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RNS Number : 5445B
Leverage Shares PLC
02 June 2023
`
Leverage Shares plc
2 June 2023
Notice to the ETP Securityholders of a Meeting of the LEVERAGE
SHARES 3X NETFLIX ETP
THIS NOTICE IS IMPORTANT AND REQUIRES THE IMMEDIATE ATTENTION OF
THE HOLDERS OF THE ETP SECURITIES. IF ANY ETP SECURITYHOLDER IS IN
ANY DOUBT AS TO THE ACTION THEY SHOULD TAKE, THEY SHOULD CONSULT
THEIR OWN INDEPENT PROFESSIONAL ADVISERS IMMEDIATELY. THIS NOTICE
MAY CONTAIN INSIDE INFORMATION FOR THE PURPOSES OF THE MARKET ABUSE
REGULATION (EU) 596/2014.
If you have recently sold or otherwise transferred your entire
holding(s) of ETP Securities referred to below, you should
immediately forward this document to the purchaser or transferee or
to the stockbroker, bank or other agent through whom the sale or
transfer was effected for transmission to the purchaser or
transferee
Leverage Shares PLC
2(nd) Floor, Block 5
Irish Life Centre
Abbey Street Lower
Dublin 1
D01 P767
Ireland
(the "Issuer")
LEVERAGE SHARES 3X NETFLIX ETP (ISIN: IE00BK5BZW43)
(together the "Relevant Series")
NOTICE IS HEREBY GIVEN that a meeting convened by the Issuer
(the "Meeting") of the ETP Securityholders of the Relevant Series
will be held at 2(nd) Floor, Block 5, Irish Life Centre, Abbey
Street Lower, Dublin 1, D01 P767, Ireland on 26 June 2023 (which is
at least 21 calendar days after the date hereof (exclusive of the
day on which this notice is given and of the day of the Meeting))
at 1.00pm Dublin time. Such Meeting will be held for the purpose of
considering and, if thought fit, passing the resolution set out in
Annex 1 hereto, which will be proposed as an Extraordinary
Resolution, in accordance with the provisions of Schedule 6
(Provisions for Meetings of the ETP Securityholders) of the master
trust deed originally dated 5 December 2017 as most recently
amended and restated on 16 August 2022 and as supplemented by a
supplemental trust deed dated 3 June 2020 (the "Trust Deed") made
between the Issuer and Apex Corporate Trustees (UK) Limited (the
"Trustee") and constituting the Relevant Series.
Capitalised terms used, but not defined, in this Notice shall
have the meaning given thereto in the Conditions of the ETP
Securities set out therein.
BACKGROUND
On 20 April 2022 the ETP Security Value of the ETP Securities of
the Relevant Series fell below 2% of the Principal Amount.
Condition 8.5(A)(1) provides "If on any Valuation Date (a
"Threshold Event Date") the ETP Security Value falls to less than
2.00 per cent. of the Principal Amount of the ETP Securities... The
Issuer shall give notice convening a meeting of the ETP
Securityholders on a date not less than 30 calendar days after the
Threshold Event Date for the purpose of considering an
Extraordinary Resolution which would have the effect of reducing
the Principal Amount of the ETP Securities to an amount which is
not less than 2.00 per cent of the ETP Security Value as at the
time of suspension of redemptions, in which event the suspension
will cease only if such Extraordinary Resolution is passed". To
date, the Issuer has not suspended redemptions of ETP Securities of
the Relevant Series, nor has the Issuer convened a meeting referred
to in Condition 8.5(A)(1) within 30 days of the Threshold
Redemption Date (the "First Matter").
Condition 8.7(B) provides "if on any Valuation Date falling on
or after the 60(th) calendar day following a Threshold Event, the
ETP Security Value is less than 2.00 per cent. of the Principal
Amount of such ETP Securities, the Issuer shall designate a
Mandatory Redemption Date in respect of the ETP Securities". To
date, the Issuer has not designated a Mandatory Redemption Event
with respect to the Relevant Series (the "Second Matter").
The Issuer is proposing to consolidate the ETP Securities of the
Relevant Series into ETP Securities with a proportionately higher
value, as detailed below. Such consolidation is reasonably expected
to improve the liquidity of the ETPs of the Relevant Series for
secondary market investors.
