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Pre-Listing Announcement In Relation To A Secondary Inward Listing Of BRGE On The Main Board Of The JSE Limited
BLACKROCK GREATER EUROPE INVESTMENT TRUST PLC
A public company incorporated in England and Wales
Company Number: 5142459
LSE Share Code: BRGE
JSE Share Code: BGE
ISIN code: GB00B01RDH75
(“BRGE” or “the Company”)
PRE-LISTING ANNOUNCEMENT IN RELATION TO A SECONDARY INWARD LISTING OF
BRGE ON THE MAIN BOARD OF THE JSE LIMITED (“JSE”)
1. INTRODUCTION
BRGE carries on the business of an investment trust company and
its principal activity is portfolio investment. BRGE’s investment
objective is achieving capital growth primarily through investment
in a focused portfolio constructed from a combination of the
securities of large, mid and small capitalisation listed European
companies, together with some investment in the developing markets
of Europe.
BRGE has been admitted to the Official List and to trading on the
London Stock Exchange’s (“LSE”) main market for listed securities
since 20 September 2004 and has a market capitalisation of
approximately £316.4 million as at close of trade on Tuesday,
7 November 2017 (being the last practicable date prior to the
issue of this announcement). The LSE is an “accredited exchange”
as defined in paragraph 18.42 of the Listings Requirements of the
JSE (“Listings Requirements”) and is equivalent to the main board
of the JSE. Given that BRGE has been listed on an accredited
exchange for more than 18 months, BRGE is an “accredited
applicant” and is therefore permitted to list on the JSE by way
of the fast track listing process. BRGE is not listed on any other
exchange.
The JSE has granted BRGE a secondary inward listing, by way of
the fast-track listing process, of all the ordinary shares in
issue, being 110 328 938 ordinary shares with a par value of 0.1
pence each, on the main board of the JSE in the “Equity Investment
Instruments” sector, under the abbreviated name “BRGE", share code
“BGE” and ISIN code GB00B01RDH75 (the “secondary listing”), with
effect from the commencement of trading on Friday, 24 November
2017 (“JSE Listing Date”).
BRGE is planning to raise approximately £35.5 million by way of a
private placing in South Africa (“SA Placing”) consisting of the
sale of up to 10 200 311 existing treasury shares (the “Placement
Shares”) at a placement price per Placement Share equal to the
net asset value (“NAV”) per ordinary share of the Company as at
close of business on Friday, 17 November 2017 (the closing date
of the SA Placing) (“Closing Date”) (“Placement Price”). It is
the board of the Company’s (“Board”) opinion that the SA Placing
will enable the Company to continue delivering its strategy of
capital growth of the portfolio through selected investments in
large, mid and small capitalisation listed European companies,
together with some investment in the developing markets of Europe
in line with its investment policy and investment objective whilst
maintaining gearing at a conservative level.
All capital raised will be raised in compliance with the
requirements of the JSE and LSE.
BRGE will have an anticipated market capitalisation of
£359.74 million on the JSE Listing Date, following the placement
of the Placement Shares.
2. OVERVIEW OF BRGE
The Company carries on the business of an investment trust company
and its principal activity is portfolio investment. BRGE’s
investment objective is achieving capital growth primarily through
investment in a focused portfolio constructed from a combination
of the securities of large, mid and small capitalisation listed
European companies, together with some investment in the
developing markets of Europe.
The Company has the flexibility to invest in any country included
in the FTSE World Europe ex UK Index, as well as the freedom to
invest in developing countries not included in the Index but
considered by the Manager and the Board as part of greater Europe.
As at 31 August 2017, the Company held investments in the following
sectors across Europe: basic materials, consumer goods, consumer
services, financials, health care, industrials, oil & gas,
technology, telecommunications and utilities.
BRGE is managed by BlackRock Fund Managers Limited (“the Manager”)
and the Manager has, with the Company’s consent, delegated certain
investment management and other ancillary services to BlackRock
Investment Management (UK) Limited (“BIM UK”). The ultimate parent
company of the Manager and BIM UK, BlackRock Inc. (the “Group”),
is a global leader in investment management, risk management and
advisory services for institutional and retail clients.
