REG - Henderson Int Income - Publication of Circular

Henderson International Income TrustAnnouncement

17/04/2025 07:00

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RNS Number : 3706F  Henderson Intl. Income Trust PLC  17 April 2025

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED IN IT ARE NOT FOR RELEASE,
PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN,
INTO OR FROM THE UNITED STATES OF AMERICA (INCLUDING ITS TERRITORIES AND
POSSESSIONS, ANY STATE OF THE UNITED STATES AND THE DISTRICT OF
COLUMBIA), AUSTRALIA, CANADA, JAPAN, NEW ZEALAND, THE REPUBLIC OF SOUTH
AFRICA, ANY MEMBER STATE OF THE EEA OR ANY OTHER JURISDICTION IN WHICH THE
SAME WOULD BE UNLAWFUL.

This announcement is not an offer to sell, or a solicitation of an offer to
acquire, securities in the United States or in any other jurisdiction in
which the same would be unlawful. Neither this announcement nor any part of it
shall form the basis of, or be relied on in connection with, or act as an
inducement to enter into, any contract or commitment whatsoever.

 

17 April 2025

 

Legal Entity Identifier: 2138006N35XWGK2YUK38

Henderson International Income Trust plc ("HINT")

Combination with JPMorgan Global Growth & Income plc ("JGGI")

 

Introduction

The Board of Henderson International Income Trust plc ("HINT" or the
"Company") announces that it has today published a shareholder circular (the
"Circular") setting out the proposals for the voluntary winding up of the
Company and combination with JPMorgan Global Growth & Income plc ("JGGI").

If the Scheme becomes effective, HINT Shareholders will, subject to the terms
and conditions set out in the Circular, roll over their holdings of HINT
Shares into New JGGI Shares.

Defined terms used in this announcement have the meanings ascribed to them in
the Circular unless the context otherwise requires.

Background

On 7 February 2025, the board of HINT (the "Board") announced that it had
agreed heads of terms with the board of JGGI (the "JGGI Board") for a
combination of the assets of the Company with JGGI. If approved, the
combination will be implemented by way of a scheme of reconstruction and
members' voluntary winding-up of the Company under section 110 of the
Insolvency Act (the "Scheme") and the associated transfer of the Company's
cash, assets and undertaking to JGGI in exchange for the issue of New JGGI
Shares to Shareholders (the "Issue"). The Scheme and the Issue are together
referred to as the "Proposals".

The Board recognises that current market conditions have pushed the need for
larger, more liquid vehicles that offer highly competitive cost structures.
Against this climate, the Board has come to the conclusion, following
consultation with the Company's advisers and having considered Shareholder
feedback, that the Proposals offer the most attractive option for
Shareholders. The Proposals will provide Shareholders with access to a larger,
more liquid vehicle with an outstanding track record and a history of growing
dividends which focuses on the most attractive investment opportunities.

The Proposals are conditional upon, among other things, the approval of
Shareholders at the General Meetings and the approval by JGGI Shareholders of
the Issue. Shareholder approval for the Scheme is required at the First
General Meeting; and if such approval is forthcoming, further Shareholder
approval is required at the Second General Meeting in order to take the formal
steps of winding up the Company voluntarily, appointing the Liquidators to
implement the Scheme and applying for the cancellation of the listing of the
Shares on the Official List. In accordance with the Scheme, Shareholders will
be allotted New JGGI Shares at the same point at which the Company enters
liquidation.

Dividends

The Board has today announced a pre-liquidation interim dividend of 3.9 pence
per Share reflecting 1.95 pence per Share in respect of the period ended 28
February 2025 and 1.95 pence per Share for the period up to 31 May 2025 which,
subject to the Resolution to be proposed at the First General Meeting being
passed, will be paid to Shareholders prior to the Effective Date.

JPMorgan Global Growth & Income plc

If the Scheme becomes effective, HINT Shareholders will roll over their
holdings of HINT Shares into New JGGI Shares. Following implementation of the
Scheme, JGGI will continue to be managed by JPMorgan Funds Limited ("JPMF" or
the "JGGI AIFM") with the management of JGGI's portfolio delegated to JPMorgan
Asset Management (UK) Limited ("JPMAM" or the "JGGI Portfolio Manager"), in
accordance with its existing investment objective: namely to achieve superior
total returns from world stock markets. The management of JGGI's portfolio
will continue to be led by Helge Skibeli, James Cook and Tim Woodhouse.

