Hansa Trust Plc - Update on Proposals

Further to the announcement on 26 November 2018, Hansa Trust plc (the "Company" or "Hansa Trust") today announces proposals for the reorganisation of the business and assets of the Company in order to effect its re-domiciliation to Bermuda (the "Proposal") pursuant to a scheme of arrangement under sections 895 to 899 of the Companies Act 2006 (the "Scheme").

 

Subject to the approval of the Proposal, Shareholders will be issued with new shares in Hansa Investment Company Limited ("New Hansa") pursuant to the Scheme.

 

Background

 

The Board has historically deemed it appropriate for Hansa Trust to be domiciled in the UK, benefiting from UK Investment Trust status. However, the Board has become increasingly concerned about the recent political climate in the UK and the instability and uncertainty this creates for Hansa Trust. The Board has given consideration as to how best protect Hansa Trust's business from the risks of unfavourable political developments in the UK and concluded that Hansa Trust should redomicile to an alternative jurisdiction.

 
In that regard, the Board undertook a review of five possible locations that would enable Hansa Trust to mirror its existing investment strategy, portfolio and capital structure while seeking to avoid any material impact on its returns. The countries considered were Bermuda, Ireland, Luxembourg, the Netherlands and Switzerland. Following this analysis, and a consultation with shareholders, the Board concluded that re-domiciling the business of Hansa Trust to Bermuda would best achieve this objective.

 
The intention is that New Hansa will be as similar to Hansa Trust as law and regulation will permit. In particular, the investment portfolio of Hansa Trust will become the investment portfolio of New Hansa with a materially consistent investment strategy.  

 

The Board of New Hansa will consist of five directors with the necessary skills and experience. Jonathan Davie has been appointed as an independent non-executive director and will take on the role of Chairman and William Salomon has been appointed as a non-independent non-executive director. Both are currently directors of Hansa Trust thereby providing governance continuity. Three new independent non-executive directors - Richard Lightowler, Nadya Wells and Simona Heidempergher - have also been appointed and further details on the Board are included in the New Hansa Prospectus.

 

The Scheme

 

The Scheme process requires the approval of Shareholders and the sanction of the Court under Part 26 of the Companies Act 2006. 

 
Pursuant to the Scheme, New Hansa will allot and issue to Shareholders the following New Hansa Shares:

 
for every one Ordinary Share held at the Scheme five New Hansa Ordinary Shares Record Time

 
for every one 'A' Ordinary Share held at the five New Hansa 'A' Ordinary Scheme Record Time Shares

 

The five-for-one issue is intended to assist with the practicalities of investors choosing to invest through platforms, regular savings schemes or by way of dividend reinvestment as they would be left with a smaller potential cash balance following any investment. This may increase the attractiveness of the New Hansa Shares to potential investors and may also increase the liquidity in the market for the New Hansa Shares. Shareholders should note that the five-for-one issue will not affect the overall value of their holdings because although the share price will effectively be divided by five, they will have five times the number of shares previously held.