The Company’s business model follows that of an externally managed
investment trust, therefore the Company does not have any
employees and outsources its activities to third party service
providers including the Manager, who is the principal service
provider. The management of the investment portfolio and the
administration of the Company have been contractually delegated
to the Manager. The Manager, operating under an investment
management agreement, has direct responsibility for the decisions
relating to the day-to-day running of the Company and is
accountable to the Board for the investment, financial and
operating performance of the Company.
As at 31 December 2016, the Group has more than 13 000 employees
in more than 30 countries, including South Africa and as at
31 September 2017, has approximately $5.977 trillion assets under
management.
3. HISTORY AND DEVELOPMENT
The Company was founded by Merrill Lynch Investment Managers Ltd
and was incorporated on 1 June 2004 as Merrill Lynch Greater
Europe Investment Trust plc.
On 20 September 2004, the Company was listed on the LSE. On
25 April 2008, Merrill Lynch Greater Europe Investment Trust plc
changed its name to BlackRock Greater Europe Investment Trust plc.
4. PRINCIPAL ACTIVITIES AND INVESTMENT POLICY
The principal activity of the Company is portfolio investment in
accordance with its investment objective as outlined above.
The Company’s investment policy is that the portfolio should
consist of approximately 30-70 securities and most of the
portfolio will be invested in larger capitalisation companies,
being companies with a market capitalisation of over €5 billion.
Up to 25% may be invested in companies in developing Europe with
the flexibility to invest up to 5% of the portfolio in unquoted
investments. However, overall exposure to developing listed
European companies and unquoted investments together will not
exceed 25% of the Company’s portfolio.
Investment in developing European securities may be either direct
or through other funds, including those managed by the Manager,
subject to a maximum of 15% of the portfolio. Direct investment
in Russia is limited to 10% of the Company’s assets. Investments
may also include depositary receipts or similar instruments
representing underlying securities. The Company also has the
flexibility to invest up to 20% of the portfolio in debt
securities, such as convertible bonds and corporate bonds. The
use of any derivative instruments such as financial futures,
options and warrants and the entering into of stock lending
arrangements will only be for the purposes of efficient portfolio
management. While the Company may hold shares in other investment
companies (including investment trusts), the Board has agreed that
the Company will not invest more than 15%, in aggregate, of its
gross assets in other listed closed-ended investment funds (save
to the extent that such closed-ended investment funds have
published investment policies to invest no more than 15% of their
total assets in such other listed closed-ended investment funds).
The Company achieves an appropriate spread of risk by investing
in a diversified portfolio of securities. The Manager believes
that appropriate use of gearing can add value over time. This
gearing typically is in the form of an overdraft facility which
can be repaid at any time. The level and benefit of any gearing
is discussed and agreed regularly by the Board. The Manager
generally aims to be fully invested and it is anticipated that
gearing will not exceed 15% of NAV at the time of draw down of
the relevant borrowings.
The Board recognises that it is in the long term interests of
shareholders that shares do not trade at a significant discount
to their prevailing NAV. The Board believes that this may be
achieved by regular tender offers and the use of share buy back
powers. In the year to 31 August 2017, the Company’s share price
discount to NAV ranged from 2.4% to 9.5% calculated on an undiluted
cum income NAV.
5. INVESTMENT PORTFOLIO
The Company’s portfolio of large, mid and small capitalisation
companies is diversely spread across countries in Europe included
in the FTSE World Europe ex UK Index the UK and in the developing
markets of Europe.
As at 31 August 2017, the Company held 35 investments and 7.6% of
the portfolio was invested in developing Europe. The Company had
no unquoted investments. No bonds were held at 31 August 2017.
