Delisting Announcement • Jan 30, 2025
Delisting Announcement
Open in ViewerOpens in native device viewer
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. IT CONTAINS PROPOSALS RELATING TO DOWNING STRATEGIC MICRO-CAP INVESTMENT TRUST PLC (THE "COMPANY") ON WHICH YOU ARE BEING ASKED TO VOTE. If you are in any doubt as to the contents of this document or the action you should take, you are recommended to immediately seek your own independent financial advice from your stockbroker, bank manager, solicitor, accountant or other appropriately qualified independent financial adviser authorised under the Financial Services and Markets Act 2000 (as amended) ("FSMA") if you are in the United Kingdom, or from another appropriately authorised independent financial adviser if you are in a territory outside of the United Kingdom. All Shareholders are advised to consult their professional advisers regarding their own tax position.
If you sell or transfer, or have sold, transferred or otherwise disposed of all of your Shares in the Company, please send this document, but not the accompanying personalised Form of Proxy, as soon as possible to the purchaser or transferee, or to the stockbroker, bank or other agent through whom the sale, transfer or disposal was effected for onward transmission to the purchaser or transferee, except that such documents should not be forwarded, distributed or transmitted in or into any jurisdiction under any circumstances where to do so might constitute a violation of the relevant securities laws and regulations in such jurisdiction. If you have sold, transferred or otherwise disposed of only part of your holding of Shares in the Company, you should retain this document and the accompanying personalised Form of Proxy and contact immediately the stockbroker, bank or other agent through whom you effected the sale, transfer or disposal.
(Incorporated and registered in England and Wales under the Companies Act 2006 with registered number 10626295)
and
Notice of a general meeting of the Company to be held at the offices of Dickson Minto LLP, Dashwood House, 69 Old Broad Street, London EC2M 1QS on 21 February 2025 at 10.00 a.m. (the "General Meeting") is set out at the end of this document.
This document should be read in its entirety. Nevertheless, your attention is drawn, in particular, to the letter from the Chairman of the Company, which contains a recommendation that you vote in favour of the Resolution in relation to the members' voluntary liquidation of the Company to be proposed at the General Meeting.
Capitalised terms used throughout this document shall have the meanings ascribed to them in Part 2 of this document, unless the context otherwise requires.
The contents of this document should not be construed as legal, financial or tax advice. Each Shareholder should consult their own legal, financial or tax adviser for legal, financial or tax advice (as appropriate).
Whether or not you intend to be present at the General Meeting, you are requested to complete, sign and return the Form of Proxy for use in connection with the General Meeting which accompanies this document. To be valid, the Form of Proxy must be completed and signed in accordance with the instructions printed thereon and delivered to the Company's registrar, Computershare Investor Services PLC (the "Registrar"), at The Pavilions, Bridgwater Road, Bristol BS99 6ZY as soon as possible and, in any event, so as to arrive not later than 10.00 a.m. on 19 February 2025 (or, in the case of any adjournment of the General Meeting, not later than 48 hours (excluding non-Business Days) before the time fixed for the holding of the adjourned meeting).
Alternatively, you may submit your proxy electronically by using the following link and the details provided on the Form of Proxy: www.investorcentre.co.uk/eproxy. Proxies submitted electronically must be transmitted so as to be received by the Registrar by no later than 10.00 a.m. on 19 February 2025 (or, in the case of any adjournment of the General Meeting, not later than 48 hours (excluding non-Business Days) before the time fixed for the holding of the adjourned meeting).
If you hold Shares in CREST you may also appoint a proxy by completing and transmitting a CREST Proxy Instruction to the Registrar (CREST participant ID 3RA50) in accordance with the procedures set out in the CREST Manual. Alternatively, you may give proxy instructions by logging onto www.euroclear.com and following the instructions. Proxies sent electronically through CREST must be sent as soon as possible and, in any event, so as to be received not later than 10.00 a.m. on 19 February 2025 (or, in the case of any adjournment of the General Meeting, not later than 48 hours (excluding non-Business Days) before the time fixed for the holding of the adjourned meeting).
The completion and return of a Form of Proxy (or the electronic appointment of a proxy) will not prevent Shareholders from attending and voting in person at the General Meeting, or any adjournment thereof, if you wish to do so and are so entitled.
This document should be read as a whole and your attention is drawn, in particular, to the section titled "Action to be taken" on pages 9 and 10 of this document.
It is important that you complete and return the Form of Proxy, appoint a proxy or proxies electronically or use the CREST electronic voting service in the manner referred to above as soon as possible.
| Last day of dealings in the Shares through CREST on a normal rolling two day settlement basis |
18 February 2025 |
|---|---|
| Deadline for receipt of Forms of Proxy | 10.00 a.m. on 19 February 2025 |
| Close of Register and record date for participation in the members' voluntary liquidation |
6.00 p.m. on 20 February 2025 |
| Suspension of Shares from listing on the Official List and from trading on the London Stock Exchange |
7.30 a.m. on 21 February 2025 |
| General Meeting | 10.00 a.m. on 21 February 2025 |
| Appointment of Liquidators | 21 February 2025 |
| Initial Distribution to Shareholders* | Week commencing 3 March 2025 |
* Actual date to be determined by the Liquidators.
