Aberforth Split Level Income Trust plc

Capital Structure

Classes of share, structural gearing and duration

Share Capital

The Trust has a split level capital structure consisting of 190,250,000 Ordinary Shares and 47,562,500 Zero Dividend Preference (ZDP) Shares. The Trust’s investment objective is to provide Ordinary Shareholders with a high level of income, together with the potential for income and capital growth, and to provide ZDP Shareholders with a pre-determined final capital entitlement of 127.25p on the planned winding up date of 1 July 2024.

Full details of the Trust's capital structure, including the rights attached to the Ordinary Shares and ZDP Shares, are set out in the Trust's Articles of Association. These are available to view or download from our Literature Library.

Ordinary Shares

All net income earned by the Trust is attributable to the Ordinary Shares and the Trust intends to distribute substantially the whole of its net income in each financial year in accordance with the Trust’s investment objective.

In addition, Ordinary Shareholders are entitled to the net assets of the Trust on a winding up, after all liabilities of the Trust have been settled and the entitlements of the ZDP Shares have been met. Ordinary Shareholders will also be entitled on a winding up to receive any undistributed revenue reserves of the Trust (which will be paid in the form of a preliquidation dividend or during the course of the liquidation), subject to all creditors of the Trust having been paid out in full and even if the cover multiple on the ZDP Shares is at the time less than 1.

Zero Dividend Preference Shares

The ZDP Shares were issued with a targeted final capital entitlement of 127.25p per ZDP Share on a winding up of the Trust on the planned winding up date of 1 July 2024.

The holders of ZDP Shares are not entitled to receive dividend payments.

Structural Gearing

The Trust’s capital structure is such that the underlying value of assets attributable to the Ordinary Shares will be geared relative to the rising capital entitlements of the ZDP Shares. The Ordinary Shares are therefore geared by the ZDP Shares.

Accordingly, the Ordinary Shares should be regarded as carrying above average risk.

Duration

The Trust has a planned life lasting until 1 July 2024 and the Directors are required by the Articles to convene a general meeting of the Trust on, or within the three months prior to 1 July 2024, at which a special resolution will be proposed to wind up the Trust voluntarily by not later than the planned winding up date.

As these arrangements are designed to ensure that the ZDP Shareholders will be entitled to realise their investment, weighted voting provisions shall apply in respect of this resolution so as to ensure that this resolution will be passed if any shareholder votes in favour. However, before this date, the Directors will examine means whereby holders of Ordinary Shares may effectively continue their investment in a tax efficient manner while allowing the ZDP Shareholders to realise their investment. The Directors may be released from the obligation to call a general meeting if a special resolution has been passed to that effect not later than 1 July 2024.