NOT FOR RELEASE, PUBLICATION OR
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TO DO SO.
27 November 2024
EJF
Investments Ltd
("EJFI" or the
"Company")
Introduction of Liquidity Authority and Notice of
Extraordinary General Meeting
The Board of EJFI announces that it
has today published a shareholder circular (the "Circular") in respect of the
introduction of a tender offer mechanism that would allow (at the
discretion of the Board), Ordinary Shareholders to tender shares
once in each 12-month period for a period of five years.
The tender offer mechanism, referred
to in the Circular as the "Liquidity Option", would, if
implemented by the Board, allow Ordinary Shareholders to tender
some or all of their respective holdings of Ordinary Shares for a
cash price to be determined by the Board up to and including the
prevailing NAV per Ordinary Share from time to time. The Liquidity
Option in respect of a 12-month period would be subject to an
aggregate maximum of 5 per cent. of all Ordinary Shares then in
issue as at the date of the extraordinary general meeting of the
Company ("EGM")
(recalculated on each subsequent anniversary). The shareholder
authority for the Liquidity Option (the "Liquidity Authority") will allow
Ordinary Shareholders to tender shares once in each 12-month period
commencing on the date of the EGM and ending five years thereafter.
Upon conclusion of the five-year Liquidity Authority (the maximum
period permitted under Jersey law), the Board will evaluate the
renewal of the authority for an additional period.
At the same time, the Company is
also seeking a shareholder authority for a placing of up to
28,000,000 2029 ZDP Shares (the "ZDP
Placing") to provide flexibility
for its financing arrangements ahead of the repayment of the 2025
ZDP Shares on 18 June 2025.
The Circular contains details on the
terms and conditions of the Liquidity Option, together with a
notice convening an EGM to be held at 3.30 p.m. (GMT) on 17
December 2024.
The full text of the Chairman's
letter that accompanies the circular is included below.
The Circular, including the notice
of the EGM, and a form of proxy have been sent to shareholders. A
copy of the Circular will be submitted to the National Storage
Mechanism and will be made available for inspection at:
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
and on the Company's website:
https://www.ejfi.com/.
Terms used and not defined in this
announcement bear the meaning given to them in the
Circular.
ENQUIRIES
For the Investment
Manager
EJF Investments Manager
LLC
Adeeb Ahmed / Jay
Ghatalia
aahmed@ejfcap.com / JGhatalia@ejfcap.com
+44 203 752 6774 / +44 203 752
6776
For the Company Secretary and
Administrator
Apex Financial Services (Alternative
Funds) Limited
ejficosec@apexgroup.com
+44 204 549 0721
For the Broker
Panmure Liberum Limited
Darren Vickers
ejfinvestments@liberum.com
+44 203 100 2222
Letter from the Chair
INTRODUCTION
The Company's board of Directors
(the "Board") is seeking an
authority (the "Liquidity
Authority") to introduce a tender offer mechanism (to be
exercised at the discretion of the Board) which would allow
Ordinary Shareholders to tender shares once in each 12-month period
for a period of five years.
The tender offer mechanism, referred
to herein as the "Liquidity
Option", would allow Ordinary Shareholders to tender some or
all of their respective holdings of Ordinary Shares for a cash
price to be determined by the Board up to and including the
prevailing NAV per Ordinary Share from time to time. The Liquidity
Option in respect of a 12-month period would be subject to an
aggregate maximum of 5 per cent. of all Ordinary Shares then in
issue as at the date of the EGM (recalculated on each subsequent
anniversary). The Liquidity Authority will allow Ordinary
Shareholders to tender shares once in each 12-month period
commencing on the date of the EGM and ending 5 years
thereafter.
At the same time, the Board is
considering potential financing options ahead of the due date for
repayment of the 2025 ZDP Shares on 18 June 2025. Whilst no
decision has been taken, the Company is also seeking a shareholder
authority for a placing of up to 28,000,000 2029 ZDP Shares (the
"ZDP Placing") should the
Board consider this to be the preferred form of
financing.
1.
BACKGROUND TO AND REASONS FOR THE
LIQUIDITY OPTION
1.1 The
Board recognises the discount to NAV at which the Company's
Ordinary Shares have traded and, whilst the Company's long term
objective is to increase its scale, it would like to provide an
opportunity for Shareholders to receive a return of capital for
their Ordinary Shares at a premium to the Company's current
prevailing share price (which may be significant), whilst also
providing an element of NAV per Ordinary Share accretion to all
Shareholders.
1.2
The Board believes that the introduction of the
Liquidity Option has the potential to improve liquidity in the
market for the Company's Ordinary Shares and to potentially reduce
the discount to NAV at which the Company's Ordinary Shares
trade.
2.