All references to time in this document are to London (UK) time, unless otherwise stated.
The times and/or dates set out in the expected timetable above and mentioned throughout this document may be subject to change and, in the event of such change, the revised times and/or dates will be notified to Shareholders by an announcement through a Regulatory Information Service.
(Incorporated and registered in England and Wales under the Companies Act 2006 with registered number 10626295)
Teignmouth TQ14 8SY
29 January 2025
Dear Shareholder
In the Company's 2023 Half Year Report, which was released on 9 November 2023, your Board described that it had been a dispiriting time for micro-cap stocks and, as a result, for the Company, and that your Board had therefore taken a blunt decision to start a return of capital earlier in 2024 than had originally been anticipated. It was further reported that, despite modest buy-back activity, in the 6 month period covered by the 2023 Half Year Report, the Shares traded at a discount of around 15 per cent. to 17 per cent. to the Company's NAV per Share, and given the market's continued undervaluation of both micro-cap stocks and small investment companies (demonstrated, in part, by the Company's Share price discount to NAV) your Board had concluded that it would advantage all Shareholders equally and fairly to commence a managed wind-down of the Company's investment portfolio (the "Managed Wind-Down").
Such a material change to the Company's investment policy required Shareholder approval and, after consultation with major Shareholders, the Company published a shareholder circular on 2 February 2024 that: (i) provided Shareholders with the background to your Board's decision and the expected realisation timeframe; and (ii) set out the Managed Wind-Down investment policy (the "New Investment Policy") in full. The ordinary resolution to adopt the New Investment Policy was proposed at a general meeting of the Company held on 28 February 2024 and received overwhelming support from Shareholders, with 86.58 per cent. of the votes cast (amounting to 41.23 per cent. of the Company's issued Share capital) voting in favour.
Since the adoption of the New Investment Policy, the realisation of the Company's portfolio by Downing LLP (the "Investment Manager") has been proceeding well: Shareholders have already received a series of special dividends of, in aggregate, 63.9 pence per Share, and the Company's remaining portfolio comprises just one listed investment in Centaur Media plc, a secured loan note in Real Good Food plc and cash. As a result, as at 24 January 2025, the Company's NAV was approximately £2.32 million. Seeking to obtain the best achievable value for Shareholders, the Investment Manager has not yet realised the Company's investment in Centaur Media plc due to indications of strategic action by the management team.
Your Board now seeks the most effective way to return cash to Shareholders and limit further costs. With the Company's portfolio significantly reduced and the special dividends paid, your Board has determined that it is now the appropriate time to put proposals to Shareholders to undertake a members' voluntary liquidation of the Company (the "Proposals"), which will eliminate certain of the costs associated with running a listed vehicle. The purpose of this document is therefore to provide Shareholders with further details of the Proposals and to convene the General Meeting at which Shareholders will be asked to approve the Proposals.
The General Meeting will be held at the offices of Dickson Minto LLP, Dashwood House, 69 Old Broad Street, London EC2M 1QS on 21 February 2025 at 10.00 a.m. The Resolution that Shareholders will be asked to consider and vote on at the General Meeting is set out in the Notice of General Meeting at pages 15 to 18 (inclusive) of this document.
Your Board has determined that it would be in the best interests of the Company and Shareholders as a whole to have the Company enter into members' voluntary liquidation. This requires the approval of Shareholders by way of a special resolution (the "Resolution") at the General Meeting. As the Resolution will be proposed as a special resolution, it will be passed if at least 75 per cent. of the votes are cast in favour.
In summary, the Resolution relates to the approval of the Company being wound up voluntarily and the appointment of the Liquidators for the purpose of the winding up. It grants the Liquidators authority to make distributions in cash to Shareholders (after payment of the Company's liabilities and after deducting the costs of the implementation of the Company's winding up), in proportion to their holdings of Shares in accordance with the provisions of the Articles. It also grants the Liquidators authority to exercise certain powers laid down in the Insolvency Act 1986 and determines the remuneration of the Liquidators by reference to the time spent attending to matters.
As to the Liquidators, it is proposed that Derek Neil Hyslop and Richard Peter Barker, both licensed insolvency practitioners of Ernst & Young LLP, be appointed as joint liquidators of the Company (the "Liquidators"), whose remuneration shall be determined by the Company. The appointment of the Liquidators becomes effective immediately upon the passing of the Resolution at the General Meeting. At this point, the powers of the Directors will cease and the Liquidators will assume responsibility for the winding up of the Company, including the realisation of its remaining assets, the payment of fees, costs and expenses, the discharging of liabilities of the Company and the distribution of its surplus assets to Shareholders. The winding up of the Company will be a solvent winding up, in which it is intended that all creditors will be paid in full. Once the Company's remaining assets have been realised by the Liquidators (and after settling the Company's liabilities and providing for the costs of the winding up), the cash proceeds will be distributed to Shareholders as set out in the section titled "Distributions to Shareholders" below.
