Subject to certain minimum and maximum thresholds which may be set by the Board of BMO Managed Portfolio Trust plc (the “Board”) from time to time, shareholders have the right to convert their Income shares into Growth shares and/or their Growth shares into Income shares upon certain dates, the next of which will be 25 October 2018 and then annually or close to annually thereafter (subject to the Articles of Association of the Company). Under current law, such conversions will not be treated as disposals for UK capital gains tax purposes.
The Board may, in its sole and absolute discretion, specify a minimum number of converting shares which are to be converted by a shareholder in the case of either the Income shares or Growth Shares.
The minimum amount for the 25 October 2018 Conversion is 1,000 shares per shareholder or the whole shareholding, whichever is lower.
The Board will specify a minimum net value of assets to be transferred from a Portfolio on any Conversion date, and may change any such minimum from time to time. If on any Conversion Date, the value of the assets to be so transferred is less than such specified minimum, then the Board may, in its sole and absolute discretion, cancel and such conversion.
The minimum net value of assets in aggregate for the 25 October 2018 Conversion is £250,000.
In previous years, applications to convert shares has been lower than the minimum that was specified and to date, no share conversions have proceeded. A significant minimum has to be set in order to justify the costs of the exercise.
The Board may set a maximum number of Growth shares or Income shares which may be converted on any Conversion Date and may change such maximum from time to time. If on a Conversion date, the number of Growth shares or Income shares for which conversion notices have been delivered would exceed the limit, the shares will be reduced pro rata.
The maximum amount for the 25 October 2018 Conversion is 10% of the Income shares and 10% of the Growth shares in issue.
Shares will be converted into the other share class by reference to the ratio of the relative underlying NAVs of the Growth shares and Income shares (as set out in more detail in the Company’s Articles of Association). As noted in the Annual Report and Financial Statements, a resolution will be proposed at the AGM to approve certain amendments to the conversion mechanics. If such resolution is approved the expenses of the Conversion will, at the discretion of the Board be borne by the Company. Only the Income shareholders are entitled to receive dividends. The Company shall announce the Conversion Ratio applicable on the Conversion Date or Deferred Conversion Date and the number of resulting shares. The Board has discretion to defer the Conversion Date, inter alia, in the event that the level of conversions is above a certain materiality threshold in order to facilitate realignment of the Company’s portfolios in order to effect the conversions in as effective a manner as possible. The Deferred Conversion Date will under normal circumstances not be more than one month later than the originally stated Conversion Date.