instalments of cash, is subject to any liabilities
that are brought to the attention of the Proposed Liquidators or the Board after the date of this document, the existence or extent of which
the Board is not or may not be aware of as at the date of this document.
Prior to distributing cash to Shareholders, the Proposed Liquidators must be satisfied that either all liabilities have been settled or
that sufficient cash has been retained to discharge or provide for all actual and contingent liabilities. This involves an initial period of
at least 30 days during which the Proposed Liquidators will advertise for claims against the Company, specifying a deadline by which any
claims must be determined. Cash can be released at such time as the Proposed Liquidators determine that all actual and contingent
liabilities have been paid, provided for or discharged and that there is surplus cash available for distribution. This process can take
time. It is therefore usual for cash to be distributed to Shareholders in a series of instalments, the amount and timing of each being
dependent on the cash available and the status of known and potential liabilities.
The initial distribution payment will be made by Capita Registrars through CREST to uncertificated shareholders and by cheque to
certificated shareholders and sent by pre-paid post to the registered address of the Shareholders entitled thereto. Any subsequent payment
will be by cheque only. All Liquidation distributions will be made at each Shareholder's own risk and may be subject to transaction costs
and other bank charges. The Board cannot guarantee that the Proposed Liquidators will return cash to the Shareholders as described in this
document because the decision as to the amount and timing of cash instalments will be under the control of the Proposed Liquidators and
taken in view of the circumstances at the time.
Shareholders should note that the Tender Offer Resolution is conditional upon the Liquidation Resolution not being passed, and so the
Tender Offer Resolution will not be put to Shareholders at the EGM if the Liquidation Resolution is passed. If Shareholders vote in favour
of the Liquidation Resolution, the Liquidation will proceed, the EGM will be adjourned indefinitely and neither the Tender Offer Resolution
nor resolution 3 will be put to a vote.
If the Liquidation proceeds, the Proposed Liquidators will be appointed immediately upon the
conclusion of the EGM.
If neither Tender Offer Resolution nor the Liquidation Resolution are passed the Company will continue to pursue its investment strategy
as currently constituted.
Investment Management Agreement
The Company entered into the Investment Management Agreement for an initial period of 5 years. If the Liquidation proceeds, this
agreement will terminate immediately under the terms of this agreement and the agreement states that no compensation shall be payable by
either party to the other. The Investment Management Agreement sets out a process for calculating and paying to the Investment Manager
accrued but unpaid management and performance fees following the termination of this agreement. In addition, the Investment Manager has
been indemnified by the Company in relation to expenses incurred by the Investment Manager in carrying out due diligence on prospective
investments approved by the Board.
Dealings, transfers and cancellation of Admission on AIM and CISX
Until the date of the EGM, trading in the Shares will continue on a normal market basis on AIM and the CISX. At 7.00 a.m. on 22 January
2009, being the day of the EGM, trading in the Shares on AIM and CISX will be suspended. If the Liquidation proceeds, at 7.00 a.m. on 23
January 2009, being the day following the EGM, the Delisting will take effect. If the Liquidation does not proceed, trading of the Company's
shares on AIM and the CISX will recommence at 7.00 a.m. on 23 January 2009, being the day following the EGM.
The register of members of the Company will be closed at 5.00 p.m. on 20 January 2009. To be valid all transfers must be lodged with the
Registrars prior to closing of the register of members. Transfers received by the Registrars after such time will be returned to the person
lodging the same. If Shareholders dispose of Shares otherwise than through the London Stock Exchange and the CISX they must make their own
arrangements with the other parties concerned as regards their entitlement to any distributions in the proposed Liquidation and other rights
attaching thereto.
Result of EGM
Shareholders should note that, if the Liquidation Resolution is passed by 75 per cent. of those Shareholders present and voting at the
Extraordinary General Meeting, the Liquidation proposal will become effective. The Tender Offer Resolution will not then be put to the
Meeting.
If the Liquidation Resolution is not passed and the Tender Offer Resolution is then passed by a simple majority of those Shareholders
present and voting at the Extraordinary General Meeting, the Tender Offer will proceed (if certain other conditions are met).
If neither the Liquidation Resolution nor the Tender Offer Resolution are passed then the Company will continue to pursue its investment
strategy as currently constituted.