To facilitate the implementation of the Proposals, the Shares will be suspended from listing on the Official List and from trading on the London Stock Exchange with effect from 7.30 a.m. on 21 February 2025, being the date of the General Meeting.
If the Resolution is passed, the Company's Shares are expected to remain suspended from listing until, at least, after the payment of the Initial Distribution and, as such, should continue to be "qualifying investments" for ISA purposes. Shareholders are strongly recommended to consult their professional advisers regarding their own tax position and their own ISA provider in advance of the General Meeting.
Due to the nature of the Company's remaining investments and the Investment Manager's expertise and intimate knowledge of such investments, the Board believes it is vital that the Investment Manager's services be retained during the liquidation period in order to maximise the return of value to Shareholders whilst ensuring this is done in a timely manner.
Accordingly, the Investment Manager has agreed that, subject to the passing of the Resolution at the General Meeting, it will not exercise its right to terminate the current Investment Management Agreement as a result of the Company entering into members' voluntary liquidation (which it would otherwise be entitled to do) and that it will continue to manage the Company on the terms of the Investment Management Agreement (adjusted as necessary so as to reflect the fact that the Company will be in liquidation).
If the Resolution is not passed, your Board would assess the options available to the Company at that time. However, on the basis that the Company will continue to have distributable reserves, your Board anticipates that distributions would likely continue by way of dividends. Additionally the panoply of requirements of running a listed company, such as regulatory costs, listing fees, the costs of producing and publishing annual reports and audited financial statements, brokers' fees and directors' fees, amongst others, would continue. The entire weight and costs of these requirements would ultimately fall on Shareholders. It is therefore your Board's view that the Proposals would ensure the valuemaximisation of cash returned to Shareholders.
On 9 May 2022, your Board announced its intention to provide Shareholders with a significant redemption opportunity in May 2024 (the "Redemption Opportunity"). Disappointingly, following this announcement the market continued to undervalue micro-cap stocks, the Company's Shares continued to trade at a material discount (despite a buyback programme) and the Company did not attract significant new investors despite the Board's considerable efforts. At the time, this was a state of affairs not uncommon in the micro-cap sector.
As set out above, having discussed the Company's future with the Investment Manager and the Company's advisers, your Board determined that, instead of providing Shareholders with the Redemption Opportunity, it would be in the best interests of all Shareholders (treating them fairly and equally) to commence the Managed Wind-Down, and the proposal to implement the New Investment Policy was approved by an overwhelming majority of Shareholders who voted at the general meeting held on 28 February 2024.
Your Board believes the Investment Manager has successfully implemented the Managed Wind-Down mandate, returning, by way of special dividends, 63.9 pence per Share which represents: (i) 97.92 per cent. of the Company's NAV per Share of 65.26 pence; and (ii) a premium of 4.33 per cent. to the Company's closing Share price of 61.25 pence, each as at 28 February 2024 (being the date on which the Managed Wind-Down was approved). The Company's NAV per Share as at 24 January 2025 was 5.08 pence.
However, your Board's subsequent proposal to return capital to Shareholders through a tax efficient B share scheme (the "B Share Scheme"), which was announced on 8 March 2024, was blocked by one new Shareholder – Milkwood Capital Limited ("Milkwood"). Milkwood had built up a stake in over 25 per cent. of the Company's issued Share capital, a significant proportion of which was acquired from two institutional shareholders who had previously supported the Managed Wind-Down. Milkwood's interest was thus sufficient to block the necessary special resolution to implement the B Share Scheme, which was put to Shareholders at a general meeting of the Company held on 3 April 2024 (the "April General Meeting"). Despite the fact that 99.72 per cent. of the independent (i.e. non-Milkwood) votes cast at the April General Meeting were in favour of the B Share Scheme, indicating that a majority of Shareholders continued to support the Managed Wind-Down, Milkwood's activity continued. This included requisitioning a general meeting of the Company, at which Milkwood intended to remove two of the Company's current Directors, Mr Aldous and Mr Legget, from office and appoint three of its own nominees in their place (the "Requisition"). In effect, this would have amounted to a takeover of the Company. Whilst the Requisition ultimately failed, it was costly for your Company and Shareholders as a whole.
As 99.72 per cent. of the independent votes cast at the April General Meeting were in favour of returning capital through the B Share Scheme, your Board resolved to fulfil its mandate to return cash to Shareholders in accordance with the New Investment Policy. Accordingly, the Company has paid out a series of special dividends to Shareholders which have amounted to, in aggregate, 63.9 pence per Share.
