VES Vestpa

RNS No 3263p
VOYAGEUR EUROPEAN SMALLER COMPANIES TRUST PLC
24th September 1997

      Voyageur European Smaller Companies Trust PLC
      ---------------------------------------------

The Directors of Voyageur European Smaller Companies
Trust PLC ("Voyageur" or "Company") and J O Hambro &
Partners ("J O Hambro") announce recommended proposals
for the reconstruction of the Company ("Proposals")and
the raising of new capital.  The Company will publish a
circular to shareholders and warrantholders as soon as
practicable.

The Proposals enable shareholders to choose between:-

-    transferring their investment in Voyageur into a new
     investment trust, Capital Opportunities Trust PLC
     ("Capital Opportunities"), without the
     crystallisation of any potential liability to UK
     taxation of capital gains; and

-    receiving cash.

Warrant holders will receive an amount in cash which
represents their entitlement on liquidation as described
below.

Capital Opportunities, which will be managed by J O
Hambro, will seek to raise an additional #25 million to
#50 million of new money by way of a C Share issue.

The Directors intend to vote in favour of the resolutions
to be proposed at the Shareholders' and Warrant holders'
Meetings in respect of their beneficial holdings
amounting in aggregate to 54,000 Shares and 10,400
Warrants representing 0.54 per cent. of the Shares and
Warrants of Vogageur respectively.

In addition, Shareholders and Warrant holders
representing 47.15 per cent. of the issued share capital
and 52.54 per cent. of the Warrants of Voyageur have
indicated an intention to vote in favour of the
Proposals.


Background to and Reasons for the Proposals
-------------------------------------------

The Company was launched in April 1994 and although the
investment performance has been satisfactory, it has not
been reflected in the price of the Company's Shares which
have traded at a discount to their underlying net asset
value.  Over the six months to 18 September 1997 the
average discount to net asset value was approximately
11.3 per cent.  Your Board believes that the principal
reasons for the discount on your Company's Shares are the
small size of the Company, its narrow shareholder base
and the consequent lack of liquidity in its shares, which
make it unrealistic to expect that the Shares will
maintain a satisfactorily narrow discount in the future.


The persistence of the discount has, in turn, made it
impractical to seek to raise new capital from investors
within the current structure and investment policy.


DETAILS OF THE PROPOSALS
------------------------

Under the Proposals, which involve a Scheme under Section
110 of the Insolvency Act 1986, Voyageur will be put into
members' voluntary liquidation, and Shareholders can
elect for:

a)   Shares in Capital Opportunities; or
 
b)   cash, via RealisationCo Shares.

Capital Opportunities Shares will have an initial net
asset value equivalent to at least 100 per cent. of the
formula asset value per Voyageur Share ("FAV").

RealisationCo Shares will have an initial net asset value
equivalent to 99 per cent. of FAV.

The holders of RealisationCo Shares will be entitled to
RealisationCo's net assets on winding-up.  The
investments of RealisationCo will be sold as soon as is
practicable having regard to the maximisation of value,
and the proceeds distributed.

RealisationCo has been formed to enable those
Shareholders who so choose, to receive cash payments
following the winding-up of Voyageur, without prejudicing
the treatment of the Proposals as a reorganisation for
tax purposes.

Shareholders who make no election will receive Capital
Opportunities Shares.

Warrant holders will receive a cash payment representing
their entitlement on winding up, adjusted to take account
of movements in Voyageur's asset value subsequent to this
announcement.  Based on estimated diluted net asset value
per Share of 131.4p as at 22 September 1997 and the
Directors' estimate of the costs of the Proposals
attributable to Voyageur (explained under "Estimated
costs of the Proposals" below), this payment would amount
to 38.1p per Warrant.  The exact amount payable to
Warrant holders will depend on asset value at
liquidation.


Information on Capital Opportunities Trust PLC
----------------------------------------------

Under the Proposals, Shareholders who elect to roll over
their investment in Voyageur will do so into a new
investment trust to be called Capital Opportunities Trust
PLC.  It will have an initial life of 7 years, with a
continuation vote at the Annual General Meeting in 2004.

