Regulatory Filings • Feb 10, 2020
Regulatory Filings
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If you are in any doubt about the contents of this document or as to the action you should take, you are recommended to seek your own independent financial advice from your stockbroker, bank manager, solicitor, accountant or other independent financial adviser authorised under the Financial Services and Markets Act 2000 if you are resident in the United Kingdom or, if not, from another appropriately authorised independent financial adviser who specialises in advising on the acquisition of shares and other securities.
If you sell or have sold or otherwise transferred all of your Ordinary Shares, please forward this document, together with the Form of Proxy as soon as possible to the purchaser or transferee, or to the bank, stockbroker or other agent through whom the sale or transfer was effected, for transmission to the purchaser or transferee. If you sell or have sold or otherwise have transferred only part of your holding of Ordinary Shares, you should retain these documents and consult the bank, stockbroker or other agent through whom the sale or transfer will be, or was effected. If you receive this document from another shareholder, please contact Computershare Investor Services (Guernsey) Limited for a Form of Proxy.
This document is not a prospectus but a shareholder circular and it is being sent to you solely for your information in connection with the Resolutions to be proposed at an extraordinary general meeting of the Company. It does not constitute or form part of any offer or invitation to purchase, acquire, subscribe for, sell, dispose of or issue, or any solicitation of any offer to sell, dispose of, purchase, acquire or subscribe for, any security, including any Ordinary Shares to be issued in connection with the Initial Issue comprising an Open Offer, Placing and Offer for Subscription or any Ordinary Shares to be issued in connection with the Share Issuance Programme.
The Securities Note containing details of the Initial Issue will not be posted to Shareholders and will be published on the Company's website at www.seqifund.com. Shareholders will be able to access the Securities Note together with the Registration Document and the Summary (together the "Prospectus") by clicking on the link in the Downloads section of the website. Investors should not subscribe for any Ordinary Shares except on the basis of the information and the terms and conditions of the Initial Issue and/or Share Issuance Programme contained in the Prospectus, and, if applicable, the accompanying Application Form.
(a company incorporated in Guernsey under the Companies (Guernsey) Law, 2008 (as amended) with registered no. 59596)
Recommended proposals for the Initial Issue to raise approximately £250 million (before expenses) by means of an Open Offer, Placing and Offer for Subscription at an issue price of 112 pence per Ordinary Share
and Share Issuance Programme in respect of up to 300 million Ordinary Shares and Scrip dividend mandate and Notice of EGM
This document should be read as a whole. Nevertheless your attention is drawn to the "Letter from the Chairman" set out in this document which contains a recommendation from the Board of the Company that you vote in favour of the Resolutions to be proposed at the EGM referred to below.
This document contains a notice of an extraordinary general meeting of the Company to be held at 2:00 p.m. on 25 February 2020 which is set out at the end of this document. A Form of Proxy for use at the EGM is enclosed with this document. Whether or not you intend to attend the EGM in person, please complete, sign and return the accompanying Form of Proxy in accordance with the instructions printed on it as soon as possible but, in any event, so as to be received by the Company's Registrar at Computershare Investor Services PLC, The Pavilions, Bridgwater Road, Bristol BS99 6ZY to arrive by no later than 2:00 p.m. on 21 February 2020. Alternatively, you may register your proxy appointment and voting instruction electronically at https://www.investorcentre.co.uk/eproxy in accordance with the procedures set out in the notes accompanying the notice of the EGM. If you hold your Ordinary Shares in uncertificated form (i.e. in CREST) you may appoint a proxy by completing and transmitting a CREST Proxy Instruction in accordance with the procedures set out in the CREST Manual so that it is received by Computershare Investor Services PLC (under CREST participant 3RA50) by no later than 2:00 p.m. on 21 February 2020. CREST members may choose to use the CREST electronic proxy appointment service in accordance with the procedures set out in the notes accompanying the notice of the EGM. A summary of the action to be taken by Shareholders is set out in paragraph 3 of the Letter from the Chairman contained in this document. The electronic registration of your proxy appointment, or the return of a completed Form of Proxy or CREST Proxy Instruction will not prevent you from attending the EGM and voting in person (in substitution for your proxy vote) if you wish to do so and are so entitled.
Jefferies International Limited ("Jefferies"), which is authorised and regulated in the United Kingdom by the Financial Conduct Authority ("FCA"), is acting solely for the Company and for no one else in connection with the proposed Initial Issue and Share Issuance Programme and will not be responsible to any person other than the Company for providing the protections afforded to clients of Jefferies or for providing advice in relation to the matters described in this document. This does not exclude or limit any responsibility which Jefferies may have under the FSMA or the regulatory regime established thereunder.
The Company has not been and will not be registered under the U.S. Investment Company Act of 1940, as amended (the "Investment Company Act"). Subject to certain exceptions, this document should not be distributed, forwarded, transferred or be otherwise transmitted to any persons within the United States or to any U.S. Persons.