Despite the distraction of the Requisition (and its associated costs), your Board is pleased with the progress that has been made by the Investment Manager in realising the Company's assets and would like to take the opportunity to thank the Investment Manager for its stewardship of the Company's portfolio throughout the Managed Wind-Down process.
The remaining investments in the Company's portfolio are expected to be realised following the Liquidators' appointment, with the benefit of continuing advice from the Investment Manager. There can be no guarantee as to the value, if any, and/or timing of the distribution(s) that may result from the realisation of these investments. Both of these factors depend on, among other things, prevailing market conditions.
The Liquidators will retain sufficient funds to meet the current, future and contingent liabilities of the Company, including the costs and expenses (inclusive of VAT, if applicable) of the Proposals not already paid at the point of liquidation and an additional retention of £100,000 for unknown contingencies (the "Liquidation Fund").
Assuming the Resolution is passed, and notwithstanding the retention of the Liquidation Fund, it is expected that the Liquidators will be able to make an initial distribution of the balance of cash currently held by the Company during the week commencing 3 March 2025 (the "Initial Distribution"). It is currently expected that the Initial Distribution will be approximately 2.0 pence per Share.
Once the Liquidators, with the assistance of the Investment Manager, have realised the Company's remaining assets, made the Initial Distribution, satisfied the claims of creditors of the Company and paid the costs and expenses of the Proposals, it is expected that the Liquidators will make a final distribution to Shareholders. The final distribution, if any, will be made solely at the discretion of the Liquidators.
The final distribution, if any, will not be made until the Liquidators have completed their statutory duties to seek out, adjudicate and pay creditors' claims and HMRC has confirmed its agreement to the Company's tax returns and that it has no objection to the closure of the liquidation. Accordingly, there can be no certainty as to the timing of the final distribution, if any.
All Shareholders on the Register of Members at 6.00 p.m. on 20 February 2025 (who are not Sanctions Restricted Persons) will be entitled to the distribution(s) from the Liquidators, including the Initial Distribution.
Nothing in the Proposals contained in this document shall impose any personal liability on the Liquidators.
In order to comply with the Company's obligations under UK and international sanctions regimes, no distribution made pursuant to the implementation of the Proposals (including, for the avoidance of doubt, the Initial Distribution) will be paid to a Sanctions Restricted Person.
The remuneration of the Liquidators, if appointed, will be on the terms set out in the Liquidators' Engagement Letter and in the Resolution. Assuming the liquidation takes no more than one year to complete, the fixed costs of the Company entering into members' voluntary liquidation, including the preparation of this document, but excluding the costs of: (i) the Investment Manager's fees; (ii) realising the remaining investments; and (iii) the making of the Initial Distribution and the final distribution (if any), are estimated to be approximately £175,000 inclusive of VAT.
The timing of the realisation of the Company's holdings, and prevailing market conditions, may result in the Company's investments being realised at amounts below the last reported values. Whilst the above costs of the winding up of the Company have been estimated, unforeseen actual costs may exceed these estimates. The estimated total net return to Shareholders from the winding up is, therefore, uncertain.
As set out above, subject to the passing of the Resolution at the General Meeting, the Company will retain the services of the Investment Manager to assist the Liquidators with the orderly realisation of the Company's remaining assets during the liquidation period under the terms of the Investment Management Agreement (adjusted as necessary so as to reflect that the Company will be in liquidation).
In addition, it is expected that the services of the Registrar and Custodian will be retained by the Liquidators during the liquidation period. Otherwise, the Company is taking steps to ensure that the appointments of its service providers will terminate on the passing of the Resolution.
A Shareholder who receives a distribution of cash in the course of the liquidation of the Company should be treated as making a disposal or part disposal of their Shares for the purposes of UK taxation of chargeable gains which may, depending on such Shareholder's individual circumstances (including the availability of exemptions, reliefs and allowable losses), give rise to a chargeable gain or allowable loss for the purposes of UK taxation of chargeable gains.
Shareholders who are not resident in the UK (excluding, in the case of an individual Shareholder, Shareholders who are only temporarily non-resident in the UK) for UK tax purposes should not be subject to UK tax on chargeable gains on a disposal, or part disposal, of Shares unless such Shares are used, held or acquired for the purposes of a trade, profession or vocation carried on in the UK through a branch or agency or, in the case of a corporate Shareholder, through a permanent establishment. Such Shareholders may be subject to foreign tax on any gain under local law.
The UK tax code contains provisions that permit HMRC to counteract tax advantages arising from certain transactions in securities by (among other things) treating some or all of the proceeds of capital disposals as distributions of income. Generally speaking, these provisions should not apply where it can be shown that the transactions in question were entered into for genuine commercial reasons and did not involve as one of their main objects or purposes the obtaining of a tax advantage. Shareholders are advised to take independent advice as to the potential application of these and other anti-avoidance provisions in the light of their own particular circumstances. Application has not been made to HMRC for clearance as to these matters.