For comparative purposes, the cumulative NAV total return of each of JGGI, the
Company and the JGGI Benchmark over various time periods to 31 March 2025 is
set out below.

Cumulative NAV Total Return (%)

                                           Over 1 year  Over 3 years  Over 5 years  Over 10 years
 JPMorgan Global Growth & Income plc       1.0%         33.3%         136.6%        218.3%
 Henderson International Income Trust plc  -0.5%        11.1%         67.6%         103.0%
 MSCI All Country World Index (Sterling)   4.9%         24.7%         94.7%         168.3%

 

Source: Morningstar, as at 31 March 2025. Past performance is not a guide to
current and future performance. The value of investments and any income from
them may fall as well as rise and you may not get back the full amount
invested. Percentages are rounded to the nearest decimal place.

 

JGGI Dividend policy

The JGGI Board's current intention is to pay quarterly dividends over the
course of each financial year which, in aggregate, total at least 4 per cent.
of the net asset value of JGGI as at the end of the preceding financial year.
Accordingly, at the start of each financial year, the JGGI Board announces
the distribution it intends to pay to shareholders in the forthcoming year in
four equal instalments. The JGGI Board has discretion to set the dividend at a
different level which is more in line with the wider market and other global
income trusts and funds if it considers it appropriate. JGGI has the ability
to pay dividends out of capital and does currently pay its dividends, in part,
out of its realised capital profits.

JGGI has indicated that it intends to declare dividends totalling 22.80 pence
per JGGI Share in respect of the financial year commencing 1 July 2024, which
represents a 23.6 per cent. increase on the total dividend of 18.44 pence per
JGGI Share paid in the previous financial year (ended 30 June 2024).

HINT Shareholders receiving New JGGI Shares under the Scheme will not be
entitled to receive JGGI's fourth interim dividend for the year ending 30 June
2025, which will be declared in May 2025. In the absence of unforeseen
circumstances, it is the intention of the JGGI Board that this fourth interim
dividend will be paid on or around 23 June 2025 to JGGI Shareholders on JGGI's
register of shareholders as at close of business on 23 May 2025.  HINT
Shareholders will rank fully for all dividends declared by JGGI on or after
the date of Admission.

Further information on JGGI, including details of its investment strategy and
key characteristics of its portfolio, are set out in Part 2 of the Circular.

Benefits of the Proposals

The Board believes that the Proposals have a strong rationale, which includes
the following benefits for HINT Shareholders:

Strong investment performance: JGGI has generated NAV total return per JGGI
Share of 1.0 per cent., 33.3 per cent., 136.6 per cent., and 218.3 per cent.
over the one, three, five and 10 years to 31 March 2025, which compares to
HINT's NAV total return per Share of -0.5 per cent., 11.1 per cent., 67.6 per
cent., and 103.0 per cent. over the same periods.

Improved share rating: HINT's Shareholders would benefit from an immediate
uplift in value given the relative ratings of the two trusts, with JGGI
trading on an average premium of 0.9 per cent. and HINT on an average discount
of 12.1 per cent. in each case over the 12 month period to 31 January 2025,
being the month-end immediately prior to the announcement of the Proposals.

Scale: the enlarged JGGI is expected to have net assets of approximately
£3.1 billion (on the basis of the companies' respective net asset values as
at 31 March 2025), further enhancing JGGI's position as the largest investment
trust in the AIC Global Equity Income sector.

Liquidity: the scale of the enlarged JGGI should further improve secondary
market liquidity for both groups of shareholders. The average daily volume in
JGGI Shares for the 12 months to 31 March 2025 was £6.6 million, providing a
significant enhancement to liquidity for HINT Shareholders.

Consistent dividends: JGGI's dividend policy is to make quarterly
distributions with the intention of paying dividends totalling at least 4 per
cent. of its NAV per share as at the end of the preceding financial year,
funded by distributable reserves where necessary. This policy provides JPMAM
with the flexibility to adapt the portfolio to meet different market
environments, which aligns favourably with HINT's recently enhanced investment
and distribution policy. HINT's policy also enables the Directors to utilise
distributable reserves to supplement dividends paid to Shareholders thereby
enabling HINT to invest in stocks, regions or sectors that would otherwise be
excluded due to their yield. These policies have resulted in an annualised
dividend growth rate of 7.2 per cent. since the start of the 2018 financial
year for JGGI, as compared to HINT's annualised dividend growth rate of 6.4
per cent. over the same period.

