Following requests from shareholders, the board of the Close FTSE 100 Trust has announced proposals ...
Following requests from shareholders, the board of the Close FTSE 100 Trust has announced proposals to extend the life of the company from 21 July 2004 to a new wind-up date of 21 July 2008.
The proposal is intended to allow a greater period of activity to give the trust the chance to recoup its launch value following market falls which have stripped around 20% off the trust's NAV.
The trust was launched in 1999 with a planned life of five years, with the investment objective of achieving income and capital growth tracking that of the FTSE 100.
At launch the index stood at 6,328 and has since fallen significantly to 5,214 at close on 6 November 2001.
As a result, the company's net assets fell from £133.4m at launch to £100.7m on 30 October 2001, which after the deduction of bank borrowings of £54.3m, leaves net assets attributable to shareholders of £46.4m.
On this basis, the NAV attributable to each class of share is 111.7p per share for zeros, as compared to their capital entitlement on 30 October 2001 of 119.8p per share. For the income shares the NAV would be 1.4p per share, as compared with their repayment entitlement of 100p, and nil for the capital shares.
The proposals allow for an extension in the company's bank facility to 21 July 2008. As at the end of October 2001 these borrowings stood at £54.4m.
Based on index levels at the end of October, the drop in hurdle rate required for both income and capital share holders would be 10.1% and 12.1% per annum. For zero holders the hurdle rate would fall from 8% to 7.9% per annum, with an increase in the capital entitlement from 148.64p to 204.1p.
These proposals follow the announcement by Close Fund Management, as first reported in Investment Week, of the launch of the Close UK Index Growth Fund.
This fund will also have its performance based on the FTSE 100, and will consist only of zero shares. It will provide approximately 49% return over five years even if the index falls 20%.
The company is based in Guernsey and will be listed in London. The shares are available through a public offer and are eligible for inclusion in individual savings accounts and Peps. Minimum investment is £1,000 and thereafter in multiples of £1,000.
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