The proposals in this document are conditional on, amongst other things, the approval of certain of the Resolutions by Shareholders at the EGM.
Capitalised and certain technical terms contained in this document have the meanings set out in Part IV of this document.
This document is dated 10 February 2020.
| FORWARD-LOOKING STATEMENTS 4 | |
|---|---|
| EXPECTED TIMETABLE OF PRINCIPAL EVENTS 5 | |
| LETTER FROM THE CHAIRMAN 6 | |
| DEFINITIONS 13 | |
| NOTICE OF EXTRAORDINARY GENERAL MEETING 17 |
This document contains "forward-looking statements" that are based on estimates and assumptions and are subject to risks and uncertainties. Forward-looking statements are all statements other than statements of historical fact or statements in the present tense, and can be identified by words such as "targets", "aims", "aspires", "assumes", "believes", "estimates", "anticipates", "expects", "intends", "hopes", "may", "outlook", "would", "should", "could", "will", "plans", "potential", "predicts" and "projects" as well as the negatives of these terms and other words of similar meaning. These may include, among other things, statements relating to the intentions, beliefs or current expectations of the Group and/or the Directors concerning the Group's plans or objectives for future operations, products, financial condition and results of operations.
These statements involve estimates, assumptions and uncertainties which could cause actual results to differ materially from those otherwise expressed. The forward-looking statements in this document are made based upon the Company's expectations and beliefs concerning future events affecting the Group and therefore involve a number of known and unknown risks and uncertainties. Such forward-looking statements are based on numerous assumptions regarding the Group's present and future business strategies and the environment in which it will operate, which may prove not to be accurate. The Company cautions that these forward- looking statements are not guarantees and that actual results could differ materially from those expressed or implied in these forward-looking statements. Undue reliance should, therefore, not be placed on such forward-looking statements.
Any forward-looking statements contained in this document apply only as at the date of this document and are not intended to give any assurance as to future results. The Company will update this document as required by applicable law, including the Listing Rules, the Disclosure Guidance and Transparency Rules and the Prospectus Regulation Rules, the rules of the London Stock Exchange and any other applicable law or regulations, but otherwise expressly disclaims any obligation or undertaking to update or revise any forward-looking statements after the date on which the forward-looking statement was made, whether as a result of new information, future developments or otherwise. In light of these risks, uncertainties and assumptions, the events outlined in this document might not occur and actual results may differ materially from those described in the forward-looking statements.
Each of the times and dates in the table below is indicative only and may be subject to change.(1)
| Publication of the Prospectus and Circular | 10 February 2020 |
|---|---|
| Latest time and date for receipt of Forms of Proxy | 2:00 p.m. on 21 February 2020 |
| EGM | 2:00 p.m. on 25 February 2020 |
(1) The times set out in the expected timetable of principal events above and mentioned throughout this document are times in London unless otherwise stated, and may be adjusted by the Company in consultation with or, if required, with the agreement of Jefferies, in which event details of the new times and dates will be notified through the publication of a notice through a Regulatory Information Service and, where appropriate, either by post or electronic mail to Shareholders.
(a company incorporated in Guernsey under the Companies (Guernsey) Law, 2008, (as amended) with registered no. 59596)
Robert Jennings (Chairman) Sandra Platts (Senior Independent Director) Jan Pethick Jonathan Bridel
Directors: Registered Office: Praxis Fund Services Limited Sarnia House Le Truchot St Peter Port Guernsey GY1 1GR Tel: +44 (0)1481 737600 10 February 2020
To Shareholders
Dear Sir or Madam
Recommended proposals to approve: (i) the disapplication of pre-emption rights in respect of the Initial Issue, (ii) the disapplication of pre-emption rights in respect of the Share Issuance Programme and (iii) the ability to offer scrip dividends.
Sequoia Economic Infrastructure Income Fund Limited is a Guernsey-incorporated closed-ended investment company whose Ordinary Shares are traded on the Main Market of the London Stock Exchange. The Company's investment strategy is to provide shareholders with long-term distributions by owning debt exposures to economic infrastructure projects across a diversified range of jurisdictions, sectors and sub-sectors. The Company targets an ongoing dividend equivalent to 6.25 pence per Ordinary Share per annum. To the extent that the Company's NAV per Ordinary Share continues to increase in the near term, the Directors will consider whether it is appropriate to increase the dividend. A further announcement will be made if any changes to the Company's dividend policy are made. No changes to the Company's existing dividend policy are expected to be made ahead of the closing of the Initial Issue (as described below).
The IPO of the Company took place on 3 March 2015, raising gross proceeds of approximately £150 million in an oversubscribed issue. During the course of the next five years, the Company has carried out a further eight equity issues, which have raised in excess of £1.285 billion of gross proceeds. The net proceeds of the IPO and each of the subsequent issues were, after accounting for costs and expenses, substantially invested in accordance with the Company's investment objective and policy.