PROPOSED CONSOLIDATION OF THE ETP SECURITIES OF THE RELEVANT
SERIES
The Issuer is proposing to consolidate all of the ETP Securities
of the Relevant Series into ETP Securities with a proportionately
larger ETP Security Value of approximately US$ 10.00 per ETP
Security (the "Target ETP Security Value"), so that for every ETP
Security of the Relevant Series held by an ETP Securityholder, they
will hold a smaller number of ETP Securities after the
consolidation such that the resulting ETP Security Value is as
close as possible to the Target ETP Security Value. The number of
ETP Securities resulting from the consolidation relative to the
number of ETP Securities before the consolidation (the
"Consolidation Ratio") would be determined by the Issuer by
reference to the ETP Security Value of the Relevant Series on a
Valuation Date following approval of the Consolidation, as shall be
notified to ETP Securityholders, using the following formula:
Consolidation Ratio = Target ETP Security Value / V(t)
Where:
V(t) is the ETP Security Value on t; and
t is the Valuation Date determined and notified by the Issuer in
accordance with the Conditions.
The Consolidation Ratio will be rounded down to the nearest full
integer. If as a result of the Consolidation of the ETP Securities,
an ETP Securityholder would become entitled to a fraction of an ETP
Security, the Issuer will redeem such fractional ETP Security. The
Issuer will notify the Consolidation Ratio and any resulting
fractional shares to ETP Securityholders in accordance with the
Conditions no later than two (2) Business Days immediately
following V(t) . (the "Consolidation").
ETP Securityholders should be aware that it is not proposed to
amend the Principal Amount applicable to the Relevant Series
proportionate to the Consolidation. As the Consolidation will
result in an ETP Securityholder holding less ETPs (albeit at a
proportionately higher ETP Security Value), this will impact the
return an investor would receive on a Mandatory Redemption,
Optional Redemption or Final Redemption (a "Redemption Event"), if
the Principal Protection Amount is higher than the Pro-rata
Liquidation amount at the time of the Redemption Event (assuming
that the same number of ETPs are held at the Redemption Event as
held immediately after the Consolidation).
The below examples demonstrate the impact the Consolidation
would have (i) on an ETP Securityholder's economic interest in a
Series of ETP Securities; and (ii) on the value of the Principal
Protection Amount.
Example 1 - impact of consolidation (with no fractional ETP
Securities) on an ETP Securityholder's economic interest in a
Series of ETP Securities - for illustration purposes only
# ETP Securities Hypothetical Value economic
held by an ETP Value per ETP interest
Securityholder Security
Pre consolidation 600,000 US$0.006 US$3,600
effective date
----------------- --------------- ---------------
Consolidation 2,000 US$1.80 US$3,600
effective date [=600,000/300] [0.006*300]
----------------- --------------- ---------------
Example 2- impact of consolidation (with fractional ETP
Securities) on an ETP Securityholder's economic interest in a
Series of ETP Securities- for illustration purposes only
# ETP Securities Hypothetical Value economic
held by an ETP Value per ETP interest
Securityholder Security
Pre consolidation 605,000 US$0.006 US$3,630
effective
date
---------------- ------------------------ --------------- ---------------
Consolidation New ETP 2,016 US$1.80 US$3,628.80
effective Securities [=605,000/300 [0.006*300]
date rounded down]
---------------- ------------------------ --------------- ---------------
Fractional 200 US$0.006 US$1.20
ETP Securities [=605,000-(2,016*300)]
---------------- ------------------------ --------------- ---------------
Examples 1 and 2 demonstrate in two hypothetical contexts how a
consolidation would have no impact on an investor's economic
interest in a Series of ETP Securities.
