Proposed rollover into Perpetual investment trust awaits approval of shareholders at EGM
Investors in the GT Japan Investment Trust face EGMs within the next two months to decide the future of their holdings.
The board, which came in in July, is proposing a rollover into the Perpetual Japanese Investment Trust or the Perpetual Japan unit trust
These proposals are contingent on the approval of shareholders at two GT Japan EGMs to be held by November.
Holders of 26.4% of the share capital have already indicated support.
Shareholders who want to realise their position for cash are advised to take the unit trust option and then elect to redeem this holding.
At an emergency EGM held on 16 July shareholders backed Invesco to take-over the trust's management from Sloane Robinson.
Alan Ray, analyst at Credit Lyonnais, said: 'Perpetual Japanese investment trust is a quality vehicle but suffers from a size problem, with total assets now less than £20m. Any help from continuing shareholders from GT Japan will obviously help the situation. Invesco would not be offering this option without good reason to believe it will be taken up by a reasonable number of shareholders.'
The costs of implementing the proposals will be spread pro-rata between existing and continuing shareholders, and are not expected to exceed 1.6% of net assets at 18 September, equivalent to £0.9m.
Another Pacific trust facing corporate change is Govett Asian Smaller Companies, following a requisition made by Charlemagne Capital, which has an 18.6% stake in the trust.
An EGM will be held before November, following the requisition, made on 23 August, which states that shareholders should be allowed the opportunity to exit the fund at a minimum 95% of NAV.
Under the proposals to be voted on at the forthcoming EGM, the investment trust would be liquidated and shareholders given the option to rollover their investment into an open-ended managed fund from Govett, which would invest in Asia and the Pacific.
Govett has two such funds, Govett Asia Pacific and Govett Pacific Opportunities. Alternatively shareholders would be able to exit the trust at NAV less costs.
James de Sausmarez, managing director of investment trusts at Govett, said: 'I am disappointed but shareholders need to make the decision. I know a number of shareholders are unhappy about being in a fairly illiquid investment in Asia and want the flexibility to sell if they want to, which they could get from being in an open-ended vehicle.'
Current market conditions have also driven the Investment Trust of Investment Trusts, managed by Jupiter, to propose a reorganisation, due to a danger of breaching its banking covenant.
The board has announced a placing and open offer of up to 18.66 million new ordinary shares and up to 72 million preferred income shares, with the aim of raising £40m in new assets for the trust.
Andrew Watkins, head of investment trusts at Jupiter, said the trust's performance had suffered as many of the investment trusts it invests in have fallen victim of conditions in the market.
He added: 'The plan is that the reorganisation will restore, or greatly improve, the banking covenant; that it will restore the cover to zeros, which had got below one; that it will protect the income stream for ordinary income shareholders; and, hopefully, over the remaining life of the trust, that it will give the ordinary income shareholder a better chance of getting some capital back.'
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