The information in this document relates to UK taxation applicable to the Company and its Shareholders and is based on current legislation and what is understood to be current HMRC practice. The statements above relate to persons who are absolute beneficial owners of the Shares and may not apply to certain classes of persons, such as dealers in securities. Such statements are given by way of general summary only and do not constitute legal or tax advice to any Shareholder. Shareholders who are in any doubt as to any applicable taxation consequences to them of the Proposals should seek advice from a qualified independent financial adviser or tax specialist.
The expected last day for dealings in the Shares on the London Stock Exchange through CREST on a normal rolling two day settlement basis is expected to be 18 February 2025. After that date, dealings should be for cash settlement only and will be registered in the normal way if the transfer, accompanied by the documents of title, is received by the Registrar by 6.00 p.m. on 20 February 2025. Transfers received by the Registrar after that time will be returned to the person lodging them and, if the Resolution is passed, the original holder will receive any proceeds from distributions made by the Liquidators. After the liquidation of the Company and the making of the final distribution to Shareholders (if any), existing certificates in respect of the Shares will cease to be of value and any existing credit of the Shares in any stock account in CREST will be redundant.
Following the cancellation of the listing of the Shares on the Official List and the Shares ceasing to trade on the London Stock Exchange, there will be no liquidity in the Shares and it will, therefore, be difficult for Shareholders to realise value from the Shares other than through the liquidation process over time.
Whereas Shareholders have the opportunity to attend the General Meeting at the address set out in the Notice of General Meeting, Shareholders are encouraged to submit proxy appointments in advance of the General Meeting, either through CREST, electronically or by completing the Form of Proxy enclosed with this document. The completion and return of the Form of Proxy will ensure your vote is registered. Shareholders are requested to complete and return proxy appointments to the Registrar by one of the following means:
In each case, the proxy appointments must be transmitted so as to be received by the Registrar as soon as possible and, in any event, by no later than 10.00 a.m. on 19 February 2025. To be valid, the proxy appointment must be completed in accordance with the instructions accompanying it and lodged with the Registrar by the relevant time.
Appointing a proxy online, completing, signing and returning a hard copy Form of Proxy or completing and transmitting a CREST Proxy Instruction will not preclude Shareholders from attending and voting at the General Meeting in person, should they so wish and are so entitled.
To ensure voting accurately reflects the views of Shareholders, it will be proposed that at the General Meeting voting on the Resolution will be conducted by way of a poll vote rather than by a show of hands. The relevant procedures will be explained at the General Meeting.
The Board considers that the Resolution to be proposed at the General Meeting is in the best interests of the Company and its Shareholders as a whole. Accordingly, the Board unanimously recommends that Shareholders vote in favour of the Resolution, as the Directors intend to do in respect of their own beneficial shareholdings which represent, in aggregate, 0.62 per cent. of the Company's issued Share capital as at 24 January 2025.
Yours faithfully
Hugh Aldous Chairman
In this document, the words and expressions listed below have the meanings set out opposite them:
| 2023 Half Year Report | the half year report and unaudited financial statements of the Company for the six month period ended 31 August 2023 |
|---|---|
| April General Meeting | the general meeting of the Company held on 3 April 2024 at which Shareholders were asked to approve the B Share Scheme Resolutions |
| Articles | the articles of association of the Company, as amended from time to time |
| B Share Scheme | has the meaning set out on page 7 of this document |
| B Share Scheme Resolutions | the resolutions necessary to facilitate the implementation of the B Share Scheme |
| Board | the board of Directors from time to time, including any duly constituted committee thereof |
| Business Day | any day of the year (excluding Saturdays, Sundays and public holidays) on which banks are open for normal banking business in the City of London |
| Companies Act | the UK Companies Act 2006, as amended |
| Company | Downing Strategic Micro-Cap Investment Trust plc, a public limited company incorporated in England and Wales with registered number 10626295, the registered office of which is situated at The Office Suite, Den House, Den Promenade, Teignmouth TQ14 8SY |
| CREST | the 'Relevant System', as defined in the Uncertificated Securities Regulations, for the paperless settlement of transfers and the holding of shares in uncertificated form which is administered by Euroclear |
| CREST Manual | the compendium of documents titled 'CREST Manual' issued by Euroclear from time to time and comprising the CREST Reference Manual, the CREST Central Counterparty Service Manual, the CREST International Manual, CREST Rules, CCSS Operations Manual and the CREST Glossary of Terms |
| CREST Proxy Instruction | an authenticated CREST message to appoint or instruct a proxy in accordance with Euroclear's specifications and the CREST Manual |
