Subject to the company overall having adequate assets, the NAV of the zeros increases over time based on a pre-determined basis (i.e. from 29p on 3-Nov-09 to 40.5p on 30-Oct-14).
The capital raised by the zeros is pooled with the capital raised from other classes of share for the purpose on investing. However, the zeros have first call on the assets of the company at maturity. So at 30-Oct-14 the 40.5p per zero share is is satisfied before any capital payments to other classes of share. The EXISTING assets of the company are CURRENTLY adequate to cover the 40.5p per share requirement at 30-Oct-14 1.3 times.
So even if the asset value were to drop 23% from the current levels, the zeros will still be paid out at 40.5 per share in 2014.
I wonder if you might explain how it is that net asset value of the company is reported at 30 June 2010 as being 29.75p, whilst the the repayment entitlement of 40.5p on the planned winding up date of 30 October 2014 is stated to be covered 1.3 times at 30 April 2010.
Presumably these statements do not contradict one another, or they would not have been made. In what sense is the planned repayment of 40.5p covered 1.3 times?
I refer to the statement within the Accounts which reads as follows:
"A holder of New Zero Dividend Preference shares had an initial capital entitlement of 29.0p per share on 3 November 2009. At reorganisation, the Company’s capital structure was designed to provide the New Zero Dividend Preference shareholders with a pre-determined capital entitlement of 40.5p per Zero Dividend Preference share on 30 October 2014. At 30 April 2010 this entitlement amounted to 29.95p per share.
The repayment entitlement of 40.5p per New Zero Dividend Preference share at the planned winding up date was covered 1.3 times at 30 April 2010 and the Gross Redemption Yield, the annualised return on the market price, was 7.05 per cent. per annum as at that date."
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The Directors of Jupiter Second Split Trust PLC, Jupiter Second Enhanced Income Trust PLC and The Defined Capital Return Fund announced on 11 September the publication of circulars to their respective shareholders setting out details for a rollover of Jupiter Second Enhanced Income Trust PLC and The Defined Capital Return Fund into Jupiter Second Split Trust PLC, a new issue of shares by Jupiter Second Split Trust PLC and the extension of the planned life of Jupiter Second Split Trust PLC for a further five years to 31 October 2014. Jupiter Second Split Trust PLC has been managed by Philip Gibbs on behalf of Jupiter Asset Management Limited since its launch in November 2004.
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