4. Overseas Shareholders
The attention of Shareholders who wish to participate in the Tender Offer is drawn to the section headed "Overseas Shareholders" set out
in paragraph 10 of Part III of the Circular.
It is the responsibility of Overseas Shareholders to satisfy themselves as to the observance of any legal requirements of their
jurisdiction including, without limitation, any relevant requirements in relation to the ability of such Shareholders to participate in the
Tender Offer.
5. Taxation
A UK resident or ordinarily resident Shareholder who sells Shares under the Tender Offer in the market to a market participant acting as
principal should be treated, for the purposes of UK taxation, as though the Shareholder had sold them in the normal way to a third party.
This may give rise to a gain that is subject to the UK taxation of chargeable gains.
Any cash distributions made by the Proposed Liquidators to UK resident or ordinarily resident Shareholders should qualify as capital
distributions and so would not be taxed as income in the hands of such Shareholders but will instead be treated as a disposal of their
shareholding. This may give rise to a gain that is subject to the UK taxation of chargeable gains.
A general guide to the position of Shareholders under UK law in respect of the Tender Offer and the Liquidation is set out in Part IV of
the Circular.
The above information and that set out in Part IV of the Circular on the taxation consequences of the disposal of Shares is based on the
law and practice currently in force in the UK and Guernsey. It may not be applicable to certain Shareholders including dealers in securities
and Shareholders who are not beneficial owners. This information is given by way of a general summary only and does not constitute legal or
tax advice to any Shareholders. If any Shareholder is in doubt as to his taxation position, he is strongly recommended to consult a
professional adviser without delay.
6. Repurchase Agreement
Under the terms of the Repurchase Agreement, the Company has agreed to purchase from Liberum such number of Shares as Liberum acquires
from Eligible Shareholders pursuant to the Tender Offer at a price per Share equal to the Tender Offer Price. The Repurchase Agreement is
conditional upon, inter alia, the Tender Offer becoming unconditional in all respects (save in respect of any condition relating to the
Repurchase Agreement becoming unconditional) and the Company having deposited a sum equal to the Tender Offer Price multiplied by the
maximum number of Shares to be purchased by Liberum under the Tender Offer (the "Cash Deposit") into an escrow account by 5 p.m. on 7
January 2009 (or such date as Liberum shall determine in accordance with the Repurchase Agreement). In the event that the conditions to the
Repurchase Agreement are not satisfied, the Repurchase Agreement shall terminate.
Subject to satisfaction of the conditions to the Repurchase Agreement Liberum will use reasonable endeavours to sell Shares sold to it
by Eligible Shareholders to third party purchasers in the market at a price per Share equal to the Tender Offer Price, failing which the
Company will acquire such Shares at a price per Share equal to the Tender Offer Price.
The Company has given certain warranties and an indemnity in favour of Liberum (such warranties were given on the date the agreement was
entered into and will be repeated at all times up to completion of the Repurchase Agreement), including warranties that the Company is able
lawfully to use its cash reserves to purchase the Shares which may be acquired by Liberum from Eligible Shareholders pursuant to the Tender
Offer and that the Company is able to enter into the Repurchase Agreement and perform its obligations under that agreement. If these
warranties are breached prior to completion, Liberum has the right to terminate the Repurchase Agreement.
The Company has also entered into an escrow account instruction letter pursuant to which the Cash Deposit will be deposited into an
escrow account by the Company to be released to Liberum in satisfaction of the Company's obligation to make payment for the Shares to be
purchased from Liberum under the terms of the Repurchase Agreement.
7. Notification of Interests
Following any purchase of Shares arising from the Tender Offer (if it proceeds) and any sale of such tendered Shares by Liberum to third
party purchasers or to the Company (as the case may be), a Shareholder's interest in the Company's voting rights may change, giving rise to
an obligation on the Shareholder in question to make a notification or a further notification to the Company under paragraph 5.1.2 of the
Disclosure and Transparency Rules published by the FSA pursuant to Article 4 of the Articles.
If Shareholders are in any doubt as to whether they should make a notification to the Company, or as to the form of that notification,
then Shareholders are advised to consult their solicitor or other professional adviser without delay.
