RNS Number:6147R
Monthly High Income Trust PLC
03 November 2003

3 November 2003

                 THE MONTHLY HIGH INCOME TRUST PLC ("MHIT")
                  MHIT SECURITIES PLC ("MHIT Securities")

 Recommended proposals for the planned voluntary winding up of The Monthly High
                  Income Trust PLC and MHIT Securities PLC


Introduction

Shares were issued in MHIT and MHIT Securities in December 1998 and it was
intended that the Companies would have a planned life of approximately 5 years.
The Board has today sent out a circular to Shareholders recommending proposals
for the winding-up of MHIT and MHIT Securities on 3 December 2003.



Background to the Proposals

Under the Articles of each of MHIT and MHIT Securities, the Directors are
obliged to convene an extraordinary general meeting on 3 December 2003 at which
a resolution must be proposed to place the relevant Company into voluntary
liquidation, unless the Directors have been released from their obligation to do
so by a special resolution of such Company.



The Articles of each Company provide that the liquidation resolution (which will
be a special resolution) will be passed if at least one Shareholder votes in
favour of the Resolution by providing that those who vote in favour of the
Resolution will collectively be deemed to have such number of votes as is one
more than the number of votes necessary to carry the resolution.



The Directors believe that there is no acceptable on going investment option
available to MHIT or MHIT Securities at this time and that, accordingly, a
voluntary winding up of MHIT and MHIT Securities is in the best interests of
each Company and Shareholders as a whole. Accordingly, the Board unanimously
recommends Shareholders to vote in favour of the proposals at the relevant
Meetings.





Voluntary Winding Up

The liquidation of each of MHIT and MHIT Securities will involve the passing of
a special resolution to approve the liquidation of the Company and to appoint
the Liquidators. In the case of MHIT Securities this Resolution will be proposed
at the EGM on 3 December 2003 at 12.30pm and in the case of MHIT this Resolution
will be proposed at the EGM on 3 December 2003 at 12.45pm. The appointment of
the Liquidators will become effective immediately if the Resolution to be
proposed at the relevant Meeting is passed. At this point, the powers of the
Directors would cease and the Liquidators would assume responsibility for the
liquidation of each of MHIT and MHIT Securities, including the payment of fees,
costs and expenses, the discharging of the liabilities of MHIT and MHIT
Securities and the distribution of the surplus assets to Shareholders.



The Manager has been instructed to organise the portfolio in anticipation of a
liquidation of the Companies.



The Directors propose that Richard Setchim and Ian Oakley Smith both of
PricewaterhouseCoopers LLP, Plumtree Court, London EC4A 4HT, be appointed as
Liquidators. They have agreed to accept their appointment provided that the
relevant Resolutions appointing them are passed.





Estimated Entitlements



Zero Dividend Preference Shareholders

On a winding up of MHIT Securities and after payment of all creditors, the
Articles provide that Zero Dividend Preference Shareholders are entitled to
receive 75.0376 pence per Zero Dividend Preference Share on 3 December 2003. It
is highly unlikely that there will be sufficient assets to satisfy the Zero
Dividend Preference Shareholders entitlement in full. On the basis of the
unaudited value of the Companies' portfolio as at 29 October 2003, it is
estimated that the Zero Dividend Preference Shareholders will receive 68.5 pence
per Zero Dividend Preference Share. It should be noted that this figure is given
for illustrative purposes only and should not be regarded as a forecast.



Geared Ordinary Shareholders

On a winding up of MHIT and after payment of all creditors and after operation
of the mechanism to ensure that the Companies' surplus assets are applied first
to satisfy the entitlements of the Zero Dividend Preference Shareholders, Geared
Ordinary Shareholders will receive any surplus assets of MHIT available for
distribution. On the basis of the unaudited value of the Companies' portfolio as
at 29 October 2003, it is estimated that the Geared Ordinary Shareholders will
receive nil pence per Geared Ordinary Share. It should be noted that this figure
is given for illustrative purposes only and should not be regarded as a
forecast. However, it is highly unlikely that the value of the Companies'
investments will rise in value by enough to result in there being any surplus
available for the Geared Ordinary Shareholders.