LIQUIDITY OPTION
2.1 At
such time as the Board may determine (in its sole and absolute
discretion), Ordinary Shareholders may be invited to tender
Ordinary Shares on the terms and subject to the conditions set out
in Part II of this Circular. Ordinary Shares will only be acquired
pursuant to the Liquidity Option if, inter alia, the Liquidity
Authority is approved at the EGM. Even if the Liquidity Authority
is approved, there is no guarantee the Board will decide to launch
a Liquidity Option, or as to the size and timing
thereof.
2.2 The
Board are proposing that, at such time as the Board may determine
(in its sole and absolute discretion), Panmure Liberum, acting as
principal, purchase from Ordinary Shareholders some or all of their
respective holdings of Ordinary Shares (subject to an aggregate
maximum of 5% of all Ordinary Shares, then in issue as at the date
of the EGM and recalculated on each subsequent anniversary (or
first Business Day following such anniversary) in respect of the
tender offer to be made in that following 12-month period)
("Liquidity Option Entitlement of
Ordinary Shares") for cash (at a value to be determined by
the Board up to and including the prevailing NAV per Ordinary Share
from time to time (the "Tender
Price")). Following such purchase, the Company shall
purchase from Panmure Liberum, and Panmure Liberum shall sell to
the Company, all the purchased shares pursuant to a repurchase
agreement to be entered into between the Company and the Panmure
Liberum, at the Tender Price. The Liquidity Option will be open to
all Ordinary Shareholders (other than Restricted Shareholders) on
the Company's share register on the Liquidity Option Record Date,
who may participate by tendering all or a proportion of their
Liquidity Option Entitlement of Ordinary Shares.
2.3 The
Liquidity Option will be available to holders of Ordinary Shares
once in each 12 month period, commencing on the date of the EGM and
ending five years thereafter.
2.4 The
Liquidity Option will be available to holders of Ordinary Shares
once in each 12 month period, commencing on the date of the EGM and
ending five years thereafter.
3.
POTENTIAL REQUIREMENT FOR A RULE 9
WAIVER
3.1 In
the event that any launch of the Liquidity Option (and/or any
exercise by the Company of the buyback authority granted at any
annual general meeting) would result in the Manager and persons
acting or deemed to be acting in concert with it under the Takeover
Code being obliged to make a mandatory offer for the Company under
Rule 9 of the Takeover Code, the Company intends to seek a Rule 9
waiver from the Takeover Panel (and would incur associated costs)
at the relevant time and in any case before entering into any such
transaction.
4.
BACKGROUND TO THE ZDP
PLACING
4.1 The
Company currently has one series of ZDP Shares in issue, the 2025
ZDP Shares. The 2025 ZDP Shares are due for redemption on 18 June
2025 with an aggregate redemption sum, payable at redemption, of
approximately £27 million. The Board is currently considering the
finance options that are available to it and wishes to seek the
authority from Ordinary Shareholders that would allow it the
flexibility to issue a further class of ZDP Shares, should the
Company determine that the issue of ZDP Shares would be the most
appropriate source of funding in the future.
4.2
The Board wishes to
emphasise that they are exploring various potential sources of
financing for the Company and, whilst the Company is seeking an
authority for the ZDP Placing, no decision has currently been taken
on whether to launch the ZDP Placing, or as to the size and timing
thereof.
5.
THE ZDP PLACING
5.1
Subject to approval by the Board, the Company is seeking authority
to issue up to 28,000,000 2029 ZDP Shares pursuant to the ZDP
Placing. Full details of any such issuances would be contained in a
prospectus to be issued at the relevant time and may include a
mechanic whereby holders of 2025 ZDP Shares will have the
opportunity to 'roll over' their interests into 2029 ZDP
Shares.
5.2 The
ZDP Placing would be launched to enable the Company to raise
additional capital in the period set out in such prospectus to be
issued upon launch of the ZDP Placing, should the Board determine
that market conditions are appropriate.
5.3 The maximum
number of 2029 ZDP Shares available under the ZDP Placing is
intended to provide flexibility and should not be taken as an
indication of the number of 2029 ZDP Shares to be
issued.
5.4 The
ZDP Placing will not be underwritten. The terms and conditions
which shall apply to any subscription for 2029 ZDP Shares pursuant
to the ZDP Placing will be contained in a prospectus to be issued
in due course, should the Board elect to launch a ZDP
Placing.
6.
COST OF THE
PROPOSALS
6.1 The
Company will incur expenses in connection with the Proposals, which
would be customary for transactions of these types. The costs
incurred in connection with the Liquidity Option will be deducted
from the Net Asset Value per Ordinary Share when determining the
tender price per Ordinary Share. The treatment of costs incurred in
connection with any ZDP Placing will be described in any prospectus
published in connection with such ZDP Placing.
7.
ACTION TO BE
TAKEN
7.1 The
action to be taken in respect of the EGM depends on whether you
hold your Ordinary Shares in certificated form or in uncertificated
form (that is, in CREST).
Certificated
Shareholders
7.2
Please check that you have received a Form of Proxy for use in
respect of the EGM with this Circular.