In addition to the equity which the Company has raised, the Company announced on 6 December 2017 that it had entered into a multi-currency Revolving Credit Facility of £100 million with the option of drawing down an accordion tranche which provided an extra £50 million if required (subject to the satisfaction of certain conditions). On 10 May 2019 the Company agreed a further tranche resulting in the overall size of the Revolving Credit Facility being increased to £200 million. On 13 December 2019 the Company agreed a further tranche, increasing the size of the Revolving Credit Facility to £280 million. The term of the Revolving Credit Facility was for three years, from 6 December 2017 (which has been extended by a year to 6 December 2021) with a borrowing cost of 210 basis points over LIBOR. The Revolving Credit Facility enables the Company to reduce cash drag by buying assets through the use of leverage with the intention to pay this down in the future through the proceeds of equity issuances.
The proceeds of the 2019 Fundraisings were used to repay an aggregate of £306.7 million of drawings under the Revolving Credit Facility in June and September 2019. Since then the Company has used the Revolving Credit Facility to make investments as and when suitable investment opportunities have been identified. As at 7 February 2020 the Company had drawn approximately £225 million under the Revolving Credit Facility.
As at 10 February 2020, the Company is invested in a portfolio which is spread over 74 investments across the UK, Europe, Australia, New Zealand and the U.S. These investments are spread across 8 sectors and 30 sub-sectors (as at 10 February 2020). The Company has been able to deploy proceeds ahead of their deployment targets in relation to the IPO and all subsequent equity issues and, encouragingly, the Investment Adviser continues to see a growing and attractive pipeline of investment opportunities.
Since incorporation the Company has paid an aggregate of 26.125 pence per Ordinary Share in dividends. The Company intends to continue to pay dividends in relation to the Ordinary Shares on a quarterly basis.
The unaudited NAV of the Company was 106.32 pence per Ordinary Share as at 31 December 2019.
On 20 January 2020, the Board announced that it was considering raising new capital in order to repay the amounts drawn on its Revolving Credit Facility and thereafter to invest in further investment opportunities in accordance with the Company's investment policy. The Board values the support provided to it from its existing Shareholders and as such it intends to include a material element of pre-emption in the equity issue. The Company has today announced that it intends to proceed with the Open Offer, Placing and Offer for Subscription for a target issue of £250 million equivalent to 223,214,285 new Ordinary Shares at an issue price of 112.0 pence per Ordinary Share under the Initial Issue. Under the terms of the Open Offer, up to 184,908,574 Ordinary Shares will be made available to existing Qualifying Shareholders on the basis of 2 new Ordinary Shares for every 15 existing Ordinary Shares held. The Board may increase the size of the Initial Issue by up to a maximum of 44,642,857 additional new Ordinary Shares if they, in consultation with Jefferies and the Investment Adviser, believe there is sufficient investor demand and assets available and suitable for investment. Where the size of the Initial Issue is increased above 223,214,285 new Ordinary Shares, the maximum aggregate number of Ordinary Shares available for issuance under the Share Issuance Programme shall be reduced by the amount of such increase. There is no certainty that the maximum number of Ordinary Shares will be issued, even if sufficient demand exists. The Company will seek admission of the new Ordinary Shares to be issued under the Initial Issue to the premium segment of the Official List and to trading on the Main Market. The minimum net proceeds of the Initial Issue are £100 million. The costs of the Initial Issue borne by the Company are expected to be approximately 1.4 per cent. of the Gross Issue Proceeds assuming a £250 million equity raise. Further details of the Initial Issue are included in the Prospectus. The Investment Adviser is confident any net proceeds of the Initial Issue (including any reallocation from the Share Issuance Programme) after the repayment of the Revolving Credit Facility will be deployed shortly after Initial Admission.
The Company also intends to put in place a share issuance programme with the flexibility to issue up to a further 300 million Ordinary Shares (less any Ordinary Shares reallocated to the Initial Issue) at an issue price calculated by reference to the prevailing Net Asset Value per Ordinary Share at the time of issue together with a premium. The Share Issuance Programme is flexible and may have a number of closing dates in order to provide the Company with the ability to issue Ordinary Shares on appropriate occasions over a period of time. The Share Issuance Programme is intended to satisfy market demand for the Ordinary Shares and to raise further money for investment in accordance with the Company's investment policy.
The net proceeds of the Share Issuance Programme are dependent on the number of Ordinary Shares issued pursuant to the Share Issuance Programme. On the assumption that the Company issues the maximum number of Ordinary Shares available for issue under the Share Issuance Programme at an average price, for illustrative purposes only, of 112.0 pence per Ordinary Share, the gross proceeds from the Share Issuance Programme will be approximately £336 million and the expenses payable by the Company in relation to the Share Issuance Programme including the costs of establishment and publication of the documentation of the Share Issuance Programme, fees and commissions and registration and Share Issuance Programme Admission fees are estimated at approximately £3.5 million, resulting in net proceeds of approximately £332.5 million.
