Chase Fleming is to go ahead with its Managed Income Trust following discussions with the Inland Rev...
Chase Fleming is to go ahead with its Managed Income Trust following discussions with the Inland Revenue.
The group wanted the trust as a rollover vehicle for those Robert Fleming shareholders who were given loan notes as part of the takeover of the company by Chase Manhattan.
As first reported in Investment Week earlier this month, the Revenue had at first refused to accept the vehicle as an acceptable rollover for loan note holders as it feared this might be a tax avoidance measure. It has now reversed that decision.
The initial offer period on the trust is open to Fleming loan note holders only and will close on 4 December. The group is looking to raise at least £25m from this source. The Fleming Managed Income trust will be open to external investment as soon as dealing commences on 8 December.
Adrian Mitchell will manage the trust which will be structured to provide an aggressive buy-back facility and the ability to issue shares without consulting shareholders.
These measures should enable the manager to increase the degree of control he has over the trust's discount.
Flemings has predicted an initial yield of 5.25% from the portfolio which will be divided between an investment trust portfolio containing split capital and conventional trusts, an open ended portfolio and a fixed income portfolio.
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