Contribution to costs: HINT Shareholders and JGGI Shareholders will be
insulated from a significant proportion of the costs of the Proposals as a
result of the JPMF Cost Contribution (as described further below).

Reduced management fee: HINT's Shareholders will benefit from significantly
lower management fees as part of the enlarged JGGI. The incremental management
fee payable by the enlarged JGGI will be 0.300 per cent. of JGGI NAV per
annum, resulting in an expected blended management fee of 0.385 per cent. per
annum on the enlarged JGGI's NAV, which compares to the existing HINT
management fee of 0.575 per cent. of NAV per annum.

Lower ongoing charges: HINT and JGGI shareholders will benefit from an
estimated annual ongoing charge of 0.43 per cent., a significant reduction to
HINT's annual ongoing charge of 0.77 per cent.

Combined shareholder base: there is significant overlap between HINT's and
JGGI's top 20 shareholders, with over 83 per cent. of HINT's Shareholders also
being shareholders of JGGI. This will allow Shareholders the opportunity to
consolidate their investments into a larger, more liquid investment trust.

Track record of consolidating investment trusts: JGGI has an established track
record of combining investment trusts. JGGI completed a merger with The
Scottish Investment Trust plc in August 2022, JPMorgan Elect plc in December
2022 and JPMorgan Multi-Asset Growth & Income plc in March 2024.

Costs of implementing the Proposals and JPMF Cost Contribution

Costs of the Company

The costs directly incurred by the Company in connection with the
implementation of the Proposals which primarily comprise legal fees, financial
advisory fees, the remuneration payable to the Liquidators, other professional
advisory fees, printing costs, an additional fee payable to the HINT Directors
commensurate to the level of additional work required to be undertaken by them
in connection with the implementation of the Scheme, the Debt Advisory Costs
(being those legal and advisory fees incurred by HINT in relation to the
substitution of JGGI for the Company as the issuer of the HINT FRNs and the
inclusion of the holder of the HINT FRNs in the JGGI Security Trust and
Intercreditor Deed), and other applicable expenses, subject to the exclusions
referred to in the following paragraph (the "HINT Implementation Costs") will
be offset in full within the formula asset value ("FAV") calculation as a
result of the JPMF Cost Contribution.

The following costs do not form part of the HINT Implementation Costs and will
be borne by the HINT Shareholders and reflected in the HINT FAV: (i) any costs
of the realignment or realisation of the Company's portfolio so that the
Rollover Pool transferred to JGGI pursuant to the Transfer Agreement contains
assets that are suitable for transfer to JGGI and also to ensure that the
Company has sufficient cash to meet any remaining liabilities; (ii) any costs
associated with the termination of Company's existing management arrangements
(including the HINT Manager Termination Fee); and (iii) the HINT FRN Holder
Costs, being the fees payable to the HINT FRN Holders in relation to the
substitution of JGGI as issuer of the HINT FRNs (including any legal and
advisory fees of the HINT FRN Holders). The costs associated with the
termination of the HINT Manager (including the HINT Manager Termination Fee)
and the HINT FRN Holder Costs are not expected to exceed £535,000. As at the
date of the Circular, it is not possible to provide an accurate estimate of
the costs to be incurred in connection with the realignment or realisation of
the Company's portfolio.

Costs of JGGI

The costs directly incurred by JGGI in connection with the implementation of
the Proposals which primarily comprise legal fees, financial advisory fees,
other professional advisory fees, printing costs, the Debt Advisory Costs
(being those legal and advisory fees incurred by JGGI in relation to the
substitution of JGGI for the Company as the issuer of the HINT FRNs and the
inclusion of the holder of the HINT FRNs in the JGGI Security Trust and
Intercreditor Deed), and other applicable expenses, subject to the exclusions
referred to in the following two paragraphs (the "JGGI Implementation Costs")
will be offset in full within the FAV calculation as a result of the JPMF Cost
Contribution.

The JGGI Debt Costs do not form part of the JGGI Implementation Costs and will
be borne by the JGGI Shareholders and reflected in the JGGI FAV.

The following costs do not form part of the JGGI Implementation Costs and will
be borne by the enlarged JGGI (but not reflected in the JGGI FAV): (i) any
realignment costs, stamp duty, SDRT or other transaction taxes incurred by
JGGI for the acquisition of assets from HINT; and (ii) any fees payable in
respect of the admission of the New JGGI Shares issued in connection with the
Scheme to trading.

