14th Sep 2022 11:30
(Alliance News) - Fundsmith Emerging Equities Trust PLC on Wednesday said it intends to be placed in voluntary liquidation, with proceeds from winding up to be returned to its shareholders.
Fundsmith invests in consumer-oriented companies in developing countries. Its shares were up 10% to 1,338.78 pence each in London on Wednesday morning.
Fundsmith said that it believes the liquidation proposal is in the "best interests" of its shareholders, following discussions with the company's largest shareholders and advisers.
The company plans to publish a circular, setting out details of the proposal to place the company into members' voluntary liquidation, appoint a liquidator, and delist the company.
It will also said it will hold a general meeting, to seek approval from its shareholders.
Fundsmith noted that its board will vote their shares in favour of the resolution, representing 0.4% of shares.
It added that it has received indications from Fundsmith LLP that the company's partners and staff will also vote their shares in favour of the liquidation. The partners and staff have a 5.3% stake in Fundsmith.
If the resolution is approved, Fundsmith expects to be placed in voluntary liquidation be the end of November.
In August, Fundsmith said that, at June 30, basic net asset value per share was 1,263.70 pence down 16% from 1,512.90p at December 31.
It also reported a pretax loss of GBP69.4 million in the first half of the year, swinging from a profit of GBP10.4 million the previous year.
Fundsmith LLP Chief Executive & Chief Information Officer Terry Smith said: "We have always maintained that we would only run funds where we felt we had a particular edge that would allow us to deliver superior risk-adjusted returns.
"Whilst FEET has made a positive return since launch in 2014 it has fallen below our expectations and, unlike other fund managers who might seek to hold onto the fund for the sake of the fee income, we feel it would be in the best interests of shareholders to receive their investment back in cash through a liquidation of the portfolio and wind-up of the company."
By Sophie Rose; [email protected]
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