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14 Jan, 2008

Published: 11:19 Monday 14 January 2008
By: Matthew Goodburn, Investment Correspondent

The board of JP Morgan Income & Capital Investment Trust is offering investors a rollover into a new split capital trust or a cash exit from the £185 million trust.

The existing trust faces a voluntary liquidation on 29 February and the proposed rollover vehicle will offer investors a move of all or part of their ordinary or zero dividend preference (ZDP) shares into the new trust.

Investors in the proposed new trust, JP Morgan Income and Capital Trust, (JPMICT )would be offered JPMICT ordinary shares or a combination of ordinary and ZDP shares.

They will also have the option of JPMICT units, which will comprise two ordinary shares and one ZDP share in the new vehicle, as well as cash for all or part of their stake in the existing trust.

The proposals would see Jamie Streeter, who has managed the trust since 2002, continue to manage the vehicle and give it a 10 year planned life.

If successful, it would be the second rollover of the trust, with the ordinary shares posting a return of 106% since the relaunch on 2002.

The new trust would have the authority to control the discount by buying back up to 14.99 per cent of both the JPMICT Ordinary Shares and ZDP Shares.

It would have an initial capital structure of 60% ordinary shares and 40% ZDP shares and would continue to hold around 60 primarily UK equity stocks.

JP Morgan head of investment trusts David Barron said the message to shareholders from the proposals was one of continuity.

He said : 'This is about a long term investment offering which gives income shareholders a 10 year view on the markets.

'The zero preference shares would be the longest dated zeros in the investment trust market. They will have no fixed debt and offer a preferred return of 6.75%.'

Barron said discussions with the trust's investors about the rollover proposals had been encouraging.

He said: ' 'We have had discussions with many of our major shareholders and they have been positive.'

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