Example 3 - impact of consolidation on the Principal Protection
Amount - for illustration purposes only
# ETP Securities Principal Principal Total Value
Amount Protection of Principal
Amount per Protection
ETP Security Amount
Pre consolidation 600,000 US$20 US$0.40 US$240,000
[2% of $20] [600,000*$0.40]
----------------- ---------- -------------- -----------------
Post consolidation 2,000 US$20 US$0.40 US$800
[2% of $20] [2,000*$0.40]
----------------- ---------- -------------- -----------------
Example 3 illustrates in a hypothetical context the impact a
consolidation would have on the total value of the Principal
Protection Amount. The Principal Protection Amount is relevant as
it would be the amount payable per ETP Security on a Redemption
Event in circumstances where the Principal Protection Amount is
higher than the Pro-rata Liquidation amount. Such a scenario might
arise where a significant decrease in the value of the Reference
Asset underlying the Relevant Series has occurred.
The Consolidation would be effected by a deed supplemental to
the Trust Deed prepared by the Issuer and in such form as the
Issuer considers necessary, appropriate or expedient to give effect
to the Consolidation (the "Consolidation Supplemental Trust
Deed").
PROPOSAL
The purpose of the Meeting is for the ETP Securityholders to
consider and, if thought fit, approve the Consolidation and to
waive any breaches of the Conditions which have occurred to date in
relation to the First Matter and the Second Matter (the
"Proposal"):
The Issuer is aware of 2 holders of ETP Securities, together
holding 12,450 ETP Securities of the Relevant Series, who have
indicated their intention to vote in favour of the Proposal.
Accordingly, if such indications are correct and if no other ETP
Securityholders of the Relevant Series choose to vote, it is
anticipated that the Proposal will ultimately be approved.
If the Proposal is approved by the Meeting, the Consolidation
would become effective on such date as shall be notified to the ETP
Securityholders of the Relevant Series by the Issuer.
FORM OF THE EXTRAORDINARY RESOLUTION
The resolution that will be put to the ETP Securityholders of
the Relevant Series at the Meeting in order to pass the Proposal is
set out in Annex 1 hereto. The Proposal is set out in a single
Extraordinary Resolution.
DOCUMENTATION
The Trustee has not been involved in the formulation or
negotiation of the Proposal (as defined herein) and, in accordance
with normal practice, the Trustee expresses no opinion on the
merits of the Proposal (which it was not involved in negotiating)
or the Extraordinary Resolution (as set out herein) and no opinion
on whether the ETP Securityholders would be acting in their best
interests voting for or against the Proposal or the Extraordinary
Resolution but on the basis of the information contained in this
Notice has authorised it to be stated that it has no objection to
the Extraordinary Resolution being submitted to the ETP
Securityholders for their consideration. The Trustee makes no
representation that all relevant information has been disclosed to
the ETP Securityholders in connection with the Proposal in this
Notice or otherwise. The Trustee is not responsible for the
accuracy, completeness, validity or correctness of the statements
made in this Notice or omissions therefrom. Nothing in this Notice
should be construed as a recommendation to the ETP Securityholders
from the Trustee to vote in favour of, or against, any of the
Proposal or the Extraordinary Resolution. The Trustee recommends
that the ETP Securityholders take their own independent
professional advice on the merits and the consequences of voting in
favour of, or against, each of the Extraordinary Resolution and the
Proposal.
No person has been authorised to make any recommendation on
behalf of the Issuer, the Trustee or the Issuing and Paying Agent
as to whether or how the ETP Securityholders should vote pursuant
to the Proposal. No person has been authorised to give any
information, or to make any representation in connection therewith,
other than those contained herein. If made or given, such
recommendation or any such information or representation must not
be relied upon as having been authorised by the Issuer, the Trustee
or the Issuing and Paying Agent.
This Notice is issued and directed only to the ETP
Securityholders of the Relevant Series and no other person shall,
or is entitled to, rely or act on, or be able to rely or act on,
its contents.
Each person receiving this Notice must make its own analysis and
investigation regarding the Proposal and make its own voting
decision, with particular reference to its own investment
objectives and experience, and any other factors which may be
relevant to it in connection with such voting decision. If such
person is in any doubt about any aspect of the Proposal and/or the
action it should take in respect of it, it should consult its
professional advisers.
QUORUM AND VOTING
The provisions governing the convening and holding of the
Meetings are set out in Schedule 6 to the Trust Deed (Provisions
for Meetings of ETP Securityholders).
