F&C: Investors Capital Trust issues innovative roll-over proposals

Investors Capital Trust plc ("ICT"), the £324 million investment trust, has today issued a set of innovative roll-over proposals ahead of its impending wind-up on 28 February 2007.

The trust, which can trace its origins back to 1891, is managed by Rodger McNair of F&C Asset Management in Edinburgh.

In a statement issued to the London Stock Exchange this morning, the Directors of ICT outlined proposals which will offer Income and Zero Dividend Preference shareholders in the split capital trust a choice of whether to roll over some or all of their investment into shares in a 'new' Investors Capital Trust plc or realise some or all of their investment in cash.

The 'new' Investors Capital Trust is being established as a successor to the existing company. It will have two distinct portfolios; the first being a UK equities portfolio which at the outset will account for around 80% of the assets, with the second component being a higher yield portfolio consisting predominantly of corporate bonds. The 'new' Investors Capital Trust will also be managed by Rodger McNair.

Significantly, the proposals include an innovative capital structure, with two classes of share – A and B – which will rank equally in terms of their rights to capital in the event of a wind-up and in other respects. The only difference between the two share classes is that the A shares will carry a right to participate in dividends while the B shares will carry a right to receive a capital return at the same time as, and in an amount equal to, each dividend paid in respect of the A shares. The 'new' Investors Capital Trust is targeting an initial annual dividend and capital return of 5.35 pence per share.

Unlike its predecessor, the new Investors Capital Trust will not have a fixed life. However, shareholders will be given the opportunity to vote on its continuation at five-yearly intervals commencing in 2012 if the net asset value total return performance of the new company is less than that of the FTSE All-Share Capped 5% Index over the preceding five-year period.

Laurie Petar, Manager of Jupiter Monthly Income Fund, said: "The proposals announced by ICT today offer an innovative proposition to shareholders, which I believe is unique in the investment company marketplace. I would seriously consider continuing my support for ICT in the future."

Commenting on the proposals, Martin Haldane, Chairman of Investors Capital Trust, said: "The new structure is both simple yet innovative. The company will offer an attractive yield and the option of two share classes to meet the different tax requirements of investors. We believe this a very compelling offering and we are confident that many investors will want to roll-over their investment into the 'new' Investors Capital Trust."