Introduction of a New Holding Company

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM AUSTRALIA, CANADA, JAPAN, SOUTH AFRICA OR ANY JURISDICTION WHERE TO DO SO MIGHT CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS OF SUCH JURISDICTION

THIS ANNOUNCEMENT IS AN ADVERTISEMENT AND NOT A PROSPECTUS AND INVESTORS SHOULD NOT SUBSCRIBE FOR OR PURCHASE ANY SECURITIES REFERRED TO IN THIS ANNOUNCEMENT EXCEPT ON THE BASIS OF INFORMATION TO BE CONTAINED AND/OR INCORPORATED BY REFERENCE IN THE PROSPECTUS EXPECTED TO BE PUBLISHED BY PHOENIX GROUP HOLDINGS IN CONNECTION WITH THE PROPOSED SCHEME REFERRED TO BELOW. THE PROSPECTUS WILL BE MADE AVAILABLE ON PHOENIX GROUP HOLDING'S WEBSITE AT WWW.THE PHOENIXGROUP.COM/INVESTOR-RELATIONS/AGM-AND-EGM/ AND WILL BE AVAILABLE FOR INSPECTION AT THE UK LISTING AUTHORITY'S DOCUMENT VIEWING FACILITY.

For immediate release

2 November 2018

Phoenix Group Holdings

(the "Company" or "Old Phoenix")

Introduction of a new holding company

The Board of the Company today announces a proposed scheme of arrangement  pursuant to section 86 of the Cayman Islands Companies Law (2018 Revision) (the "Companies Law")  (the "Scheme") relating to the corporate restructuring of Old Phoenix and including a related reduction of capital under sections 14 and 16 of the Companies Law (the "Old Phoenix Reduction of Capital"). A circular setting out full details of the Scheme (including notices of the Court Meeting and Scheme General Meeting, each as defined below) (the "Scheme Circular") will be sent to Old Phoenix Shareholders and Old Phoenix DI Holders later today.

If the Scheme is implemented and the Old Phoenix Reduction of Capital is approved, Phoenix Group Holdings plc ("New Phoenix"), a new company incorporated in England & Wales, will become the holding company of Old Phoenix and its consolidated subsidiaries (the "Group"). If approved, the Scheme and the Old Phoenix Reduction of Capital are expected to become effective on or around 12 December 2018 (the "Scheme Effective Date").

Applications will be made to the UK Listing Authority (the "UKLA") for the ordinary shares of New Phoenix (the "New Phoenix Shares") to be admitted to the premium listing segment of the Official List of the Financial Conduct Authority (the "FCA") and to trading on the main market for listed securities of the London Stock Exchange (the "LSE") ("Admission"). Upon Admission, New Phoenix is expected to be included in FTSE's UK Index Series.  A prospectus in relation to New Phoenix and Admission of the New Phoenix Shares (the "Prospectus") is expected to be formally approved by the UKLA today. If approved, it will be published and sent, later today, to shareholders of Old Phoenix (the "Old Phoenix Shareholders") and the holders (the "Old Phoenix DI Holders") of all dematerialised depositary interests in respect of ordinary shares of Old Phoenix ("Old Phoenix Depositary Interests").

It is intended that New Phoenix will be substituted for Old Phoenix as principal debtor under Old Phoenix's outstanding subordinated debt securities with effect from the Scheme Effective Date.  New Phoenix will accede to, and become a borrower and a guarantor under, Old Phoenix's bank facilities. The Group continues to consider substituting New Phoenix as the principal debtor under Old Phoenix's outstanding senior debt securities.

 The Scheme Circular and the Prospectus are expected to be made available on Old Phoenix's website at http://www.thephoenixgroup.com/investor-relations/agm-and-egm/ later today and will also be submitted to the National Storage Mechanism, where they will be available for inspection at http://www.morningstar.co.uk/uk/NSM.

All of the directors of Old Phoenix have been appointed to the board of New Phoenix. The corporate governance and investor protection measures which currently apply to Old Phoenix will apply to New Phoenix in all material respects. In particular, New Phoenix will be subject to the City Code on Takeovers and Mergers (the "Takeover Code"), the Listing Rules and the Disclosure Guidance and Transparency Rules.  New Phoenix intends to comply with the UK Corporate Governance Code and institutional shareholder guidelines to the same extent that Old Phoenix does currently.