8. General authority to make market purchases of Shares
If the Liquidation Resolution is not passed at the EGM, a further ordinary resolution will be put to Shareholders to authorise the
Company to make market purchases of Shares on such terms and conditions as the Directors may from time to time determine. The maximum price
which may be paid for a Share pursuant to this authority will be 105 per cent. of the average of the closing mid-market price for Shares for
the five Business Days before the purchase is made. Such purchases may be made up to a maximum of 14.99 per cent. of Shares in issue and
subject to the Company having funds lawfully available for the purpose. This authority, if given by Shareholders, will be separate from any
authority to repurchase Shares given pursuant to the Tender Offer Resolution.
9. Extraordinary General Meeting
The implementation of either the Tender Offer or the Liquidation requires the approval of Shareholders. A notice convening an
Extraordinary General Meeting of the Company, which is to be held at 2nd Floor, No. 1 Le Truchot, St Peter Port, Guernsey GY1 3JX at 1 p.m.
on 22 January 2009, is set out at the end of the Circular.
10. Action to be taken
Form of Proxy
Shareholders will find enclosed with the Circular a Form of Proxy for use at the Extraordinary General Meeting. Regardless of whether
you intend to be present at the Extraordinary General Meeting, you are requested to complete and return the accompanying Form of Proxy in
accordance with the instructions printed thereon, so as to be received by the Company's Registrars, Capita Registrars, Proxy Department, The
Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU as soon as possible and in any event no later than 1 p.m. on 20 January 2009. The Form
of Proxy has a pre-paid address for use within the UK only. The completion and return of the Form of Proxy will not preclude you from
attending the Extraordinary General Meeting or any adjournment thereof and voting in person should you so wish.
Shareholders can vote on this form in favour of all, some or none of the Resolutions set out below. However, if the Liquidation
Resolution is passed at the EGM the Liquidation will begin immediately and the Tender Offer will not take place.
Tender Offer
(a) Shares held in certificated form
Shareholders who hold their Shares in certificated form and who wish to participate in the Tender Offer should complete the Tender Form
in accordance with the instructions set out therein and return the completed Tender Form by post or by hand (during normal business hours
only) to the Receiving Agent, Capita Registrars, Corporate Actions, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU by no later
than 1 p.m. on 20 January 2009. A Tender Form, once lodged, is irrevocable and may not be withdrawn (subject to Liberum deciding otherwise
in its absolute discretion). Shareholders should also return the share certificate(s) and/or other document(s) of title in respect of the
Shares tendered with their Tender Form.
If your share certificate(s) and/or other document(s) of title are not readily available (for example, if they are with your
stockbroker, bank or other agent) or are lost, the Tender Form should nevertheless be completed, signed, dated and returned as described
above so as to be received by Capita Registrars, Corporate Actions, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU no later than 1
p.m. on 20 January 2009 together with any share certificate(s) and/or other document(s) of title you may have available, accompanied by a
letter of explanation stating that the (remaining) share certificate(s) and/or other document(s) of title will be forwarded as soon as
possible thereafter and, in any event, no later than 1 p.m. on 20 January 2009. If you have lost your share certificate(s) and/or other
document(s) of title, you should write to Capita Registrars, The Registry, 34 Beckenham Road, Beckenham, Kent BR3 4TU, for a letter of
indemnity in respect of the lost share certificate(s) and/or other documents(s) of title which, when completed in accordance with the instructions given, should be returned to the Receiving Agent so as to be
received no later than 1 p.m. on 20 January 2009.
(b) Shares held in uncertificated form
Shareholders who hold their Shares in uncertificated form (that is, in CREST) and who wish to participate in the Tender Offer should
send a TTE Instruction following the procedure set out in Part III of this Circular and ensure that the TTE Instruction settles by no later
than 1 p.m. on 20 January 2009.
Shareholders who do not wish to tender any of their Shares should return the Form of Proxy in accordance with the instructions above but
should not return the Tender Form or send a TTE Instruction.
Please note that neither Liberum nor Grant Thornton UK LLP nor Elysium Fund Management Limited nor Capita Registrars is permitted to
give any advice on the Tender Offer or any additional information or to provide financial advice of any kind in
connection with the Tender Offer.