JPMF Cost Contribution

JPMF has agreed to contribute to the costs of the Proposals for an amount
equal to the HINT Implementation Costs and the JGGI Implementation Costs
(together, the "Direct Transaction Costs") in connection with the
implementation of the Scheme (the "JPMF Cost Contribution"). The JPMF Cost
Contribution will be provided by means of a fee waiver of a proportion of
JPMF's annual management fee on the enlarged JGGI's NAV following completion
of the Scheme, which reflects the proportion of the Company's assets
represented by the New JGGI Shares. JPMF's annual management fee will be
waived over time until such time as the aggregate value of the management fee
waived equals the JPMF Cost Contribution. The JPMF Cost Contribution will be
for the benefit of each of the shareholders of HINT and JGGI by means of an
adjustment in their respective FAVs equal to the Direct Transaction Costs paid
or accrued, for the purposes of calculating entitlements under the Scheme.

In the event that the Scheme is not implemented, each party will bear its own
costs in respect of the Proposals and JPMF will not make any contribution
towards such costs.

HINT FRNs

On 17 April 2025, the holders of the Company's fixed rate senior unsecured
notes (the "HINT FRN Holders") entered into the Novation Documents approving,
amongst other matters, the proposed novation of the HINT FRNs to JGGI and the
substitution of JGGI in place of the Company in its capacity as issuer of the
HINT FRNs (the "Novation") from the Effective Date. JGGI also entered into,
simultaneously with entering into the Novation Documents, amendments to the
JGGI Security Trust and Intercreditor Agreement and will, on the Effective
Date, enter into a supplemental floating charge with the JGGI Security Agent
on substantially the same terms as the JGGI Floating Charge, in each case, to
ensure the HINT FRN Holders rank pari passu with the existing JGGI Creditors.
As the new issuer, JGGI will, on the Effective Date, issue new notes to HINT
FRN Holders pursuant to the Novation Documents.

Liquidators' Retention

The Liquidators' Retention is estimated at £100,000 and will be retained by
the Liquidators to meet any unknown or unascertained liabilities of the
Company. To the extent some or all of the Liquidators' Retention remains when
the Liquidators are in a position to close the liquidation, this will be
returned to HINT Shareholders on the Register as at the Effective Date
(excluding Dissenting Shareholders), together with any other funds remaining
in the Liquidation Pool, pro rata to the number of Shares held by them on such
date. If, however, any such amount payable to any HINT Shareholder is less
than £5.00, it shall not be paid to the HINT Shareholder but instead shall be
paid by the Liquidators to the Nominated Charity.

Management of the Company's portfolio prior to implementation of the Scheme

It is intended that the Company's portfolio will be realigned such that, by
the Calculation Date, the Company's portfolio will contain investments or
assets that are consistent with JGGI's investment strategy. Accordingly, the
Rollover Pool transferred to JGGI pursuant to the Transfer Agreement on the
Effective Date will consist of investments or assets that are suitable for
transfer to JGGI having regard to JGGI's investment objective and policy,
together with cash and cash equivalents.

Conditions of the Proposals

Implementation of the Proposals is subject to a number of conditions,
including:

 * the passing of the Resolution to be proposed at the First General Meeting and
the Resolution to be proposed at the Second General Meeting, or any
adjournment of those meetings, and any conditions of such Resolutions being
fulfilled;

 * the JGGI Scheme Allotment Resolution being passed and becoming unconditional
in all respects;

 * the Novation Documents becoming unconditional in all respects other than any
condition relating to the Scheme becoming effective and other ancillary
conditions precedent thereunder;

 * the approval of the Financial Conduct Authority and the London Stock Exchange
to the Admission of the New JGGI Shares to the Official List and to trading
on the Main Market of the London Stock Exchange, respectively, subject only to
allotment; and

 * and the Directors and the JGGI Directors resolving to proceed with the Scheme.

General Meetings

As noted above, the Proposals are conditional upon, amongst other things, HINT
Shareholders' approval of the Resolutions to be proposed at the First General
Meeting and the Second General Meeting. Both General Meetings will be held at
1 Finsbury Circus, London EC2M 7SH.

First General Meeting

The First General Meeting will be held at 12.30 p.m. on 12 May 2025.