Capital Opportunities will seek exceptional returns from
a highly flexible, UK orientated investment policy.  It
will be benchmarked against the FTSE-A All Share Index.

It is anticipated that the portfolio will include a broad
range of quoted companies by market capitalisation.  The
proportion of the portfolio invested in larger companies
is likely to be significantly less than that implied by
the FTSE-A All Share Index under normal circumstances and
the focus within smaller companies will be on companies
with a capacity to evolve into medium and larger sized
companies.

A small proportion of the portfolio may also be invested
in unquoted securities.  Such investments are likely to
involve companies where the management is already known
to J O Hambro and the opportunity to invest is one sought
by J O Hambro rather than offered by financial
intermediaries.

Capital Opportunities will be able to invest up to 50 per
cent. of its net assets overseas, although such a high
proportion would be exceptional and only likely to arise
if J O Hambro believes the UK market to be significantly
overvalued relative to overseas markets.  A UK investment
perspective regularly identifies opportunities in other
markets through comparable or related companies and in
some sectors which are highly international, the best
opportunity in that sector may arise overseas.

With the objective of enhancing returns to Shareholders,
the directors of Capital Opportunities will be prepared
to borrow up to a limit of 30 per cent of the net assets
of the Company at the time of borrowing.  Borrowings are
likely to be short-term and the level of gearing is
likely to vary considerably over time.  If J O Hambro
believes that equity markets no longer appear attractive,
gearing may be reduced to zero or the portfolio may hold
net cash for a time.

As soon as practicable following launch, Capital
Opportunities will take steps to enable the Board at its
discretion to make purchases of Capital Opportunities'
own shares should the share price fall to a significant
discount to net asset value.

The managers intend that Capital Opportunities will
remain fully eligible for PEPs.


Information on J O Hambro & Partners Limited
--------------------------------------------

J O Hambro was formed in 1986 by members of the Hambro
family to advise institutional investors and is part-
owned by Equitable Life.  It currently has funds under
management or advice of #350 million, including the North
Atlantic Smaller Companies Trust and Oryx International
Growth Fund.

The investment management of Capital Opportunities'
portfolio will be handled by Malcolm King and Caroline
Harris, both formerly of Finsbury Asset Management where
their responsibilities included investment management of
Finsbury Growth Trust, Finsbury Smaller Companies Trust
and the "Market Investments" portfolio of Finsbury Trust.

The investment policy and strategy of Capital
Opportunities will be similar to that of the "Market
Investments" portfolio of Finsbury Trust, which comprised
investments of #36.4 m at 31 March 1997, 54 per cent. of
the total portfolio.  Its net asset value per share
increased by 209 per cent. in the five years to 31 March
1997, compared with an increase of 79.2 per cent. in the
FTSE-A All Share Index in that period.  As a result
Finsbury Trust won awards in the 1996 Micropal Awards UK
General Sector for overall performance over 5 years
(first) and over one year (second).

Over the same period, the net asset value of Finsbury
Growth Trust (also benchmarked against the FTSE-A All
Share Index) investing in UK larger and medium sized
companies, increased by 102.6 per cent. and that of
Finsbury Smaller Companies Trust increased by 119.3 per
cent. compared to an increase in the FTSE-A Smallcaps
(excluding investment trusts) Index of 73.1 per cent.

J O Hambro's management contract will have an initial
term of one year, terminable at any time thereafter on
12 months notice.  The annual management fee will be
0.75 per cent. of net assets, with no fee being charged
on the  gearing of the trust.

In order to align the interests of the managers with
those of Shareholders, the managers will also receive
options to subscribe 5 per cent. of share capital,
subject to diluted capital returns (after providing for
exercise of the options in full) exceeding by over 1 per
cent. per annum the capital returns of the FTSE-A All
Share Index.  These options will normally be exercisable
after the fifth anniversary of launch.


Placing of C Shares in Capital Opportunities
--------------------------------------------

In addition to the Capital Opportunities Shares to be
issued to Voyageur Shareholders who so elect, it is
proposed that Capital Opportunities C Shares will be made
available to institutional investors by way of a placing
which will be conditional on the implementation of the
Proposals.  The C Shares will convert into Capital
Opportunities Shares once the investments attributed to
the Share and C Share portfolios are broadly similar.