Accordingly and in compliance with the Companies Law and the Listing Rules, the Board is seeking Shareholder approval in connection with certain matters relating to the proposed Initial Issue and Share Issuance Programme. An EGM of the Company is being convened at which Shareholders will be asked to approve:
(A) the disapplication of pre-emption rights in respect of up to 223,214,285 Ordinary Shares for the purposes of the Initial Issue ("Resolution 1"); and
(B) the disapplication of pre-emption rights in respect of up to 300,000,000 Ordinary Shares for the purposes of the Share Issuance Programme ("Resolution 2").
The proposed Initial Issue is conditional upon, amongst other things, the Company obtaining Shareholders' approval of Resolution 1. The proposed Share Issuance Programme is conditional upon, amongst other things, the Company obtaining Shareholders' approval of both Resolution 1 and Resolution 2.
The new Ordinary Shares to be issued pursuant to the Initial Issue will have the rights attaching to the Ordinary Shares and will rank pari passu with the outstanding Ordinary Shares in issue on the date the new Ordinary Shares are issued. For the avoidance of doubt, the new Ordinary Shares to be issued pursuant to the Initial Issue will carry rights to any dividend in respect of the quarter ending 31 March 2020 which will be declared in April 2020, after the closing of the Initial Issue.
The Board is seeking Shareholder approval to implement a scrip dividend scheme. This scheme will allow the Company, subject to such terms and conditions as the Board may determine, to offer to any holders of Ordinary Shares (excluding any member holding Ordinary Shares as treasury shares) the right to elect to receive Ordinary Shares credited as fully paid, instead of cash in respect of the whole (or some part to be determined by the Directors), of any dividend. The Directors believe that the ability for Shareholders to elect to receive future dividends from the Company wholly or partly in the form of new Ordinary Shares rather than in cash is likely to benefit both the Company and certain Shareholders. The Company would benefit from the ability to retain cash which would otherwise be paid as dividends. Shareholders who qualify can also increase their shareholdings in the Company without incurring dealing costs or paying stamp duty reserve tax. Furthermore the Board has been advised that under current UK law and HM Revenue & Customs practice, certain UK-resident Shareholders may be able to treat Scrip Dividend Shares as capital for tax purposes.
The decision whether to offer such a scrip dividend alternative in respect of any dividend will be made by the Directors at the time the relevant dividend is declared. In order to have the flexibility to offer scrip dividends and in compliance with the Companies Law and the Listing Rules, Shareholder approval is being sought to offer to any holders of Ordinary Shares (excluding any member holding Ordinary Shares as treasury shares) the right to elect to receive Ordinary Shares credited as fully paid, instead of cash in respect of the whole (or some part to be determined by the Directors) of all or any dividends declared or paid during the period from the date here of and ending prior to the date of the annual general meeting of the Company to be held in 2022, on such terms as the Directors may determine ("Resolution 3").
Further details about any available scrip dividend alternative will be provided to Shareholders at the time of declaration of dividends.
The proposed Initial Issue and the proposed Share Issuance Programme are not conditional on the passing of Resolution 3.
The purpose of this document is to provide Shareholders with details of, and to seek Shareholder approval for, the Resolutions. This document includes a notice of the EGM to be held at 2:00 p.m. on 25 February 2020 at Sarnia House, Le Truchot, St Peter Port, Guernsey, GY1 1GR.
The Investment Adviser continues to see significant opportunities in the economic infrastructure debt market. The Board believes that it would be in the interests of the Company to raise further funds to take advantage of these opportunities. Specifically, the Directors believe that the Initial Issue will have the following benefits:
The Directors believe that the Investment Adviser has developed a strong presence in the economic infrastructure debt market through its activity since the inception of the Company as well as its prior experience in the sector. The economic infrastructure market is a large market and in 2018 was estimated to be approximately 14.8 times larger than the social infrastructure market.
By investing in debt, as opposed to equity of economic infrastructure projects, the Investment Adviser is able to focus on projects that have an equity cushion of typically at least 20 per cent.. The Directors believe that this provides the Group with a lower risk profile than equity infrastructure investments. However the Group is still able to access investments with "equity-like" infrastructure return profiles. The current yield to maturity (or Yield to Worst) on the existing portfolio is approximately 8.2 per cent. as at 31 December 2019. The Investment Adviser has identified potential near-term investments with a total value in excess of £380 million.