As at 30 September 2017, the Company’s 10 largest investments were
comprised as follows:
- SAP: (4.4%), one of the leading global enterprise software
providers;
- Unilever: (4.4%), a transnational consumer goods company with
more than 400 brands;
- ASML: (4.1%), a Dutch company which specialises in the supply
of photolithography systems for the semiconductor industry;
- Lonza Group: (4.0%), a Swiss multinational chemicals and
biotechnology company;
- Bayer: (4.0%), a German life science company with M&A
optionality;
- Fresenius Medical Care: (3.9%), a German company and leading
provider of dialysis products and services;
- Compagnie Financière Richemont: (3.7%), a Swiss-based luxury
goods holding company;
- Kering: (3.6%), a global luxury group, its largest and most
valuable brand being Gucci;
- DSV: (3.6%), a Danish transport and logistics company; and
- Wartsila: (3.5%), a Finnish industrial company producing high
technology engines for the marine and energy markets.
All percentages above reflect the value of the holding as a percentage
of total investments of the Company. Together, the ten largest
investments represent 39.2% of the Company’s portfolio.
As at 30 September 2017, the geographical spread of the portfolio was
as follows:
Geographical region / country % of total assets
Switzerland 15.9
France 15.4
Denmark 13.1
Germany 12.3
Netherlands 11.7
Sweden 8.5
Belgium 5.5
Russia 4.5
Finland 3.5
Spain 3.2
Ireland 2.8
Greece 1.7
Israel 1.6
Ukraine 1.1
Net current liabilities 0.8
Total 100
6. STRATEGY
The Company invests in accordance with the investment objective
and policy as outlined above.
7. INVESTMENT MANAGEMENT AND ADMINISTRATION
As an externally managed investment trust, the Company does not
have any employees and outsources its activities to third party
service providers including the Manager. The management of the
investment portfolio and the administration of the Company have
been contractually delegated to the Manager on the terms of an
investment management agreement with effect from 2 July 2014
(“Investment Management Agreement”). The Manager, operating under
the Investment Management Agreement, has direct responsibility
for the decisions relating to the day-to-day running of the
Company and is accountable to the Board for the investment,
financial and operating performance of the Company. The Investment
Management Agreement is terminable by either party on 6 months’
written notice.
The Manager has, with the Company’s consent, delegated pursuant
to a written delegation agreement (“Delegation Agreement”) certain
portfolio and risk management services, and other ancillary
services, to BIM UK.
BIM UK acts as the Company’s investment manager under the
Delegation Agreement with the Manager. The Manager receives a base
fee of 0.85% of net asset value and no performance fee. Where the
Company invests in other investment or cash funds managed by BIM
UK, any underlying fee charged by BIM UK is paid by the Manager.
Fees are adjusted by adding all dividends declared during the
period.
The investment management fee due for the year ended
31 August 2017 amounted to £2 573 000 (year ended 31 August 2016:
£2 312 000). At 31 August 2017, £1 352 000 was outstanding in
respect of the investment management fee (year ended 31 August
2016: £1 190 000). In addition to the above services, BIM UK
provided the Company with marketing services. The total fees paid
or payable for these services for the year ended 31 August 2017
amounted to £90 000 excluding VAT (year ended 31 August 2016:
£41 000). Marketing fees of £70 000 excluding VAT were outstanding
at 31 August 2017 (31 August 2016: £45 000).
The Board considers the arrangements for the provision of
investment management services to the Company on an ongoing basis
and a formal review is conducted annually. As part of the annual
review the Board considers the quality and continuity of the
personnel assigned to handle the Company’s affairs, the investment
process and the results achieved to date.