No warrants are being issued by Capital Opportunities
Trust.

Equitable Life has agreed to subscribe in the C Share
issue such amount as will increase its total investment
in Capital Opportunities to #25 million.

Board of Capital Opportunities
------------------------------

Robin Stormonth-Darling, the Chairman of Voyageur will
become Chairman of Capital Opportunities and will be
joined on the Board by David Woods, also one of
Voyageur's existing Directors, and Neil Dunn, who is
currently Voyageur's investment manager.  James Hambro
will also join the Board, and one further independent
Director will be appointed in due course.


Benefits of the Proposals
-------------------------

The proposals enable Shareholders to transfer their
investment into a new trust whose management has a record
of strong investment performance and of maintaining
investment trusts on low discounts to net asset value.
The increased size of Capital Opportunities compared to
Voyageur should improve marketability, and J O Hambro
intends to enhance investor appeal through the promotion
of PEPs, a savings scheme and communication with the
broad retail and institutional market.

J O Hambro believes that the UK market is in long term up-
trend in both absolute and real terms and this is likely
to last for the foreseeable future, notwithstanding the
occasional setbacks which are likely to provide long term
buying opportunities.

For Shareholders who wish to realise their investment,
the proposals provide cash equivalent to their
entitlement on a full liquidation of the Company.


Estimated Costs of the Proposals
--------------------------------

The expenses of the Proposals attributable to Voyageur
Shareholders are estimated by the Directors at
approximately #424,000,including the cost of termination
of the management contract, which is expected to amount
to approximately #289,000.  A contribution equivalent to
the cost of terminating Voyageur Asset Managers'
management contract will be made by J O Hambro.

In addition, the cost of the distribution to Warrant
holders is estimated at approximately #767,000, based on
the estimated asset value as at 22 September 1997.

The expenses (exclusive of sales commissions on the C
Shares) to be borne by Capital Opportunities are
estimated at approximately #457,000.  These expenses will
be borne by the Capital Opportunities C Shares to be
issued under the Proposals.

Financial Effects of the Proposal
---------------------------------

As at 22 September 1997, Voyageur's estimated diluted net
asset value per Share was 131.4p.

Based on this and on an entitlement of Warrant holders to
38.1p per Warrant, FAV is estimated at 128.7p per Share
and:

-Shareholders electing for the cash alternative would
receive RealisationCo Shares with an initial net asset
value of 127.5p each.

-Shareholders electing for Shares in the new trust would
receive initial net asset value in new Capital
Opportunities Shares of at least 128.7p per Share,
depending on the proportion of Shareholders who elect for
cash.  Assuming 65 per cent. of Shareholders elect for
Shares in Capital Opportunities, they would receive
100.54 per cent. of FAV, equivalent to 129.4p per Share.

Capital Opportunities C Shares, to be issued at 100p,
would have an initial net asset value of approximately
98.4p each, based on a placing of 35 million C Shares.


Expected Timetable
------------------

A circular to shareholders with details of the Proposal
together with a prospectus for Capital Opportunities will
be available in the next few weeks.  The circular to
Shareholders will convene two Extraordinary General
Meetings for shareholders to be held consecutively some
three and four weeks respectively after the posting of
the document and will also convene a General Meeting of
Warrant holders to be held immediately after the first
Extraordinary General Meeting.

Shareholders will also be sent election forms to enable
them to choose between the two options in advance of the
Extraordinary General Meetings.

SBC Warburg Dillon Read will be seeking to place new C
Shares in Capital Opportunities in the period up to the
Extraordinary General Meetings.

The Proposals are conditional on the necessary
resolutions being passed at the Shareholders' and Warrant
holders' meetings and on the London Stock Exchange
admitting the Capital Opportunities Shares and C Shares
to the Official List.




Enquiries
---------


Rutherford Manson Dowds
Gordon Neilly                 Tel: 0131 225 4727

J O Hambro & Partners Limited
Malcolm King                  Tel: 0171 222 2020

SBC Warburg Dillon Read
Howard Myles                  Tel: 0171 568 2140





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