Terms of the Scheme

If the Scheme becomes effective, it will result in the Old Phoenix Shareholders holding New Phoenix Shares in the same proportions in which they hold ordinary shares (or depositary interests representing ordinary shares) in Old Phoenix ("Old Phoenix Shares") shortly before the Scheme becomes effective. Under the Scheme, holders of Old Phoenix Shares will, at or around 8.00 p.m. on 12 December 2018 (the "Scheme Record Time") receive one New Phoenix Share for every one Old Phoenix Share

If the Scheme becomes effective, all Old Phoenix Depositary Interests will be cancelled shortly before the Scheme Record Time, and each Old Phoenix DI Holder will be recorded on the Company's register of members as holding the same number of Old Phoenix Shares as they held Old Phoenix Depositary Interests immediately before those Old Phoenix Depositary Interests were cancelled. All holders of Old Phoenix Depositary Interests shortly prior to the Scheme Record Time will therefore participate in the Scheme as a shareholder of Old Phoenix.

Accordingly, immediately upon the Scheme becoming effective, the New Phoenix Shareholders will have the same proportionate interest in the profits, net assets and dividends of the Group as they had as Old Phoenix Shareholders (including those who were previously Old Phoenix DI Holders) immediately prior to the Scheme becoming effective. The rights attaching to the New Phoenix Shares will be substantially the same as those attaching to the Old Phoenix Shares.

Share capital of Old Phoenix following the Scheme becoming effective

Pursuant to the Scheme and the Old Phoenix Reduction of Capital, all of the existing Old Phoenix Shares (including those which replaced Old Phoenix Depositary Interests upon their cancellation as described above) will be cancelled by way of a reduction of capital of Old Phoenix's share capital (the "Old Phoenix Reduction of Capital").

The reserve arising from the Old Phoenix Reduction of Capital will be used to "pay up" the same number of new ordinary shares in Old Phoenix to be issued to New Phoenix, to ensure that New Phoenix is the sole shareholder of the ordinary shares in Old Phoenix immediately following the Scheme Effective Date without New Phoenix needing to pay or transfer any further value to Old Phoenix in return.

Background to and reasons for the Scheme

The current Group holding company structure was formed at the time of the Group's restructuring in 2009. Under the current structure, Old Phoenix is a Cayman Islands-incorporated company which, with effect from 31 January 2018, is tax resident in the United Kingdom (having previously been tax resident in Jersey). This structure is complex for the Group's shareholders, debt investors and regulators and imposes additional burdens on the Group's internal governance processes. On 25 August 2016 Old Phoenix announced that, as part of an ongoing group simplification process, it intended to put in place a new UK-registered holding company for the Group. This Scheme is now the final step in the Group's onshoring journey which has delivered a streamlined and cost-efficient internal governance structure and will result in a clearer structure for the Group's shareholders, debt investors and regulators.

New Phoenix will have substantially the same business and operations immediately after the Scheme Effective Date as Old Phoenix has immediately before the Scheme Effective Date. The implementation of the Scheme will not result in any changes in the day-to-day operations of the business of the Group or its strategy and is not expected to have any adverse impact on Old Phoenix Shareholders or Old Phoenix DI Holders as a whole.

 Conditions to implement the Scheme

The implementation of the Scheme is conditional upon, amongst other things:

1.    the Scheme being approved by a majority in number, representing 75 per cent. in value or more, of the holders of Old Phoenix Shares who are on the register of members at the voting record time (as set out in the expected timetable below) and who are present and voting, in person or by proxy (including as instructed, or represented, by Old Phoenix DI Holders), at a general meeting convened at the direction of the Grand Court of the Cayman Islands (the "Cayman Court") (the "Court Meeting");

2.    the passing of certain resolutions relating to the Scheme (and various matters in connection with the Scheme) by the Old Phoenix Shareholders at a general meeting of Old Phoenix (the "Scheme General Meeting");

3.    certain regulatory approvals being granted by the PRA, the FCA and the Central Bank of Ireland;

4.    the Scheme being sanctioned and the Old Phoenix Reduction of Capital being confirmed by the Cayman Court;

5.    the court order sanctioning the Scheme and confirming the Old Phoenix Reduction of Capital being delivered to, and registered by (as applicable), the Cayman Islands Registrar of Companies; and

6.    permission having been granted by the UKLA to admit the New Phoenix Shares to the premium segment of the Official List and by the LSE to admit the New Phoenix Shares to trading on the LSE's main market for listed securities.

The Board of Old Phoenix will not take the necessary steps to implement the Scheme unless the above conditions have been satisfied or waived (to the extent permitted by law) and, at the relevant time, the Board of Old Phoenix considers that it continues to be in Old Phoenix's and the Old Phoenix Shareholders' best interests that the Scheme should be implemented.

Expected timetable of principal events

ENQUIRIES

Phoenix Group Investor Relations
Claire Hawkins, Head of Investor Relations
+44 (0) 20 3735 0575 

Phoenix Group Debt Investors
Rashmin Shah, Group Treasurer
+44 (0) 20 3735 0059 

Phoenix Group Media Relations

Shellie Wells, Head of Corporate Communications

+44 (0) 203 735 0922

HSBC (Sponsor & Corporate Broker)
Simon Alexander, Andrew Hackney
+44 (0) 20 7991 8888
 

Maitland (PR Adviser)
Andy Donald, Vikki Kosmalska

+ 44 (0) 20 7379 5151
 

This announcement has been issued by and is the sole responsibility of the Company.

THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN INVITATION OR OFFER TO SELL OR THE SOLICITATION OF AN INVITATION OR OFFER TO BUY ANY SECURITY. NONE OF THE SECURITIES REFERRED TO IN THIS ANNOUNCEMENT SHALL BE SOLD, ISSUED, EXCHANGED OR TRANSFERRED IN ANY JURISDICTION IN CONTRAVENTION OF APPLICABLE LAWS.

The distribution of this announcement into jurisdictions other than the United Kingdom may be restricted by law, and, therefore, persons into whose possession this announcement comes should inform themselves about and observe any such restrictions. Any failure to comply with any such restrictions may constitute a violation of the securities laws of such jurisdiction.

HSBC Bank plc ("HSBC"), which is authorised by the Prudential Regulatory Authority ("PRA") and regulated in the United Kingdom by the PRA and the Financial Conduct Authority ("FCA"), is acting exclusively for the Company and New Phoenix and for no one else in connection with Admission and the arrangements referred to in this announcement and will not regard any other person as a client in relation to Admission or the arrangements described in this announcement and will not be responsible to anyone other than the Company and New Phoenix for providing the protections afforded to its clients or for providing advice in relation to Admission or the arrangements referred to in this announcement.

No person has been authorised to give any information or to make any representations other than those contained in this announcement and, when published, the Scheme Circular and the Prospectus, and, if given or made, such information or representations must not be relied on as having been authorised by the Company, New Phoenix or HSBC.

NOTICE TO INVESTORS IN THE UNITED STATES OF AMERICA

This announcement does not constitute an offer to any person or to the public generally to subscribe for or otherwise acquire New Phoenix Shares. This announcement is not an offer of securities for sale in the United States. The New Phoenix Shares have not been and will not be registered under the US Securities Act of 1933, as amended (the "US Securities Act") or under any securities laws of any state or other jurisdiction of the United States and may not be offered, sold, taken up, exercised, resold, renounced, transferred or delivered, directly or indirectly, within the United States except pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States. In addition, the Company has not been and will not be registered under the US Investment Company Act of 1940, as amended. There will be no public offer of the New Phoenix Shares in the United States. New Phoenix Shares may not therefore be offered to certain US shareholders of Old Phoenix unless New Phoenix believes that there is an exemption from, or if the transaction is not subject to, the registration requirements of the US Securities Act. The New Phoenix Shares issued pursuant to the Scheme are expected to be issued in reliance upon the exemption from the registration requirements of the US Securities Act provided by section 3(a)(10) thereof based on the Cayman Court's sanctioning of the Scheme. Old Phoenix Shareholders who will be affiliates of New Phoenix after the Scheme Effective Date will be subject to certain US transfer restrictions relating to the New Phoenix Shares received pursuant to the Scheme.

The New Phoenix Shares have not been and will not be registered on a United States securities exchange or quoted on any inter-dealer quotation system in the United States. The Scheme has not been and will not be approved or disapproved by the US Securities and Exchange Commission (the "SEC"), nor has the SEC or any US state securities commission passed upon the merits or fairness of the Scheme nor upon the adequacy or accuracy of the information contained in the Scheme Circular or the Prospectus. Any representation to the contrary is a criminal offence in the United States.

The New Phoenix Shares will not be registered under the securities laws of any state of the United States, and will be issued in the United States pursuant to the Scheme in reliance on available exemptions from such state law registration requirements.

FORWARD-LOOKING STATEMENTS

This announcement includes statements that are, or may be deemed to be, "forward-looking statements". These forward-looking statements may be identified by the use of forward-looking terminology, including the terms "believes", "estimates", "plans", "projects", "anticipates", "expects", "intends", "may", "will" or "should" or, in each case, their negative or other variations or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward-looking statements include all matters that are not historical facts. They include, but are not limited to, statements regarding the Group's intentions, beliefs or current expectations concerning, among other things, the Group's business, results of operations, financial position, prospects, dividends, growth, strategies and the asset management business.

By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. Forward-looking statements are not guarantees of future performance and the actual results of the Group's operations, its financial position and dividends, and the development of the markets and the industries in which the Group operates may differ materially from those described in, or suggested by, the forward-looking statements contained in this announcement. In addition, even if the Group's results of operations and financial position, and the development of the markets and the industries in which the Group operates, are consistent with the forward-looking statements contained in this announcement, those results or developments may not be indicative of results or developments in subsequent periods. A number of risks, uncertainties and other factors could cause results and developments to differ materially from those expressed or implied by the forward-looking statements.