| Custodian | The Northern Trust Company, a company established under the laws of the State of Illinois in the United States of America, whose principal place of business in England and Wales is 50 Bank Street, Canary Wharf, London E14 5NT |
| Directors | the directors of the Company, from time to time |
| Disclosure Guidance and Transparency Rules |
the UK disclosure guidance and transparency rules made by the FCA under Part VI of FSMA |
| Euroclear | Euroclear UK & International Limited, a private limited company incorporated in England and Wales with registered number 02878738, the registered office of which is situated at 33 Cannon Street, London EC4M 5SB, being the operator of CREST |
|---|---|
| FCA or Financial Conduct Authority | the Financial Conduct Authority of the United Kingdom, the place of business of which is at 12 Endeavour Square, London E20 1JN, including any replacement or substitute therefor, and any regulatory body or person succeeding, in whole or in part, to the functions thereof |
| Form of Proxy | the form of proxy for use by Shareholders in connection with the General Meeting |
| FSMA | the UK Financial Services and Markets Act 2000, as amended |
| General Meeting | the general meeting of the Company convened for 10.00 a.m. on 21 February 2025 at the offices of Dickson Minto LLP, Dashwood House, 69 Old Broad Street, London EC2M 1QS, or any adjournment of that meeting, notice of which is set out in the Notice of General Meeting |
| HMRC | His Majesty's Revenue & Customs |
| Initial Distribution | has the meaning given to it on page 8 of this document |
| Investment Management Agreement | the investment management agreement among the Company and the Investment Manager dated 23 March 2017, as amended and/or supplemented from time to time |
| ISA | individual savings account |
| Investment Manager or Downing | Downing LLP, a limited liability partnership incorporated in England and Wales with registered number OC341575, the registered office of which is situated at 10 Lower Thames Street, London EC3R 6AF |
| Liquidation Fund | has the meaning given to it on page 8 of this document |
| Liquidators | the proposed joint liquidators of the Company, being Derek Neil Hyslop and Richard Peter Barker, both licensed insolvency practitioners of Ernst & Young LLP |
| Liquidators' Engagement Letter | the engagement letter between the Company and Ernst & Young LLP dated 22 January 2025 |
| London Stock Exchange | London Stock Exchange plc, a public limited company incorporated in England and Wales with registered number 02075721, the registered office of which is situated at 10 Paternoster Square, London EC4M 7LS |
| Managed Wind-Down | the managed wind-down of the Company's investment portfolio |
| Milkwood | Milkwood Capital Limited, a private limited company incorporated in England and Wales with registered number 0862819, the registered office of which is situated at Kingswick House, Kingswick Drive, Ascot SL5 7BH |
| NAV or Net Asset Value | the value of the assets of the Company less its liabilities, as determined in accordance with the accounting policies adopted by the Company from time to time |
|---|---|
| NAV per Share | the Net Asset Value per Share of the Company from time to time |
| New Investment Policy | the investment objective and policy of the Company adopted at the general meeting of the Company held on 28 February 2024 |
| Notice of General Meeting | the notice of the General Meeting set out at the end of this document |
| Official List | the official list maintained by the FCA |
| Proposals | the proposals for the members' voluntary liquidation of the Company, as described in more detail in this document |
| Redemption Opportunity | has the meaning set out on page 7 of this document |
| Register | the register of members of the Company |
| Registrar | Computershare Investor Services PLC, a public limited company incorporated in England and Wales with registered number 03498808, the registered office of which is situated at The Pavilions, Bridgwater Road, Bristol BS13 8AE |
| Regulatory Information Service or RIS | any of the regulatory information services set out in Appendix 3 of the UK Listing Rules |
| Requisition | has the meaning given to it on page 7 of this document |
| Resolution | the special resolution set out in the Notice of General Meeting at the end of this document required to approve the Proposals |
| Sanctions Authority | each of the following: |
| • the United States government; |
|
| • the United Nations; |
|
| • the United Kingdom; |
|
| • the European Union (or any of its member states); |
|
| • any other relevant governmental or regulatory authority, institution or agency which administers economic, financial or trade sanctions; or |
|
| • the respective governmental institutions and agencies of any of the foregoing including, without limitation, the Office of Foreign Assets Control of the US Department of the Treasury, the United States Department of State, the United States Department of Commerce and His Majesty's Treasury. |
|
| Sanctions Restricted Person | each person or entity: |
| • that is organised or resident in a country or territory which is the target of comprehensive country sanctions administered or enforced by any Sanctions Authority; or |