The Company appointed BNY Mellon Trust & Depositary (UK) Limited
(“BNYMTD or the Depositary”) in the role as depository with effect
from 2 July 2014 (with effect from 1 November 2017, the role of
the Depositary will transfer from BNYMTD to its parent company,
the Bank of New York Mellon (International) Limited). Their duties
and responsibilities are outlined in the investment fund
legislation (as defined in the Financial Conduct Authority
Alternative Investment Fund Rulebook). The main role of the
Depositary under the Alternative Investment Fund Managers’
Directive (“AIFMD”) is to act as a central custodian with
additional duties to monitor the operations of the Company,
including monitoring cash flows and ensuring the Company’s assets
are valued appropriately in accordance with the relevant
regulations and guidance. The Depositary is also responsible for
enquiring into the conduct of the Alternative Investment Fund
Manager (“AIFM”) in each annual accounting period. BNYMTD receives
a fee payable at 0.0115% of the net assets of the Company. The
Company has appointed BNYMTD in a tripartite agreement to which
the Manager is also a signatory. The Depositary is also liable
for the loss of financial instruments held in custody. The
depositary agreement is subject to 90 days’ notice of termination
by any party. Under the depositary agreement, custody services in
respect of the Company’s assets have been delegated to the Bank
of New York Mellon (International) Limited (“BNYM”). BNYM receives
a custody fee payable by the Company at rates depending on the
number of trades effected and the location of securities held.
As noted above, with effect from 1 November 2017, the role of the
Depositary will transfer from BNYMTD to its parent company, the
Bank of New York Mellon (International) Limited. As a result, the
delegation of custody services will terminate.
Notwithstanding the above, the Board is collectively responsible
for the good governance of the Company and responsible to
shareholders for the long term success of the Company and is its
governing body. There is a clear division of responsibility
between the Board and the Manager. Matters for the Board include
setting the Company’s strategy, including its investment objective
and policy, setting limits on gearing, capital structure,
governance, and appointing and monitoring of performance of
service providers, including the Manager.
The Investment Management Agreement contains no provisions to
amend, alter or terminate such agreement upon a change of control
of the Company.
8. INFORMATION ON THE BOARD
The directors of the Company are all independent of the Manager
and their principal functions are as follows:
Name Position
Eric Sanderson Non-Executive Chairman
Carol Ferguson Non-Executive Director
Paola Subacchi Non-Executive Director
Peter Baxter Non-Executive Director and Chairman of
the Audit and Management Engagement
Committee
Davina Curling Non-Executive Director
Profiles of the Directors, detailing their experience, are set
out below:
Eric Sanderson – Non-Executive Chairman
Appointed to the board in April 2013, Eric Sanderson is a chartered
accountant and a banker and was chief executive of British Linen
Bank from 1989 to 1997 and a member of the management board of
Bank of Scotland in his role as head of group treasury operations
from 1997 to 1999. He was formerly chairman of MyTravel Group PLC,
MWB Group Holdings and Dunedin Fund Managers Limited. He is
presently chairman of Schroder UK Mid Cap Fund plc.
Carol Ferguson – Non-Executive Director
Appointed to the board in June 2004, Carol Ferguson is a qualified
accountant and has over 25 years' experience in the investment
and financial services industry. She is also a non-executive
director of Standard Life UK Smaller Companies Trust plc and
chairman of Invesco Asia Trust plc. She is also on the board of
Vernalis plc.
Paola Subacchi – Non-Executive Director
Appointed to the board in July 2017, Paola Subacchi is an
economist, writer and commentator on the functioning and
governance of the international financial and monetary system.
She is a senior fellow at Chatham House (The Royal Institute of
International Affairs) in London, a visiting professor at the
University of Bologna, and a non-executive director of Scottish
Mortgage Investment Trust plc. An Italian national, she studied
at Universitá Bocconi in Milan and at the University of Oxford.
Peter Baxter - Non-Executive Director and Chairman of the Audit
and Management Engagement Committee
Appointed to the board in April 2015, Peter Baxter has 30 years’
experience in the investment management industry. He was chief
executive of Old Mutual Asset Managers (UK) and previously worked
for Schroders and Hill Samuel in a variety of investment strategy
roles. He is a member of the Board of Trust for London, where he
chairs the investment committee, a member of the Financial
Reporting Council’s Conduct Committee, and a non-executive
director of Civitas Social Housing PLC.