The Resolution to be considered at the First General Meeting (which will be
proposed as a special resolution) will, if passed, approve the terms of the
Scheme set out in Part 4 of the Circular, amend the Articles to give effect to
the Scheme, and authorise the Liquidators to enter into and give effect to the
Transfer Agreement with JGGI, to distribute New JGGI Shares to HINT
Shareholders in accordance with the Scheme, to purchase the interests of any
Dissenting Shareholders and to apply to cancel the listing of the Shares with
effect from such date as the Liquidators may determine. To be passed, the
Resolution will require at least 75 per cent. of the votes cast in respect of
it, whether in person or by proxy, to be voted in favour of it at the First
General Meeting. The Scheme will not become effective unless and until,
amongst other things, the Resolution to be proposed at the Second General
Meeting has also been passed.

Second General Meeting

The Second General Meeting will be held at 9.00 a.m. on 28 May 2025.

At the Second General Meeting, a special resolution will be proposed which, if
passed, will place the Company into liquidation, appoint the Liquidators and
agree the basis of their remuneration, instruct the Company Secretary to hold
the books to the Liquidators' order, and provide the Liquidators with
appropriate powers to carry into effect the amendments to the Articles made at
the First General Meeting. The Resolution to be proposed at the Second General
Meeting is conditional upon, amongst other things, the passing of the
Resolution at the First General Meeting, the JGGI Scheme Allotment Resolution
being passed and becoming unconditional in all respects, the approval of the
Financial Conduct Authority and the London Stock Exchange to the Admission of
the New JGGI Shares to the Official List and to trading on the Main Market
respectively, and the Directors and the JGGI Directors resolving to proceed
with the Scheme. To be passed, the Resolution will require at least 75 per
cent. of the votes cast in respect of it, whether in person or by proxy, to be
voted in favour of it at the Second General Meeting.

 

Expected Timetable

                                                                                 2025
 Record date for the pre-liquidation interim dividend to Shareholders            2 May
 Latest time and date for receipt of blue Forms of Proxy and CREST voting        12.30 p.m. on 8 May
 instructions in respect of the First General Meeting
 JGGI General Meeting                                                            11.00 a.m. on 9 May
 First General Meeting                                                           12.30 p.m. on 12 May
 Latest time and date for Overseas Excluded Shareholders who wish to             market close on 12 May
 participate in the Scheme to contact the Company Secretary
 Payment date for the pre-liquidation interim dividend                           16 May
 Calculation Date                                                                market close on 21 May
 Shares disabled in CREST                                                        6.00 p.m. on 22 May
 Record Date for entitlements under the Scheme                                   6.00 p.m. on 22 May
 Suspension of trading in the Shares                                             7.30 a.m. on 23 May
 Latest time and date for receipt of pink Forms of Proxy and CREST voting        9.00 a.m. on 23 May
 instructions in respect of the Second General Meeting
 Suspension of listing of the Shares and Company's Register closes               7.30 a.m. on 28 May
 Second General Meeting                                                          9.00 a.m. on 28 May
 Effective Date for implementation of the Scheme and appointment of Liquidators  28 May
 Announcement of the results of the HINT FAV per Share and the JGGI FAV per      28 May
 Share
 CREST accounts credited with, and dealings commence in, New JGGI Shares         at, or soon after, 8.00 a.m. on 29 May
 Share certificates in respect of New JGGI Shares despatched                      not later than 14 Business Days

                                                                                 from the Effective Date

 Cancellation of listing of Shares                                               as soon as practicable after the Effective Date

The times and dates set out in the expected timetable of events above and
mentioned throughout the Circular may be adjusted by the Company in which
event details of the new times and dates will be notified, as requested, to
the Financial Conduct Authority, the London Stock Exchange and, where
appropriate, Shareholders. All references to time in the Circular are to UK
time.

 

 

This announcement does not contain all the information which is contained in
the Circular and HINT Shareholders should read the Circular before deciding
what action to take in respect of the Proposals.

 A copy of the Circular has been submitted to the National Storage Mechanism
and will shortly be available for inspection
at https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism)  and on the
Company's website at www.hendersoninternationalincometrust.com.

 

 

 

For more information please use the contact details below.

 

 Henderson International Income Trust plc                              Contact via Panmure Liberum Limited

 Panmure Liberum Limited                                               +44 (0)20 3100 2000

 Alex Collins

 Ashwin Kohli

 Corporate Secretary, Janus Henderson Secretarial Services UK Limited  +44 (0)20 7818 1818

 

 

 

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