APR Apr Energy

RNS No 6286m
SCOTTISH NATIONAL TRUST PLC
13th August 1998


THE SCOTTISH NATIONAL TRUST PLC ("the Company")

The following is the text of a letter from the
Chairman of Scottish National Trust PLC to
shareholders which is to be posted today:


" Dear Shareholder,

Introduction

I am writing in response to the letter ("the Abpref
letter") issued on 7 August 1998 by Aberdeen
Preferred Income Trust PLC and Aberdeen Preferred
Securities PLC relating to their unsolicited offers.
This purported to "set the record straight".

Shareholders should not be misled by the Abpref
letter. I urge you to consider carefully the
following:

the lack of asset backing for the Abpref Offers;

Abpref's emphasis on high income yield which puts
capital at greater risk; and

the merits of the Gartmore SNT investment portfolio,
managed by the same highly regarded team at Gartmore
Scotland, which aims to achieve a balance between
income and capital growth.

Your Board is recommending that Shareholders who wish
to effect a continuation of their investment in a
split-capital investment trust as described in the
Reconstruction Circular should elect for Gartmore SNT
Shares by completing the Form of Election sent to you
with that circular.

All Shareholders are urged to approve the Gartmore
SNT Proposals by voting in favour of the resolutions
set out in the Notices of Meetings at the end of the
Reconstruction Circular. You should do so by
completing and returning the Forms of Proxy sent out
with that circular.

The lack of asset backing for the Abpref Offers

The values of the Abpref Offers set out in the Abpref
letter are based on the prices at which the relevant
securities were placed with a limited number of
institutional investors early last month. However,
the net asset value published on 12 August 1998 of
the Abpref Ordinary Shares was 132.7p, as compared to
their placing price of 160p.

Abpref states that the cover for the Abpref ZDP
Shares is 2.5 times but this figure reduces to 1.8
times if the more conservative basis for calculating
cover is used (see Appendix). It should be noted,
however, that their gross redemption yield is well in
excess of the average for such shares in the market
today. It must be reasonable to conclude that this
extra yield is needed to compensate investors for the
risk stemming from an investment policy which
emphasises high income rather than capital.

The risk within the Abpref portfolio

Abpref's investment policy is to provide the holders
of the Abpref Ordinary Shares with a high income
yield without unduly prejudicing the capital value of
their investment. The risk attaching to Abpref's high
yielding portfolio and to the Abpref Ordinary Shares
is that income growth will be difficult to achieve
and capital hard to maintain.

In the Abpref Offer Document, Abpref admits that it
places emphasis on those geared ordinary income
shares of other investment trusts whose
characteristics "should not result in significant
erosion of their capital value over their life". In
certain cases, however, the split-capital investment
trusts in whose shares Abpref invests themselves
invest in other split-capital investment trust
shares, including the Abpref Ordinary Shares. This
compounds the risk inherent in the Abpref portfolio.
In contrast, Gartmore SNT will have a portfolio yield
of less than half that of the Abpref portfolio and an
investment policy designed to achieve a balance
between income and capital growth through investment
predominantly in UK equities and convertible
securities.

Abpref claims that its structural gearing of
approximately 50 per cent. "may be regarded as being
effectively offset by the presence of its large
portfolio of fixed income securities". However, given
their high yield, these securities may be viewed as
carrying a higher degree of capital risk than is
appropriate for this purpose. Your Board does not,
therefore, accept Abpref's contention that the Abpref
Ordinary Shares are effectively only 25 per cent.
geared, and therefore less geared than the Gartmore
SNT Income Shares, as a valid representation of their
level of gearing.

Abpref has compared the effect on the Abpref Ordinary
Shares and the Gartmore SNT Income Shares of a
potential fall in value of the Abpref and Gartmore
SNT portfolios. Shareholders should, however,
consider which portfolio is the more likely to
experience such a fall, and in what circumstances
this might occur, given their very different nature.
It should be noted that the illustrations set out in
the Abpref letter take no account of any early
redemption penalties which Abpref might incur if such
a fall resulted in it being obliged to repay any of
its borrowings.

Acceptances to date

As at 3.00 p.m. on 6 August 1998, Abpref had
announced the following acceptances (excluding
concert parties):

                                         Shares         %           
Income Shares                          20,737,129     12.90         
Zero Dividend Preference Shares         2,909,166     4.56          
Stepped Preference Shares                297,367      0.93          
Capital Shares                           209,054      0.33          

This is very low, particularly when the make-up of
the acceptances is considered:

                            Income     Zero     Stepped     Capital      
                            Shares   Dividend  Preference   Shares
                                    Preference   Shares  
                                      Shares

BFS Income &            14,755,677                                    
Growth Trust plc             
("BFS")

Brewin Nominees          1,407,155     38,838   12,470        3,100       
Limited                   
                          
Others                   4,574,297  2,870,328  284,627      205,954      

BFS already has a significant holding of Abpref
Ordinary Shares.

Conclusion

Your Board which has been so advised by Greig
Middleton believes that, in comparing the respective
merits of the Abpref securities and the Gartmore SNT
Shares, Shareholders should have regard to the
underlying fundamentals. In particular, they should
note that Abpref's emphasis on high income yield puts
capital at greater risk, whereas Gartmore SNT's
investment policy is to achieve a balance between
income and capital growth.

Accordingly your Directors believe that the roll-over
options offered by Gartmore SNT are preferable to
those offered by Abpref and recommend that
Shareholders who wish to effect a continuation of
their investment in a split-capital investment trust
should elect for Gartmore SNT Shares.

Yours faithfully

A. J. Struthers
Chairman "


Enquiries

Greig Middleton             Robert Clinton/Jonathan Becher
                            - 0171 655 4000

Warburg Dillon Read         Will Rogers/Howard Myles/
                            John Korwin-Szymanowski
                            - 0171 567 8000

Gartmore                    Lucy Allan/David Ellis
                            - 0171 782 2000

The Directors of SNT accept responsibility for the
information contained in this document, save that the
only responsibility accepted in respect of that
information relating to Gartmore SNT and Abpref,
which has been compiled from published sources, is to
ensure that such information has been correctly and
fairly reproduced or presented. Subject as aforesaid,
to the best of the knowledge and belief of the
Directors (who have taken all reasonable care to
ensure that such is the case), the information
contained in this document is in accordance with the
facts and does not omit anything likely to affect the
import of such information.

END

MSCSFIFFDUAUFFA

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