Davina Curling – Non-Executive Director
Appointed to the board in December 2011, Davina Curling has over
25 years' experience of investment management and was managing
director and head of Pan European Equities at Russell Investments.
Prior to this she was head of European Equities at F&C, ISIS,
Royal & SunAlliance and Nikko Capital Management (UK). She is also
a non-executive director of Invesco Income Growth Trust plc and a
member of the St James's Place Wealth Management Investment
Committee.
9. PROSPECTS
The Board’s opinion is that the SA Placing will enable the Company
to continue delivering its strategy of capital growth of the
portfolio through selected investments in large, mid and small
capitalisation listed European companies, together with some
investment in the developing markets of Europe in line with its
acquisition policies and investment objective whilst maintaining
gearing at a conservative level.
In the view of the Board, Europe’s economy is enjoying a cyclical
upswing, supported by an accommodative European Central Bank and
subdued inflation. Additionally, after several years of
stagnation, European companies have been reporting strong
earnings, driven by rising sales, and economic indicators show
that growth may be sustainable.
Notwithstanding some continuing political uncertainty in certain
countries, positive economic and corporate results have
underpinned the attraction of European equities and the Euro and,
following a protracted period of outflows, investors appear to be
responding to optimism over Europe’s prospects. As unemployment
falls and business confidence grows, the Board believe that the
European recovery remains intact retains confidence that investors
will continue to increase weightings to this asset class.
10. SA PLACING
As stated above, BRGE is planning to raise approximately
£35.5 million by way of the SA Placing, consisting of the sale of
up to 10 200 311 Placement Shares at the Placement Price.
Successful applicants will be required to settle the Placement
Price in South African Rand (“Rand” or "ZAR") on the JSE Listing
Date, anticipated to be Friday, 24 November 2017. The Rand
denominated Placement Price shall be calculated from the GBP:ZAR
exchange rate that shall be announced on Stock Exchange News
Service of the JSE (“SENS”) and provided to successful applicants
by PSG Capital on Monday, 20 November 2017. The Placement shares
will be transferred on the JSE Listing Date on a delivery-versus-
payment basis and accordingly successful applicants must instruct
their Central Securities Depository Participant, as defined in
the South African Financial Markets Act, 2012, appointed by an
applicant (“CSDP”) or broker to settle the Rand denominated
Placement Price and to accept delivery of their allocated
Placement Shares on the JSE Listing Date.
This Pre-listing Announcement does not constitute an invitation
to the public to acquire or subscribe for Placement Shares and is
only directed at investors invited to participate
(“Invited Investors”).
This Pre-listing Announcement does not constitute, envisage or
represent an offer to the public, as envisaged in the South African
Companies Act, 2008, as amended (“Companies Act”), nor does it
constitute a prospectus registered in terms of the Companies Act.
Only Invited Investors who fall within the categories envisaged
in section 96(1)(a) of the Companies Act or who purchase Placement
Shares, the acquisition cost of which is not less than R1 000 000
per single addressee acting as principal (as contemplated in
section 96(1)(b) of the Companies Act), are entitled to
participate in the SA Placement.
The Company has allocated a minimum of 10 200 311 Placement Shares
to be taken up pursuant to the SA Placing, which may be adjusted
at the option of the Directors. A minimum amount of Placement
Shares are required to be placed under the SA Placing and listed
on the JSE's main board in order to comply with the JSE's spread
requirements, which shall equal a percentage of the total ordinary
shares in issue agreed with the JSE. If such spread requirements
are not met, the SA Placing will not take place.
PSG Capital Proprietary Limited are acting as the sole Transaction
Advisor and Bookrunner in South Africa in respect of the
SA Placing. For further information on the SA Placing, please
contact Willie Honeyball on +27 (0)21 887 9602 or +27 (0)71 173
4729 or willieh@psgcapital.com or David Tosi on +27 (0)21 887 9602
or +27 (0)72 574 0510 or davidt@psgcapital.com.