| • that is, or is directly or indirectly owned or controlled by a Person that is, described or designated in: (a) the current "Specially Designated Nationals and Blocked Persons" list (which as of the date hereof can be found at: www.treasury.gov/ofac/downloads/sdnlist.pdf); and/or (b) the current "Consolidated list of persons, groups and entities subject to EU financial sanctions" (which as of the date hereof can be found at: https://data.europa.eu/data/datasets/consolidated list-of-persons-groups-and-entities-subject-toeu financial-sanctions?locale=en); and/or (c) the current "Consolidated list of financial sanctions targets in the UK" (which as of the date hereof can be found at: https://ofsistorage.blob.core.windows.net/publishlive/ 2022format/ConList.html); or • that is otherwise the subject of or in violation of any sanctions administered or enforced by any Sanctions Authority, other than solely by virtue of their inclusion in: (a) the current "Sectoral Sanctions Identifications" list (which as of the date hereof can be found at: www.treasury.gov/ofac/downloads/ssi/ssilist.pdf) (the "SSI List"), (b) Annexes 3, 4, 5 and 6 of Council Regulation No. 833/2014, as amended by Council Regulation No. 960/2014 (the "EU Annexes"), or (c) any other list maintained by a Sanctions Authority, with similar effect to the SSI List or the EU Annexes |
|
|---|---|
| Shareholders | the holders of Shares from time to time, and Shareholder shall be construed accordingly |
| Shares | ordinary shares of 0.1 pence each in the capital of the Company, and Share shall be construed accordingly |
| UK or United Kingdom | the United Kingdom of Great Britain and Northern Ireland |
| UK Listing Rules | the UK listing rules made by the FCA under Part VI of FSMA, as amended from time to time |
| uncertificated or in uncertificated form | a Share recorded on the Register as being held in uncertificated form in CREST and title to which, by virtue of the Uncertificated Securities Regulations, may be transferred by means of CREST |
| Uncertificated Securities Regulations | any provision of the Companies Act relating to uncertificated shares (including the holding, evidencing of title to, or transfer of uncertificated shares) and any legislation, rules or other arrangements made under or by virtue of such provision, including without limitation the Uncertificated Securities Regulations 2001, as amended from time to time |
| VAT | value added tax |
(Incorporated and registered in England and Wales under the Companies Act 2006 with registered number 10626295)
Notice is hereby given that a general meeting of Downing Strategic Micro-Cap Investment Trust plc (the "Company") will be held at the offices of Dickson Minto LLP, Dashwood House, 69 Old Broad Street, London EC2M 1QS on 21 February 2025 at 10.00 a.m. for the purpose of considering the following business.
To consider and, if thought fit, pass the following resolution as a special resolution of the Company:
Registered Office: By Order of the Board The Office Suite, Den House
Den Promenade ISCA Administration Services Limited Teignmouth TQ14 8SY Company Secretary
29 January 2025
This Notice of General Meeting is sent to holders of Shares entitled to attend, speak and vote at the General Meeting.
To be entitled to attend and vote at the General Meeting (and for the purposes of determining the votes that may be cast on a poll), members must be registered in the Company's Register by 6.00 p.m. on 19 February 2025 (or, if the General Meeting is adjourned, 48 hours (excluding non-Business Days) prior to the adjourned General Meeting). Changes to entries in the Register after that time shall be disregarded in determining the rights of any members to attend and vote at such General Meeting.
Members are entitled to appoint one or more proxies to exercise all or any of their rights to attend, speak and vote at the General Meeting. A proxy need not be a member of the Company, but must attend the General Meeting to represent a member. To be validly appointed, a proxy must be appointed using the procedures set out in these Notes and the notes to the accompanying Form of Proxy.
If members wish their proxy to speak on their behalf at the General Meeting, members will need to appoint their own choice of proxy (not the Chair of the General Meeting) and give their instructions directly to them.
Members can only appoint more than one proxy where each proxy is appointed to exercise rights attached to different Shares. Members cannot appoint more than one proxy to exercise the rights attached to the same Share(s). Members must state clearly on each Form of Proxy the number of Shares in relation to which the proxy is appointed. You can only appoint a proxy using the procedures set out in these Notes and the notes to the Form of Proxy.
A member may instruct their proxy to abstain from voting on the Resolution to be considered at the General Meeting by marking the 'vote withheld' option when appointing their proxy. It should be noted that an abstention is not a vote in law and will not be counted in the calculation of the proportion of votes 'for' or 'against' the relevant resolution.
The appointment of a proxy will not prevent a member from attending the General Meeting and voting if they wish.
A person who is not a member of the Company but who has been nominated by a member to enjoy information rights does not have the right to appoint any proxies under the procedures set out in these Notes and should read Note 8 below.
A Form of Proxy for use in connection with the General Meeting is enclosed. To be valid any completed and signed Form of Proxy or other instrument appointing a proxy, together with any Power of Attorney or other authority under which it is signed or a certified copy thereof, must be received by post (or during normal business hours only by hand) by the Registrar, Computershare Investor Services PLC at The Pavilions, Bridgwater Road, Bristol BS99 6ZY not later than 10.00 a.m. on 19 February 2025 (or, in the event the meeting is adjourned, not later than 48 hours (excluding non-Business Days) before the time of the adjourned meeting).
If you require additional Forms of Proxy, please contact the Registrar on 0370 707 1358. Lines are open from 8.30 a.m. to 5.30 p.m., Monday to Friday (excluding public holidays in England and Wales). If you are a Shareholder outside the United Kingdom, please call +44 370 707 1358.