The Share Issuance Programme is being created to provide the Company with flexibility should it wish to raise further capital as new investment opportunities arise over the next 12 months to either repay any future drawn down funds under the Revolving Credit Facility or to directly invest in new investment opportunities. The Directors believe that instituting the Share Issuance Programme and the ability to issue further Ordinary Shares under it will:
There are risks associated with the Initial Issue and the Share Issuance Programme. The Directors believe that the key risks relating to the Initial Issue and the Share Issuance Programme include the following:
(A) the percentage holding of an existing Shareholder will be diluted to the extent that they do not participate in the Initial Issue and/or the Share Issuance Programme. Where a Shareholder does not participate in the Placing or in the Offer for Subscription and the Initial Issue is fully subscribed but the Shareholder: (i) takes up his full entitlement under the Open Offer assuming the target Initial Issue size, the dilution of the percentage holding for an existing Shareholder would be approximately 2.4 per cent.; or (ii) does not participate in the Open Offer, such an existing Shareholder's percentage holding will be diluted by approximately 13.9 per cent. assuming the target Initial Issue size. Where 223,214,285 Ordinary Shares are issued under the Initial Issue and 300,000,000 Ordinary Shares are issued under the Share Issuance Programme (being the maximum number of Ordinary Shares available under the Share Issuance Programme), and a Shareholder does not participate in the Initial Issue or the Share Issuance Programme, there would be a dilution of approximately 27.4 per cent. in such Shareholder's voting control of the Company;
The Resolutions require the approval of Shareholders at the EGM. In order to be passed, the Resolutions to be proposed as:
• an ordinary resolution at the EGM will require the approval of Shareholders representing over 50 per cent. of the votes cast at the EGM; and
special resolutions at the EGM will require the approval of Shareholders representing at least 75 per cent. of the votes cast at the EGM.
The Articles contain pre-emption rights in respect of the allotment or sale for cash of "equity securities" (which include Ordinary Shares or rights to subscribe for or to convert securities into Ordinary Shares), which can be disapplied by way of a special resolution. The pre-emption rights have been disapplied up to an aggregate amount not exceeding 10 per cent. of the Ordinary Shares in issue at the annual general meeting in 2019 until the conclusion of the next annual general meeting of the Company in 2020 (the "General Disapplication"), of which a substantial part was used in connection with the placing of new Ordinary Shares by the Company which completed on 24 September 2019. The Directors intend to request that the authority to allot a specified amount of Ordinary Shares from time to time is renewed at the next annual general meeting of the Company and, thereafter, at each annual general meeting of the Company.
Resolution 1 proposes that the pre-emption rights are disapplied in accordance with the Articles in respect of up to 223,214,285 Ordinary Shares in respect of the Initial Issue and Resolution 2 proposes that the pre-emption rights are disapplied in accordance with the Articles in respect of up to 300,000,000 Ordinary Shares in respect of the Share Issuance Programme. For the avoidance of doubt, this authority is additional to and exclusive of the General Disapplication.
The Directors confirm that up to 223,214,285 Ordinary Shares shall be allocated to the Initial Issue (plus the option to re-allocate up to 44,642,857 Ordinary Shares from the Share Issuance Programme to the Initial Issue if the Initial Issue is oversubscribed). The Resolutions will not affect the General Disapplication.
Notwithstanding the disapplication of pre-emption rights, the Directors recognise the importance of existing Shareholders' protections and consequently the Initial Issue is being structured to include a material element of pre-emption via the Open Offer on the basis of 2 new Ordinary Shares for every 15 existing Ordinary Shares.
As indicated above, Resolution 2 proposes that the pre-emption rights are disapplied in accordance with
the Articles in respect of up to 300,000,000 Ordinary Shares. The Directors confirm that up to 300,000,000 Ordinary Shares (less any Ordinary Shares reallocated to the Initial Issue up to a maximum of 44,642,857 Ordinary Shares) shall be allocated to the Share Issuance Programme.
The allotment of Ordinary Shares pursuant to the Share Issuance Programme is at the discretion of the Directors and may take place at any time prior to the final closing date of 9 February 2021. If any issuance under the Share Issuance Programme takes the form of a Further Placing, an announcement in respect of the relevant placing of Ordinary Shares will be released through a Regulatory Information Service, including details of the number of Ordinary Shares issued and the applicable issue price. If any issuance under the Share Issuance Programme takes the form of an open offer or offer for subscription, the Company will be required to publish a Future Securities Note and Future Summary.
Both the Initial Issue and any issues under the Share Issuance Programme will be NAV accretive.
Resolution 3 seeks Shareholder approval to offer to any holders of Ordinary Shares (excluding any member holding Ordinary Shares as treasury shares) the right to elect to receive Ordinary Shares credited as fully paid, instead of cash in respect of the whole (or some part to be determined by the Directors) of all or any dividends declared or paid during the period from the date here of and ending prior to the date of the annual general meeting of the Company to be held in 2022, on such terms as the Directors may determine.
Further details about any available scrip dividend alternative will be provided to Shareholders at the time of declaration of dividends.
The proposed Initial Issue and the proposed Share Issuance Programme are not conditional on the passing of Resolution 3.
