Ok, a 408 page explanatory booklet - very long winded. I will summarise the key points from what I understand from reading some of it. Please correct me where I am in error, unclear or have omitted key details.
1. Scheme will de-list EGI and transfer assets/shares to untis of Ellerston Fund which a non-listed management fund. This is being done so that redemption of units is priced closer to the Net Asset Value. The last reported Net Asset Value was $1.1518 after tax as at 26/6/2020.
2. There will be a charge for terminating the management agreement of 1.5% of funds under management so this will reduce NAV by this amount. The Ellerston Fund will waive management fees for new EGI unit holders for 2 years which equates to 1.5% of funds under management (0.75%pa) to recoup these management fees for unit holders over a 2 year period.
3. You can subscribe for shares (up to the amount you hold) at the Election Calculation Date (5/6/2020), closing price was $1.065.
4. You will need to complete KYC forms - yuck! Or sell EGI shares on ASX by the 7th August 2020. For shareholders who do not complete the KYC their units will be held by a custodian until the KYC forms are completed. KYC must be must be done by the 9/11/2021 or presumably you lose the rights to the units?
5. The Ellerston Fund currently has 26.2M units. Under the scheme there would be an additional 105.3M units issued for EGI shareholders + any additional shares subscribed for under the offer. Assets of EGI will be transferred to Ellerston Fund.
6. Withdrawals can be made in writing once the Scheme is implemented (scheduled to be 18/8/2020). It will typically take 5 days to process but up to 21 days. Withdrawals can be suspended at any time. Minimum withdrawal amount is $5,000
7. Withdrawal price is the NAV per unit less the buy/sell spread. Unit prices are available on the Ellerston Capital website. They are monthly and the latest pricing I can see is 31st May 2020, so not the greatest timely transparency
Buy/Sell Spread explanation: Buy/Sell Spread - The net asset value of the Ellerston Fund plus (in the case of issue) or less (in the case of withdrawal) transaction costs being (in the case of issue) an estimate by the Responsible Entity of total costs that would be incurred in buying afresh the assets of the Fund or (in the case of withdrawal) an estimate by the Responsible Entity of total costs of selling the assets of the Fund. In either case the Responsible Entity may estimate zero or make an estimate having regard to the actual costs of issue or withdrawal as the case may be.
I am a small holder and am thinking whether it is worth going through all the paperwork to potentially have a better exit price. Would be very happy for mothers to share their opinions on this scheme.
EGI Price at posting:
$1.05 Sentiment: None Disclosure: Held
