Zero holders who elected to exit the Gartmore Monthly Income split are being asked to wait up to two...
Zero holders who elected to exit the Gartmore Monthly Income split are being asked to wait up to two years to receive all their money.
There is an EGM on 13 May and if they reject the request, which is being put forward by the board, the trust will be placed into voluntary liquidation.
The board originally said zero holders could redeem their shares at a value of 109.37p each as at 30 April. However, 76.78% of zero holders elected to leave the trust, which would have reduced assets in the portfolio to such an extent that remaining zero holders would have seen their entitlement severely eroded. As a result, the board has put forward new proposals, allowing those exiting to take 78% of their shares at a value of 109.37p each. The remaining 22% of shares will be released to them over the next two years up to 30 April 2002.
Over this period, the remaining zeros will continue to accrue in value, subject to the underlying performance of the portfolio, up to the capital entitlement in April 2004 of 131.30p.
Roger Wood, chairman of the trust, said that, in the opinion of the board, they could not guarantee the protection of the continuing zero holders and, as such, concluded that a two-year realisation of the trust's remaining assets is necessary.
In such cases, the rights of ordinary shareholders are secondary to those of the zeros. In this case, they would be the beneficiaries from the surplus of net assets after the repayment of the capital entitlement for zeros and the repayment of the £72.5m bank debt. After these two repayments are made the trust will have remaining net assets of about £29.1m.
The board's original proposals on an exit route for the zero holders were put forward in February. At the forthcoming EGM shareholders will also be asked to vote on changing the name of the trust to GDT Securities.
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