Whether or not you intend to attend the EGM, you should ensure that your Form of Proxy (enclosed with this document) is returned to the Registrar, by one of the following means:
In each case, the Form of Proxy must be received by the Company not less than 48 hours before the time for holding of the EGM. In calculating such 48 hour period, no account shall be taken of any part of a day that is not a Business Day. To be valid, the relevant Form of Proxy should be completed in accordance with the instructions accompanying it and lodged with the Registrar by the relevant time.
Completion and return of the Form of Proxy will not affect a Shareholder's right to attend, speak and vote at the EGM.
A quorum consisting of at least two Shareholders holding five per cent. of the total voting rights of the Company present in person or by proxy is required for the EGM.
The notice convening the EGM is set out on pages 17 to 19 of this document.
Copies of the Articles and the Prospectus are available for inspection at: (i) the registered office of the Company at Sarnia House, Le Truchot, St Peter Port, Guernsey, GY1 1GR; and (ii) the offices of CMS Cameron McKenna Nabarro Olswang LLP, 78 Cannon Street, London, EC4N 6AF, during normal business hours on any Business Day from the date of this document until the conclusion of the EGM, and at the place of the EGM for at least 15 minutes prior to, and during, the EGM.
Application will be made for the Ordinary Shares to be issued pursuant to the Initial Issue to be admitted to the premium segment of the Official List and to trading on the Main Market for listed securities of the London Stock Exchange. The Prospectus containing further details of the Initial Issue has been published on the Company's website on www.seqifund.com. It is currently expected that Initial Admission will become effective, and dealings in the new Ordinary Shares issued pursuant to the Initial Issue will commence, on 3 March 2020.
Applications will be made for any Ordinary Shares issued pursuant to the Share Issuance Programme to be admitted to the premium segment of the Official List and to trading on the Main Market of the London Stock Exchange. It is expected that any such Admissions will occur, and that dealings in the Ordinary Shares will commence, not later than 9 February 2021.
The Board considers that the Proposals and the Resolutions are in the best interests of the Company and its Shareholders as a whole. The Board accordingly recommends that Shareholders vote in favour of the Resolutions to be proposed at the EGM. You are therefore urged to complete and return your Form of Proxy without delay, whether or not you intend to attend the EGM.
The proposed Initial Issue is conditional upon, amongst other things, the Company obtaining Shareholders' approval of Resolution 1. The proposed Share Issuance Programme is conditional upon, amongst other things, the Company obtaining Shareholders' approval of both Resolution 1 and Resolution 2. The proposed Initial Issue and the proposed Share Issuance Programme are not conditional on the passing of Resolution 3.
Yours faithfully,
Robert Jennings Chairman
| "£" and "p" | respectively means pounds and pence Sterling; |
|---|---|
| "2019 Fundraisings" | means the placing, open offer and offer for subscription of new Ordinary Shares by the Company which completed on 27 June 2019 and the placing of new Ordinary Shares by the Company which completed on 24 September 2019; |
| "Admission" | means admission of any further Ordinary Shares to be issued pursuant to the Share Issuance Programme to the Premium Listing segment of the Official List and to trading on the Main Market ; |
| "Application Form" | means the personalised application form for use by Qualifying Shareholders (who hold their Ordinary Shares in certificated form only) in connection with the Open Offer, which will form part of the Prospectus; |
| "Articles" | means the articles of incorporation of the Company as amended from time to time; |
| "Board" or "Directors" | means the board of directors of the Company; |
| "Business Day" | means any day (other than a Saturday or Sunday) on which commercial banks are open for business in London and Guernsey; |
| "Circular" | means this document, which constitutes a circular in accordance with the Listing Rules; |
| "Companies Law" | means the Companies (Guernsey) Law, 2008 (as amended); |
| "Company" | means Sequoia Economic Infrastructure Income Fund Limited, a company incorporated in Guernsey under the Companies Law with registered no. 59596; |
| "CREST" | means the computerised settlement system operated by Euroclear UK and Ireland Limited which facilitates the transfer of title to shares in uncertificated form; |
| "CREST Proxy Instruction" | means a proxy appointment or instruction made using CREST; |
| "Disclosure Guidance and Transparency Rules" |
means the Disclosure Guidance and Transparency Rules (as amended from time to time) made by the FCA under Part VI of the FSMA; |
| "EGM" | means the extraordinary general meeting of the Company to be held at Sarnia House, Le Truchot, St Peter Port, Guernsey, GY1 1GR at 2:00 p.m. on 25 February 2020 (or any adjournment thereof), notice of which is set out at the end of this document; |
| "Excluded Shareholders" | means, subject to certain exceptions, Shareholders who have a registered address in, who are incorporated in, registered in or otherwise resident or located in any Excluded Territory; |