Quorum
The quorum required at a meeting called to pass the
Extraordinary Resolution is two or more ETP Securityholders or
agents present in person holding or representing in the aggregate
more than 50 per cent. of the number of the ETP Securities for the
time being outstanding.
If a quorum is not present within 15 minutes from the time
initially fixed for the Meeting, the Meeting shall be adjourned
until such date, not less than 14 nor more than 42 calendar days
later at such time and place as the chairman of such meeting (the
"Chairperson") determines (the "adjourned meeting"). If a quorum is
not present within 15 minutes from the time fixed for the adjourned
meeting, the adjourned meeting will be dissolved. At least 14
calendar days' prior notice of a meeting adjourned through want of
a quorum shall be given in the same manner as for an original
meeting and such notice shall state the quorum required at the
adjourned meeting. The quorum required for any such adjourned
meeting will be two or more ETP Securityholders or agents present
in person being or representing ETP Securityholders, whatever the
number of the ETP Securities so held or represented.
Voting
The provisions for meetings of the ETP Securityholders is set
out in Schedule 6 of the Master Trust Deed. A holder of an ETP
Security may appoint a proxy in accordance with the relevant rules
and procedures of the Relevant Clearing System.
In order to exercise voting instructions an ETP Securityholder
must request the Relevant Clearing System to block the ETPs of the
Relevant Series in his own account and to hold the same to the
order or under the control of a Paying Agent not later than 48
hours before the time fixed for the Meeting in order to give voting
instructions to the relevant Paying Agent in respect of the votes
attributable to the blocked Relevant ETP Securities. Unless an ETP
Securityholder instructs otherwise, the chairman of the Meeting
shall be deemed to be appointed as the ETP Securityholder's proxy
for the Meeting. The Relevant ETP Securities so blocked will not be
released until the earlier of (i) the conclusion of the Meeting or,
where the Meeting is not quorate, the conclusion of the adjourned
meeting; and (ii) in respect of a form of proxy, not less than 48
hours before the time for which the Meeting is convened or the
revocation of such form of proxy where notice of such revocation
has been given to the relevant Paying Agent. Any voting
instructions received by the Registrar with respect to the Meeting,
shall, unless revoked in accordance with the provisions set out
herein, remain valid for any adjourned meeting.
Voting instructions must therefore be received by the Registrar
by 1.00 PM, 22 June 2023. The deadlines set by any intermediary,
broker, dealer, commercial bank, custodian, trust company or other
nominee institution and each Relevant Clearing System for the
submission and (in the limited circumstances where permitted)
revocation of voting instructions may be earlier than the relevant
deadlines specified above. You should check with your relevant
custodian or nominee immediately to understand what earlier
deadlines are set by your nominee institution or institutions.
Any proxy so appointed or representative so appointed shall so
long as such appointment remains in full force be deemed, for all
purposes in connection with the relevant meeting or adjourned
meeting of the ETP Securityholders, to be the holder of the ETP
Securities to which such appointment relates and the holder of the
ETP Securities shall be deemed for such purposes not to be the
holder or owner, respectively.
Each question submitted to the Meeting shall be decided by a
show of hands unless a poll is (before, or on the declaration of
the result of, the show of hands) demanded by the chairman, the
Issuer, the Trustee or one or more persons representing 2 per cent.
of the aggregate number of the ETP Securities outstanding.
Unless a poll is demanded, a declaration by the chairman that a
resolution has or has not been passed shall be conclusive evidence
of the fact, without proof of the number or proportion of the votes
cast in favour of or against it.
If a poll is demanded, it shall be taken in such manner and
(subject as provided below) either at once or after such
adjournment as the chairman directs. The result of the poll shall
be deemed to be the resolution of the Meeting as at the date it was
taken. A demand for a poll shall not prevent the Meeting continuing
for the transaction of business other than the question on which it
has been demanded.
A poll demanded on the election of a chairman or on a question
of adjournment shall be taken at once.
On a poll, every such person has one vote in respect of each ETP
Security of such Series of ETP Securities so produced or
represented by the voting certificate so produced or for which he
is a proxy or representative. Without prejudice to the obligations
of proxies, a person entitled to more than one vote need not use
them all or cast them all in the same way.