As an alternative to completing a hard copy Form of Proxy, you may submit your proxy electronically by using the following link: www.investorcentre.co.uk/eproxy. To be valid, your proxy appointment(s) and instructions must reach the Registrar so as to be received by no later than 10.00 a.m. on 19 February 2025 (or, in the event the meeting is adjourned, not later than 48 hours (excluding non-Business Days) before the time of the adjourned meeting).
CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so by using the procedures described in the CREST Manual and by logging on to the website www.euroclear.com. CREST personal members or other CREST sponsored members, and those CREST members who have appointed a voting service provider(s), should refer to their CREST sponsor or voting service provider(s), who will be able to take the appropriate action on their behalf.
In order for a proxy appointment or instruction made using the CREST service to be valid, the appropriate CREST message (a "CREST Proxy Instruction") must be properly authenticated in accordance with Euroclear UK & International Limited's specifications, and must contain the information required for such instruction, as described in the CREST Manual. The message, regardless of whether it constitutes the appointment of a proxy or is an amendment to the instruction given to a previously appointed proxy must, in order to be valid, be transmitted so as to be received by the Company's Registrar (ID 3RA50) by no later than 10.00 a.m. on 19 February 2025 (or, in the event the meeting is adjourned, not later than 48 hours (excluding non-Business Days) before the time of the adjourned meeting). For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp applied to the message by the CREST application host) from which the Company's Registrar is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST. After this time any change of instructions to proxies appointed through CREST should be communicated to the appointee through other means.
CREST members and, where applicable, their CREST sponsors or voting service providers should note that Euroclear UK & International Limited does not make available special procedures in CREST for any particular message. Normal system timings and limitations will, therefore, apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST personal member, or sponsored member, or has appointed a voting service provider(s), to procure that their CREST sponsor or voting service provider(s) take(s)) 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 system provider(s) are referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST system and timings.
The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities Regulations.
In the case of joint holders, where more than one of the joint holder purports to appoint a proxy, only the appointment submitted by the most senior holder will be accepted. The first-named holder is considered the most senior for this purpose.
Any corporation that is a member can, by a resolution of its board or other governing body, authorise such person or persons as it thinks fit to act as its representative(s) at the General Meeting.
The right to appoint a proxy through the procedures set out in these notes does not apply to persons whose Shares are held on their behalf by another person and who has been nominated to receive communications from the Company in accordance with section 146 of the Companies Act 2006 ("Nominated Persons"). Nominated Persons may have a right under an agreement with the registered member who holds Shares on their behalf to be appointed (or have someone else appointed) as a proxy to vote at the General Meeting. Alternatively, if a Nominated Person does not have such a right or does not wish to exercise it, they may, under any such agreement, have a right to give instructions to the registered member as to the exercise of voting rights. Any queries with respect to your rights as a Nominated Person should be directed to the registered member by whom you were nominated in respect of these arrangements.
As at close of business on 24 January 2025 (being the latest practicable date prior to publication of this Notice of General Meeting), the Company's issued share capital consisted of 45,645,241 Shares of 0.1 pence each, and one non-redeemable preference management share of 1 penny. No shares are held in treasury. The nonredeemable preference management share does not carry any voting rights. Each Share carries the right to one vote at a general meeting of the Company. Therefore, the total number of voting rights in the Company as at close of business on 24 January 2025 was 45,645,241.
Any person holding 3 per cent. or more of the total voting rights of the Company who appoints a person as their proxy will need to ensure that both they and their proxy complies with their respective disclosure obligations under the FCA's Disclosure Guidance and Transparency Rules. Should the members grant the Chairman or any Director voting authority representing 3 per cent. or more of the total voting rights of the Company, an appropriate disclosure will be released to the London Stock Exchange in accordance with the FCA's Disclosure Guidance and Transparency Rules. Any corporation that is a Shareholder can appoint one or more corporate representatives who may exercise on its behalf all of its powers as a Shareholder provided that they do not do so in relation to the same Shares.
Any member attending the General Meeting has the right to ask questions that relate to the business of the General Meeting, although no answer need be given if: (i) to do so would interfere unduly with the preparation for the General Meeting or involve disclosure of confidential information; (ii) the answer has already been given on the Company's website; or (iii) it is undesirable in the best interests of the Company or the good order of the General Meeting that the question be answered.
A copy of this Notice of General Meeting, including these explanatory notes and other information required by section 311A of the Companies Act 2006, can be found on the Company's website at www.downingstrategic.co.uk. Shareholders are advised that, unless otherwise stated, they may not use any electronic address (within the meaning of section 333(4) of the Companies Act 2006) provided in this Notice (or in any related documents including the Form of Proxy) to communicate with the Company for any purpose other than those expressly stated.
No Director has a service contract with the Company but copies of the Directors' letters of appointment will be available for inspection at the registered office of the Company during normal business hours on any weekday (English public holidays are excepted) from the date of this Notice of General Meeting and at the location of the General Meeting for at least 15 minutes prior to the General Meeting and during the General Meeting.
Have a question? We'll get back to you promptly.