| "Excluded Territory" | means Canada, Japan, Australia, New Zealand, the Republic of South Africa and (subject to certain exceptions) the U.S. and any jurisdiction where the extension or availability of the Initial Issue (and any other transaction contemplated thereby) would breach any applicable laws or regulations, and "Excluded Territories" shall mean any of them; |
| "Financial Conduct Authority" or "FCA" |
means the Financial Conduct Authority of the United Kingdom in its capacity as the competent authority for the purposes of the FSMA; |
| "Form of Proxy" | means the form of proxy enclosed with this document for use by Shareholders at the EGM; |
| "FSMA" | means the Financial Services and Markets Act 2000 of the United Kingdom, as amended; |
|---|---|
| "Further Placing" | means a placing (other than the Placing) which is made pursuant to a Placing-Only Issue; |
| "Future Securities Note" | means a securities note to be issued in the future by the Company in respect of each issue, if any, of Ordinary Shares (other than pursuant to the Initial Issue or a Placing-Only Issue) pursuant to the Share Issuance Programme made pursuant to the Registration Document and subject to separate approval by the FCA; |
| "Future Summary" | means a summary to be issued in the future by the Company in respect of each issue, if any, of Ordinary Shares (other than pursuant to the Initial Issue or a Placing-Only Issue) pursuant to the Share Issuance Programme made pursuant to this Registration Document and subject to separate approval by the FCA; |
| "Gross Issue Proceeds" | means the aggregate value of the Ordinary Shares issued under the Initial Issue at the Issue Price; |
| "Group" | means the Company and the Subsidiary; |
| "Initial Admission" | means admission of the new Ordinary Shares issued pursuant to the Initial Issue; |
| "Initial Issue" | means the Open Offer, Placing and Offer for Subscription pursuant to the issue of up to a maximum of 223,214,285 new Ordinary Shares on the terms set out in the Securities Note; |
| "IPO" | means the admission of 150 million Ordinary Shares to the premium segment of the Official List and admission to trading on the Main Market which took place on 3 March 2015; |
| "Issue Price" | means 112.0 pence per Ordinary Share; |
| "Investment Adviser" | means Sequoia Investment Management Company Limited, a limited liability company incorporated in England and Wales (registered number: 05902847) with registered address 11-13 Market Place, London, W1W 8AH; |
| "Investment Policy" | means the Group's investment policy; |
| "Investments" | means investments made by the Group in accordance with the Investment Policy; |
| "Jefferies" | means Jefferies International Limited; |
| "Listing Rules" | means the Listing Rules made by the FCA under section 73A of the FSMA; |
| "London Stock Exchange"" | means London Stock Exchange PLC; |
| "Main Market" | means the London Stock Exchange's Main Market for listed securities; |
| "NAV" or "Net Asset Value" | means the unaudited value of the assets of the Company less its liabilities as determined in accordance with the procedure determined by the Directors or such other procedure as may be determined by the Directors from time to time and, where the context requires, the part of that amount attributable to a particular class of shares; |
| "Offer for Subscription" | means the proposed offer for subscription to the public in the UK of new Ordinary Shares at the Issue Price forming part of the Initial Issue; |
| "Official List" | means the official list of the FCA; |
| "Open Offer" | means the proposed conditional offer to Qualifying |
| Shareholders, constituting an invitation to apply for new Ordinary Shares at the Issue Price and otherwise on the terms and subject to the conditions set out in the Securities Note and, in the case of those Qualifying Shareholders who hold their Ordinary Shares in certificated form only, the Application Form; |
|
|---|---|
| "Ordinary Share" | means an ordinary share of no par value in the capital of the Company carrying the rights and obligations set out in the Articles; |
| "Placing" | means the proposed placing of new Ordinary Shares at the Issue Price forming part of the Initial Issue; |
| "Placing-Only Issue" | means an issue under the Share Issuance Programme which comprises only a placing and does not include an offer for subscription or an open offer component; |
| "Premium Listing" | means a listing on the Official List which complies with the requirements of the Listing Rules for a premium listing; |
| "Proposals" | means the recommended proposals by the Board to: (i) approve the disapplication of pre-emption rights in respect of, up to 223,214,285 Ordinary Shares for the purposes of the Initial Issue; (ii) approve the disapplication of pre-emption rights in respect of, up to 300,000,000 Ordinary Shares for the purposes of the Share Issuance Programme; and (iii) approve the ability to offer scrip dividends; |
| "Prospectus" | means the Registration Document, the Securities Note (or a Future Securities Note), the Summary (or a Future Summary) which together comprise a prospectus relating to the Company in accordance with the Prospectus Regulation Rules published in connection with the Initial Issue and Share Issuance Programme on 10 February 2020; |
| "Prospectus Regulation Rules" | means the rules made for the purposes of Part VI of the FSMA in relation to offers of securities to the public and admission of securities to trading on a regulated market; |
| "Qualifying Shareholders" | means holders of Ordinary Shares in the Company as at a date shortly before publication of, and to be set out in, the Prospectus, with the exclusion of Excluded Shareholders; |
| "Registrar" | means Computershare Investor Services (Guernsey) Limited or such other person or persons from time to time appointed by the Company; |