Dividends

Dividends totalling 19.1395 pence per Geared Ordinary Share have been paid to
the Geared Ordinary Shareholders during the life of MHIT. There are three
remaining monthly dividends to be paid to Geared Ordinary Shareholders.
September's dividend was announced on 23 October 2003 and the dividends for
October and November will both be announced on 13 November 2003. All three
dividends will be paid on 28 November 2003 and will be 0.2p per Geared Ordinary
Share.





Dealings and Settlement

It is expected that the register of Shareholders will close for transfers of
Shares at the close of business on 21 November 2003. Transfers lodged with the
Registrar before this time, accompanied by documents of title, will be
registered in the normal way. Transfers received after that time will be
returned to the person lodging them and, if the Proposals are sanctioned by
Shareholders, the original holder will receive any proceeds from distributions
made by the Liquidators unless otherwise agreed by the Liquidators at their
absolute discretion. The last date for dealings on the London Stock Exchange
will be 2 December 2003, although investors should note that, if the proposals
are sanctioned by Shareholders, proceeds from distributions made by the
Liquidators will only be made to investors on the register at the close of
business on 21 November 2003.



The Directors have made an application to the UK Listing Authority for the
listing of Shares to be suspended with effect from 7.30a.m.on 3 December 2003.
The listing will, if the Proposals are approved, be cancelled no later than
twelve months thereafter.





Return of Assets

The Liquidators will begin the process of settling MHIT's and MHIT Securities'
liabilities and returning assets to Shareholders as soon as practicable after
the special resolutions to wind up each Company have been passed at the Second
EGM and the MHIT EGM. The return of assets to Shareholders will be made in
accordance with the Articles, as detailed under "Estimated Entitlements" above.



The Liquidators will not be able to distribute all the assets of each Company
immediately, as funds will have to be retained in a liquidation fund to meet
each Company's existing and potential liabilities and all the costs of
liquidation. The liquidation fund will be held in MHIT, which will provide an
indemnity to MHIT Securities in respect of its liabilities to the extent they
can be met out of the liquidation fund. It is expected that the first
distribution of assets which is anticipated to amount to approximately 98 per
cent. of the net assets of the Companies, will be made during the week
commencing 8 December 2003. To the extent that any part of the retained
liquidation fund is not required to meet MHIT's and MHIT Securities'
liabilities, any balance remaining in the hands of the Liquidators will be paid
as one or more liquidation distributions to Zero Dividend Preference
Shareholders on the register on the date of its closing, which is expected to be
21 November 2003, up to the value of their entitlements in accordance with the
Articles. The final distribution, if any, will be made once all of MHIT's and
MHIT Securities' affairs, including in particular their tax affairs, have been
settled, and all of their liabilities paid.



All distribution payments will be sent by post to Shareholders who are on the
register of members on the date of its closing, which is expected to be 21
November 2003.





Expected Timetable

MHIT Securities First EGM 10.30am on 27 November 2003. Only unquoted Ordinary
Shareholders are entitled to vote at this meeting. (There are currently 2
unquoted Ordinary Shares, which are held by two of the Directors, Nigel
Sidebottom and David Keen).



MHIT Securities Second EGM 12.30pm on 3 December 2003. Both unquoted Ordinary
Shareholders and Zero Dividend Preference Shareholders are entitled to vote at
this meeting.



MHIT EGM 12.45pm on 3 December 2003. Only Geared Ordinary Shareholders are
entitled to vote at this meeting.



Accordingly, Zero Dividend Preference Shareholders should only attend the EGM on
3 December 2003 at 12.30pm and Geared Ordinary Shareholders should only attend
the EGM on 3 December 2003 at 12.45pm.

For further information:
Neil Smith        020 7809 6151
Morley Fund Management


Nicholas Rucker 020 7568 8574
UBS Warburg


                      This information is provided by RNS
            The company news service from the London Stock Exchange
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