To be passed at the Meeting, an Extraordinary Resolution
requires a majority of at least 75 per cent. of the votes cast.
An Extraordinary Resolution shall be binding on all the ETP
Securityholders, whether or not present at the meeting and each of
them shall be bound to give effect to it accordingly. The passing
of an Extraordinary Resolution shall be conclusive evidence that
the circumstances justify its being passed. The Issuer shall give
notice of the passing of an Extraordinary Resolution to ETP
Securityholders within 14 calendar days but failure to do so shall
not invalidate such an Extraordinary Resolution.
Subject to the quorum for the Meeting being satisfied and the
Extraordinary Resolution being passed at the Meeting by a majority
of at least 75 per cent. of the votes cast and all relevant
documents being executed, the Proposal will become effective and
the ETP Securityholders will be notified thereof by the Issuer in
accordance with the Conditions.
This notice is given by:
Leverage Shares plc
___________________
Dated 2 June 2023
Contact details:
Apex IFS Limited
2(nd) Floor, Block 5
Irish Life Centre
Abbey Street Lower
Dublin 1
D01 P767
ANNEX 1
FORM OF EXTRAORDINARY RESOLUTION
"THAT this meeting of the holders of the LEVERAGE SHARES 3X
NETFLIX ETP of Leverage Shares plc currently outstanding (the "ETP
Securityholders", the "ETP Securities" and the "Issuer"
respectively) constituted by the master trust deed originally dated
5 December 2017 as most recently amended and restated on 16 August
2022 and as supplemented by a supplemental trust deed dated 3 June
2020 (the "Trust Deed") made between, among others, the Issuer and
Apex Corporate Trustees (UK) Limited (the "Trustee") as trustee for
the ETP Securityholders hereby resolves by way of Extraordinary
Resolution to:
1. assent to the Consolidation and to waive any breach or
default of the Conditions or any of the Programme Documents
occurring up to the date hereof which has arisen in relation or as
a consequence of the First Matter and/or the Second Matter
(collectively the "Proposed Amendments") and authorise and direct
the Trustee to concur and agree to the Proposed Amendments and
authorise and direct the Trustee and the Issuer, where applicable,
to execute the Consolidation Supplemental Trust Deed (the matters
referred to above, the "Proposal");
2. sanction every abrogation, modification, variation,
compromise or arrangement in respect of the rights of the ETP
Securityholders appertaining to the ETP Securities, whether or not
such rights arise under the Trust Deed, involved in or resulting
from or effected by the Proposal and its implementation;
3. authorise, direct, request and empower the Trustee and the
Issuer to concur in the Proposal and, in order to give effect
thereto and to implement the same, to execute the Consolidation
Supplemental Trust Deed and to execute and do, all such other
deeds, instruments, acts and things as may be necessary, expedient,
desirable or appropriate to carry out and give effect to this
Extraordinary Resolution and the implementation of the
Proposal;
4. discharge and exonerate the Trustee and the Issuer from all
and any liability for which they may have become or may become
responsible under the Trust Deed or the ETP Securities in respect
of any act or omission in connection with the Proposal, its
implementation or this Extraordinary Resolution and its
implementation;
5. irrevocably and unconditionally waive any claim that we may
have against the Trustee as a result of anything done or omitted to
be done by the Trustee in good faith in connection with this (i)
Extraordinary Resolution, (ii) the Consolidation, (iii) the
Consolidation Supplemental Trust Deed, (iv) the Proposed Amendments
and/ or (v) the Proposal;
6. indemnify the Trustee, on demand, against any cost, loss or
liability incurred in connection with (i) any act (or omission to
act) or step implementing this Extraordinary Resolution, (ii) the
Consolidation, (iii) the Consolidation Supplemental Trust Deed,
(iv) the Proposed Amendments and/ or (v) the Proposal; unless such
cost, loss or liability has been caused by the Trustee's fraud,
gross negligence or wilful default; and
7. acknowledge that capitalised terms used in this Extraordinary
Resolution have the same meanings as those defined in the Notice of
Meeting and/ or the Trust Deed (including the Conditions of the ETP
Securities), unless otherwise defined herein or unless the context
otherwise requires."
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END
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