11. RATIONALE FOR THE CAPITAL RAISING AND SECONDARY LISTING ON THE
JSE
The rationale for the secondary listing on the JSE is to broaden
the Company’s shareholder base, access a new pool of investors,
and to improve the liquidity of its shares. The secondary listing
will give South African investors access to an actively managed
listed vehicle which aims to provide capital growth, primarily
through investment in a focused portfolio constructed from a
combination of the securities of large, mid and small
capitalisation listed European companies, together with some
investment in the developing markets of Europe, and which comprise
of the Manager’s best ideas within listed European equites. The
listing will give South African investors an entry point into the
ongoing economic recovery in Europe; and will allow South African
investors to obtain European listed equity exposure.
12. SALIENT FEATURES AND DATES RELATING TO THE SA PLACING AND THE
SECONDARY LISTING
The salient features and dates relating to the SA Placing and the
secondary listing are set out below:
SA Placing placement price A price per Placement Share
equal to the NAV per ordinary
share on the Closing Date
Number of shares offered in 10 200 311 ordinary shares
terms of the SA Placing
Amount sought to be raised Approximately £35.5 million
Publication of the pre-listing Friday, 10 November 2017
announcement on SENS on
Opening of the SA Placing at Thursday, 16 November 2017
09:00 on
Closing of the SA Placing at Friday, 17 November 2017
17:00 on
Results of the SA Placing Monday, 20 November 2017
released on SENS on
Notification of allotments and Monday, 20 November 2017
announcement of GBP:ZAR exchange
rate applicable to the Placing
Price on
Anticipated listing date on the Friday, 24 November 2017
Main Board of the JSE
Accounts at CSDPs or brokers Friday, 24 November 2017
updated and debited in respect
of the shares at the
commencement of trade on
The above times and dates are subject to change. Any such change
will be notified on SENS.
13. HISTORICAL FINANCIAL INFORMATION
The Annual Report and Accounts of BRGE for each of the financial
years ended 31 August 2015, 2016 and 2017 are available on the
Company’s website (http://www.blackrock.co.uk/brge).
The annual reports contain the audited consolidated financial
statements of the Company for the financial years ended
31 August 2015, 2016 and 2017 prepared in accordance with United
Kingdom Generally Accepted Accounting Practice (UK GAAP),
including FRS 102 (The Financial Reporting Standard applicable in
the UK and Republic of Ireland), together with audit reports in
respect of each such period.
The earnings and headline earnings per share of the Company for
the year ended 31 August 2017 was 5.33p (5.60p 2016). The Company
confirms that there are no dilutionary securities in issue and
there are no headline earnings adjustments required to be made to
the reported earnings per share, in accordance with the South
African Institute of Chartered Accountants Circular 2/2013.
No significant change in the financial or trading position of BRGE
has occurred since 31 August 2017, the end of the last financial
period for which audited financial statements of the Company have
been published.
14. DIVIDEND POLICY
The Company pays an interim and final dividend in May and December
of each year respectively. As the Company’s objective is capital
growth it does not target a particular dividend distribution.
However, as an approved investment trust it must distribute at
least 85% of its investment income as dividends.
The Placement Shares, when transferred and fully paid, will rank
equally in all respects with the existing ordinary shares, for
all dividends or distributions made, paid or declared, if any, by
reference to a record date after the date of their placement or
otherwise pari passu in all respects with the existing ordinary
shares.
The Company will declare dividends in Pounds Sterling, however,
Shareholders on the South African register will, by default,
receive dividend payments in Rand. The date on which the exchange
rate between Pounds Sterling and Rand is set will be announced at
the time the dividend is declared. A further announcement will be
made once the exchange rate has been set.
15. SARB APPROVAL AND SECONDARY LISTING ON THE JSE
The financial surveillance department of the South African Reserve
Bank has approved both the secondary listing of BRGE and the
SA Placing.