| "Registration Document" | means the registration document dated 10 February 2020 approved by the FCA and issued by the Company in respect of the issue of the Ordinary Shares to which the Securities Note relates and any issue of Ordinary Shares under the Share Issuance Programme in connection with a Future Securities Note; |
| "Regulatory Information Service" or "RIS" |
means a regulated information service approved by the FCA and on the list of Regulatory Information Services maintained by the FCA; |
| "Resolution 1" | has the meaning given in paragraph 1 of the Letter from the Chairman contained in this Circular; |
| "Resolution 2" | has the meaning given in paragraph 1 of the Letter from the Chairman contained in this Circular; |
| "Resolution 3" | has the meaning given in paragraph 1 of the Letter from the Chairman contained in this Circular; |
| "Resolutions" | means Resolution 1, Resolution 2 and Resolution 3; |
|---|---|
| "Revolving Credit Facility" | means the multi-currency revolving credit facility dated 6 December 2017 pursuant to which the Royal Bank of Scotland, ING Bank and Investec as lenders have made £280,000,000 available to the Company for a term of three years as subsequently amended; |
| "Scrip Dividend Shares" | has the meaning given in paragraph 1 of the Letter from the Chairman contained in this Circular; |
| "Securities Note" | means the securities note dated 10 February 2020 approved by the FCA and issued by the Company in respect of the issue of the Ordinary Shares under the Initial Issue; |
| "Shareholders" | means any holders of Shares in the Company from time to time; |
| "Share Issuance Programme" | means the share issuance programme of up to 300 million Ordinary Shares (less any Ordinary Shares reallocated to the Initial Issue up to a maximum of 44,642,857 Ordinary Shares) as described in Part 2 of the Securities Note; |
| "Shares" | means any shares issued by the Company from time to time (and including the Ordinary Shares); |
| "Sterling" or "£" | means the current lawful currency of the United Kingdom; |
| "Subsidiary" | means Sequoia IDF Asset Holdings S.A., a société anonyme incorporated under the laws of the Grand Duchy of Luxembourg and subject to, as an unregulated securitisation entity, the Securitisation Act 2004, having its registered office at 46A Avenue J.F. Kennedy, L-1855, Luxembourg, Grand Duchy of Luxembourg, registered with the Luxembourg Register of Commerce and Companies under number B-165.989; |
| "Summary" | means the summary dated 10 February 2020 issued by the Company in respect of Ordinary Shares made available pursuant to the Initial Issue and the Share issuance Programme and approved by the FCA; |
| "UK" or "United Kingdom" | means the United Kingdom of Great Britain and Northern Ireland; |
| "U.S." or "United States" | means the United States of America, its territories, possessions, any state of the United States and the District of Columbia; |
| "U.S. Person" | has the meaning given in Regulation S promulgated under the U.S. Securities Act of 1933, as amended; |
| "Yield to Worst" | means, for bonds with call dates, the lowest of the yield-to-call rates for each call date and the yield to maturity. |
(a company incorporated in Guernsey under the Companies (Guernsey) Law, 2008 (as amended) with registered no. 59596)
NOTICE IS HEREBY GIVEN that an extraordinary general meeting of the Sequoia Economic Infrastructure Income Fund Limited (the "Company") will be held at Sarnia House, Le Truchot, St Peter Port, Guernsey, GY1 1GR at 2:00 p.m. on 25 February 2020 to consider and, if thought fit, pass the following resolutions. Resolutions 1 and 2 will be proposed as special resolutions and resolution 3 will be proposed as an ordinary resolution. Defined terms in this notice will have the meaning given to them in the circular to shareholders published by the Company on 10 February 2020 ("Circular"), a copy of which has been produced to this meeting and initialled by the Chairman for the purposes of identification.
(3) THAT in accordance with Article 31A of the current Articles of Incorporation of the Company, the Directors be and are hereby authorised to offer to any holders of Ordinary Shares (excluding any member holding Ordinary Shares as treasury shares) the right to elect to receive Ordinary Shares credited as fully paid, instead of cash in respect of the whole (or some part to be determined by the Directors) of all or any dividends declared or paid during the period from the date hereof and ending prior to the date of the annual general meeting of the Company to be held in 2022, on such terms as the Directors may determine.
Registered Office
:
Praxis Fund Services Limited
Sarnia House Le Truchot St Peter Port Guernsey GY1 1GR
Date: 10 February 2020
Proxies
In the case of joint holders, any one holder may vote. If more than one holder is present at the meeting, only the vote of the senior will be accepted, seniority being determined in the order in which the names appear on the register of shareholders of the Company.
CREST sponsor or voting service provider takes) such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any particular time. In this connection, CREST members and, where applicable, their CREST sponsors or voting service providers are referred, in particular, to those sections of the CREST Manual concerning limitations of the CREST system and timings. The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 34 of the Uncertificated Securities (Guernsey) Regulations 2009.
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