7.3
Whether or not you propose to attend the EGM in person, you are
strongly encouraged to complete, sign and return your Form of Proxy
in accordance with the instructions printed thereon as soon as
possible, but in any event so as to be received by the Registrar
at Computershare Investor Services,
(Jersey) Limited c/o, The Pavilions, Bridgwater Road, Bristol BS99
6AH no later than 3.30 p.m. (GMT) on 13
December 2024.
7.4
Submission of the Form of Proxy will enable your vote to be counted
at the EGM in the event of your absence. The completion and return
of the Form of Proxy will not prevent you from attending and voting
at the EGM or any adjournment thereof, in person should you wish to
do so.
7.5 If you have
any queries relating to the completion of the Form of Proxy, please
contact Computershare Investor Services,
(Jersey) Limited on 0370 707 4040. Calls
are charged at the standard geographic rate and will vary by
provider. Calls outside the United Kingdom will be charged at the
applicable international rate. The helpline is open between 8:30
a.m. - 5.30 p.m., Monday to Friday excluding public holidays in
England and Wales. Please note that Computershare Investor Services, (Jersey) Limited
cannot provide any financial, legal or tax advice
and calls may be recorded and monitored for security and training
purposes.
7.6 Computershare
Investor Services, (Jersey) Limited can
only provide information regarding the completion of the Form of
Proxy and cannot provide you with investment or tax
advice.
Uncertificated
Shareholders
7.7 CREST
members can appoint proxies using the CREST electronic proxy
appointment service and transmit a CREST Proxy Instruction in
accordance with the procedures set out in the CREST Manual
(available via www.euroclear.com/CREST).
7.8
Whether or not you propose to attend the EGM in person, you are
strongly encouraged to complete your CREST Proxy Instruction in
accordance with the procedures set out in the CREST Manual as soon
as possible, but in any event so as to be received by the
Registrar, 3RA50, no later than 3.30
p.m. (GMT) on 13 December
2024.
7.9 This
will enable your vote to be counted at the EGM in the event of your
absence. The completion and return of the CREST Proxy Instruction
will not prevent you from attending and voting at the EGM, or any
adjournment thereof, in person should you wish to do so.
8.
BENEFITS OF THE
PROPOSALS
8.1 The Board
believes that the Proposals, should they be implemented, have the
potential to yield the following principal benefits:
8.1.1
improve liquidity in the market for the Ordinary Shares;
8.1.2
reduce the existing discount to NAV in respect of the Company's
Ordinary Shares; and
8.1.3
allow the Company to raise new funds pursuant to the ZDP Placing of
2029 ZDP Shares to make accretive investments in line with its
Investment Policy.
8.2
Holders of Ordinary Shares (and C Shares, if issued) will not
suffer any dilution of their voting rights as a result of the issue
of 2029 ZDP Shares pursuant to the ZDP Placing as the 2029 ZDP
Shares would not carry any voting rights, save in limited
circumstances.
9.
RECOMMENDATION
9.1 The
Directors consider all of the Resolutions to be in the best
interests of Shareholders as a whole and unanimously recommend that
Ordinary Shareholders vote in favour of all the Resolutions, as the
Directors intend to do in respect of their own beneficial holdings
(if any).
Yours faithfully
John Kingston III
Chair
About EJF Investments
Limited
EJFI's objective is to provide
shareholders with attractive risk adjusted returns through regular
dividends and capital growth over the long term. EJFI generates
exposure primarily to a diversified portfolio of loans issued by
financial institutions and related or similar assets in the U.S.,
U.K. and Europe.
EJFI currently invests primarily in
CDO Equity Tranches structured by an affiliate of EJF Capital LLC,
providing levered exposure to a highly diversified portfolio of
securities issued by U.S. financial institutions (banks and
insurance companies), these being Risk Retention
Investments.
EJFI is a registered closed-ended
limited liability company incorporated in Jersey under the
Companies (Jersey) Law 1991, as amended, on 20 October 2016 with
registered number 122353. The Company is regulated by the Jersey
Financial Services Commission (the "JFSC"). The JFSC is protected by both
the Collective Investment Funds (Jersey) Law 1988 and the Financial
Services (Jersey) Law 1998, as amended, against liability arising
from the discharge of its functions under such laws.
The JFSC has not reviewed or
approved this announcement.
LEI: 549300XZYEQCLA1ZAT25
Investor information &
warnings
The latest available information on
the Company can be accessed via its website at
www.ejfi.com.
This communication has been issued
by, and is the sole responsibility of, the Company and is for
information purposes only. It is not, and is not intended to be an
invitation, inducement, offer or solicitation to deal in the shares
of the Company. The price and value of shares in the Company and
the income from them may go down as well as up and investors may
not get back the full amount invested on disposal of shares in the
Company. An investment in the Company should be considered only as
part of a balanced portfolio of which it should not form a
disproportionate part. Prospective investors are advised to seek
expert legal, financial, tax and other professional advice before
making any investment decision.