The JSE has, subject to BRGE achieving sufficient spread and/or
liquidity requirements to satisfy the JSE, granted BRGE a
secondary listing, by way of the fast-track listing process, of
all its issued ordinary shares on the JSE in the “Equity Investment
Instruments” sector, under the abbreviated name “BRGE”, share code
“BGE” and ISIN code GB00B01RDH75 with effect from the commencement
of trade on the JSE Listing Date.
16. COMPANY INFORMATION
BRGE was incorporated in England and Wales on 1 June 2004 under
the Companies Act 1985, as a public company limited by shares with
the name Merrill Lynch Greater Europe Investment Trust plc with
registered number 5142459. On 25 April 2008, Merrill Lynch Greater
Europe Investment Trust plc changed its name to BlackRock Greater
Europe Investment Trust plc.
The Company was admitted to the Official List and to trading on
the London Stock Exchange’s main market for listed securities on
20 September 2004.
The Company is domiciled in the UK. Its registered office is at
12 Throgmorton Avenue, London EC2N 2DL and the telephone number
is 020 7743 3000.
The Company has been approved by HM Revenue & Customs as an
investment trust in accordance with sections 1158 and 1159 of the
Corporation Tax Act 2010 (UK), subject to the Company continuing
to meet eligibility conditions. The Directors believe that the
Company has conducted its affairs in a manner which will satisfy
the conditions for continued approval. The Company is domiciled
in the United Kingdom as an investment company within the meaning
of section 833 of the Companies Act 2006 (UK). It is not a close
company and has no employees. As an investment company that is
managed and marketed in the United Kingdom, the Company is an
Alternative Investment Fund (“AIF”) falling within the scope of,
and subject to the requirements of the AIFMD. The Manager is the
AIFM of the Company and is governed by the provisions of the AIFMD
and the UK Alternative Investment Fund Managers’ Regulations 2013
(the “Regulations”) and is authorised and regulated by the
Financial Conduct Authority (“FCA”). The AIFM must comply with
the Regulations in respect of leverage, outsourcing, conflicts of
interest, risk management, valuation, remuneration and capital
requirements and must also make additional disclosures to both
shareholders and the FCA.
As a company with its shares admitted to the premium segment of
the Official List and to trading on the London Stock Exchange's
main market for listed securities as a primary listing and to the
JSE's main board for listed securities as a secondary listing,
the Company is subject to the Listing Rules, the Prospectus Rules
and the Disclosure and Transparency Rules of the UK Financial
Conduct Authority and to the rules of the London Stock Exchange,
and will be subject to the Listings Requirements (to the extent
applicable to secondary listed companies).
The Company is not registered as an external company in South
Africa.
The Company has its financial year-end at 31 August.
The Company has appointed Computershare Investor Services
Proprietary Limited as its transfer secretaries in South Africa
with its main place of business at Ground Floor, 70 Marshall
Street, Johannesburg, 2001. The Company has appointed
Computershare Investor Services PLC as its Registrar in the UK
with its main place of business at The Pavilions, Bridgwater Road,
Bristol BS99 6ZZ.
17. CORPORATE GOVERNANCE
The UK Corporate Governance Code (“Corporate Governance Code”)
sets out standards of good practice in relation to board
leadership and effectiveness, remuneration, accountability and
relations with shareholders. Listed companies are required to
report on how they have applied the main principles of the
Corporate Governance Code, and either to confirm that they have
complied with the Corporate Governance Code’s provisions or, where
they have not, to provide an explanation.
As a UK-listed investment trust company, the principal reporting
obligation is driven by the Corporate Governance Code. However,
as listed investment trust companies differ in many ways from
other listed companies, the Association of Investment Companies
has drawn up its own set of guidelines, the AIC Code of Corporate
Governance (“AIC Code”), which addresses the governance issues
relevant to investment companies and meets the approval of the
Financial Reporting Council. It should be noted that, as an
investment trust, most of the Company’s day-to-day
responsibilities are delegated to third parties, the Company has
no employees and the directors are non-executive. Thus, not all
the provisions of the Corporate Governance Code are applicable to
the Company.