11. The City Code on Takeovers and Mergers
Under Rule 9 of the City Code, when (i) any person acquires an interest in shares which (taken together with shares in which persons
acting in concert with him are interested) carry 30 per cent. or more of the voting rights of a company; or (ii) any person or group of
persons acting in concert individually or collectively hold not less than 30 per cent. but not more than 50 per cent. of the voting rights
of a company and acquires additional shares carrying voting rights of that company with the effect that their percentage holding of voting
rights is increased, that person or group of persons is normally required by the Panel to make a general offer to all shareholders of that
company at the highest price paid by them for shares in that company during the previous 12 months.
Under Rule 37.1 of the City Code, when a company purchases its own voting shares, a resulting increase in the percentage of voting
rights carried by the shareholdings of any person or group of persons acting in concert will be treated as an acquisition for the purpose of
Rule 9.
A shareholder who is neither a director nor acting in concert with a director will not normally incur an obligation to make an offer
under Rule 9 however this exception will not apply, and an obligation to make a mandatory offer may therefore be imposed, if a person (or
any relevant member of a group of persons acting in concert) has acquired an interest in shares at a time when he had reason to believe that
such a redemption or purchase of its own shares by the company would take place.
Members of the F&C group of companies ("F&C"), of which F&C Asset Management plc is the ultimate parent currently hold approximately
15.9 per cent. of the voting rights of the Company. In the event that the Tender Offer proceeds and all shareholders, except for F&C,
exercise their rights under the Tender Offer, F&C's maximum holding of voting rights would increase to 31.8 per cent. F&C is not acting in
concert with any of the Directors, the Investment Manager or any of the directors of the Investment Manager and, as far as the Company is
aware, any other party who may be deemed to be acting in concert with the Board. The Panel has been consulted and has agreed that, pursuant
to Note 1 of Rule 37.1, F&C will not be required to make a mandatory offer under Rule 9.1 as a result of the Tender Offer provided it does
not acquire an interest in shares at a time when it had reason to believe that such a redemption or purchase of its own shares by the
Company would take place.
12. Recommendation
The Directors believe that the Company remains in a position to generate long term capital growth for Shareholders through diversified
exposure to an actively managed portfolio of investments engaged on the Indian power and energy sector. The Directors consider that this
will still be the case even if the Tender Offer proceeds and the Company continues to invest with a smaller capital base. Therefore, after
careful consideration, the Directors recommend that Shareholders vote in favour of the Tender Offer Resolution.
The Tender Offer will only proceed if the Liquidation Resolution is not passed at the EGM. Consequently the Directors recommend that
Shareholders vote against the Liquidation Resolution.
The extent to which Shareholders participate in the Tender Offer is a matter for each Shareholder to decide, and will be influenced by
their own individual financial and tax circumstances and their investment objectives. Shareholders should seek advice from their own
independent financial and/or taxation adviser authorised under the FSMA or from another appropriately authorised financial adviser and/or
taxation adviser if they are in a territory outside of the UK.
13. Costs
The costs of the preparation of this document and associated expenses will be borne by the Company.
14. Further information
If you have any queries about what action you should take, you should seek advice immediately from your legal, tax or other independent
professional adviser.
Michael Liston
Chairman
Expected timetable of events*
Latest time and date for receipt of Tender Forms 1.00 pm on 20 January 2009
or for settlement of TTE Instructions
Tender Offer closes 1.00 pm on 20 January 2009
Record Date for participation in the Tender Offer 5.00 pm on 20 January 2009
Latest time and date for receipt of Forms of 1.00 pm on 20 January 2009
Proxy for the Extraordinary General Meeting
Suspension of trading in Shares 7.00 am on 22 January 2009
Extraordinary General Meeting 1.00 pm on 22 January 2009
Result of EGM announced 22 January 2009
Trading in Shares recommences (if Liquidation 7.00 am on 23 January 2009
does not proceed)
Delisting (if Liquidation proceeds) 23 January 2009
Purchase of Shares under the Tender Offer (if 26 January 2009
Tender Offer proceeds)
Settlement under the Tender Offer (if the Tender 2 February 2009
Offer proceeds)
* Each of the times and dates in the above table is subject to change.
All times are references to Guernsey time.
This information is provided by RNS
The company news service from the London Stock Exchange
END
NOEFEMFWESASEFE
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