Throughout the financial year ended 31 August 2017 and up to and
including the date of this document the Company considers that it
has complied with the recommendations of the AIC Code and the
provisions contained within the Corporate Governance Code that
are relevant to the Company, except the provisions relating to:
- the role of the chief executive;
- executive directors’ remuneration;
- the need for an internal audit function; and
- nomination of a senior independent director.
The Board comprises the Chairman and 4 Non-Executive Directors,
all of whom are considered by the Board to be independent. Details
of the Chairman, the Directors and their individual roles are
shown in paragraph 8. Their biographical details demonstrate a
range of corporate, financial and investment experience relevant
to the Company’s business and demonstrate sufficient calibre to
bring independent judgement on issues of strategy and performance
of the Company.
The Chairman chairs the Board and general meetings of the Company,
sets the agenda of such meetings and promotes the highest
standards of integrity, probity and corporate governance for the
Company, particularly at Board level. He ensures that the Board
receives accurate, timely and clear information, communicates
effectively with shareholders and facilitates the effective
contribution of Non-Executive Directors and constructive
relations between Non-Executive Directors. He also ensures that
any new directors participate in a full, formal and tailored
induction programme and that the performance of the Board, its
committees and individual Directors are evaluated at least once a
year. There is a clear structure for the effective running of
Board Committees. The Manager is accountable for the management
of the Company in terms of the Investment Management Agreement.
The Corporate Governance Code states that the Board should
determine whether a director is independent in character and
judgement and whether there are any relationships or circumstances
which are likely to affect, or could appear to affect, the
director’s judgement. As part of its annual self-assessment, the
Board critically evaluates the independence of individual
Directors and has concluded that all the Directors continue to
act independently in both character and judgement, taking account
of the interest of all shareholders. The Board is of the view that
length of service will not necessarily compromise the independence
and or contribution of directors of an investment trust company,
where continuity and experience can add significantly to the
strength of the Board.
18. SHARE CAPITAL
As at Tuesday, 7 November 2017 (being the latest practicable date
prior to the issue of this announcement) the issued and fully paid
share capital of the Company was as follows:
Authorised Issued and fully
paid
Class of Share Number Amount Number Amount
Ordinary 900 000 000 £900 000 110 328 938* £110 328
shares of 0.1
pence each
Note:
*BRGE holds 15 032 985 treasury shares that are included in the
above total. BRGE will place 10 200 311 treasury shares (Placement
Shares) on the JSE Listing Date.
The issued and fully paid ordinary share capital of the Company,
immediately following completion of the SA Placing and on JSE
Listing Date, is expected to be the same as set out above.
On the JSE Listing Date all shares in issue, including those
placed in the SA Placing, shall rank pari passu with each other
in all respects, including in respect of voting rights, dividends
and other distributions declared after the JSE Listing Date and
none will have any restrictions in relation to transferability.
19. MAJOR SHAREHOLDERS
As at Tuesday, 7 November 2017 (being the latest practicable date
prior to the publication of this announcement), the Company has
neither been notified of nor was the Company otherwise aware of
any shareholders who were directly or indirectly interested in
five per cent or more of the issued ordinary shares of the Company.
20. DIRECTORS’ STATEMENTS
The Directors of BRGE have no reason to believe that the working
capital available to BRGE and its subsidiaries will be
insufficient for at least 12 months from the JSE Listing Date.
The Directors of BRGE hereby confirm that BRGE has, to the best
of their knowledge and belief, adhered to all legal and regulatory
requirements of the LSE.
21. AVAILABILITY OF DOCUMENTS
Documents, such as financial statements, public announcements and
investor presentations which BRGE has made public over the last
two years and the constitutional documents of BRGE are available
on the Company’s website at (http://www.blackrock.co.uk/brge).
London
10 November 2017
Sponsor, Transaction Advisor and Sole Bookrunner in South Africa:
PSG Capital
Legal Adviser: Herbert Smith Freehills
Date: 10/11/2017 09:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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