Fair Oaks Income Fund Limited
29 July 2016
FAIR OAKS INCOME FUND LIMITED (the "Company")
(Incorporated in Guernsey under The Companies (Guernsey) Law, 2008, as amended, with registered number 58123 and
registered as a Registered Closed-Ended Collective Investment Scheme with the Guernsey Financial Services Commission)
NOTICE OF GENERAL MEETING
PROPOSAL TO ADOPT NEW ARTICLES TO VARY THE RIGHTS OF THE ORDINARY SHARES
1. Introduction
The Company announced on 4 July 2016 that, inter alia, to the extent that the Company were
to hold surplus realised capital following distributions from the Master Fund, it intended to return such capital to Shareholders
on a timely basis and in a cost and tax efficient manner. It was also announced that it was expected that the Board would be
required to convene a general meeting of the Company in order to seek Shareholder approval for the mechanism(s) to be adopted and
that the Board had instructed the Company's advisers to finalise proposals as soon as practicable. It was expected that the
Company would be in a position to commence capital returns before the end of the third quarter of 2016.
Having received professional advice, the Board believes that it would be in the best interests of the Company to
return cash to Shareholders by means of a series of compulsory redemptions of Ordinary Shares at Net Asset Value pro rata amongst
all Shareholders. It is therefore proposed that the rights of the existing Ordinary Shares be varied so as to make them
redeemable at the option of the Company. Accordingly, the Company will shortly be posting the Circular to convene the General
Meeting, at which it is proposed to adopt new articles of incorporation providing for these new rights to be attached to the
Ordinary Shares.
2. Details of the Proposal
Pursuant to the Existing Articles, the Board may, on such conditions and terms as they see fit,
convert all or any classes of the Company's shares into redeemable shares. The Company is therefore proposing, via the adoption
of the New Articles, to vary the existing rights of the Ordinary Shares so that the Ordinary Shares shall be redeemable under the
conditions as set out in Part 2 of the Circular.
Your attention is drawn to the new redemption terms relating to the Ordinary Shares, which will be
incorporated into the New Articles, which is set out in Part 2 of the Circular.
A copy of the New Articles (including a copy marked up to show the changes from the Existing
Articles) is available at the Company's website www.fairoaksincomefund.com.
It is intended that the Board will declare on an ad hoc basis such compulsory partial redemptions
of Ordinary Shares as it deems at its absolute discretion to be appropriate to return surplus capital to Shareholders on a timely
basis and in a cost efficient manner.
The amount to be applied to each redemption of Ordinary Shares will be calculated after the
deduction of associated costs of the redemption, which are not expected to be material. The redemption price per Ordinary Share
is expected to be equal to the Company's estimate of prevailing Net Asset Value per Ordinary Share.
Each redemption will be effected pro rata to holdings of Ordinary Shares on the Company's register
of members at the appropriate record date.
Fractions of shares produced by the applicable redemption ratio will not be redeemed and so the
number of Ordinary Shares to be redeemed from each Shareholder will be rounded down to the nearest whole number of Ordinary
Shares.
Payments of redemption proceeds are expected to be effected either through CREST (in the case of
Ordinary Shares held in uncertificated form) or by cheque (in the case of Ordinary Shares held in certificated form).
It is expected that immediately following each redemption, the then current ISIN number for the
Ordinary Shares will expire and a new ISIN number in respect of the remaining Ordinary Shares which have not been redeemed will
be enabled and available for transactions.
3. Taxation
General summaries of the UK and Guernsey tax consequences of the Proposal and (assuming the Proposal is approved)
of subsequent redemptions of Ordinary Shares are included in Part 3 of the Circular. These summaries do not constitute tax
advice and any Shareholder who is any doubt as to their tax position or as to the tax consequences of the Proposal for them
should consult their own professional adviser.
4. General Meeting (which also
constitutes a class meeting of Ordinary Shares)
In connection with the Proposal, a General Meeting of the Company has been convened for 10 a.m. on 25 August 2016
at which the Resolution will be put to Shareholders to adopt the New Articles in order to reflect the proposed changes under the
Proposal.
Notice of the General Meeting is set out at the end of the Circular, at which the Resolution will be proposed. The
full text of the Resolution is set out in the notice of General Meeting at the end of the Circular.
The adoption of the New Articles is conditional on the approval by Shareholders of the Resolution at the General
Meeting. The Resolution to be proposed will result in the varying of the rights of the Ordinary Shares. Under the Existing
Articles, the rights of a class of shares in the Company may only be varied with the sanction of a special resolution passed at a
separate meeting of the holders of such class of shares (or with the consent in writing from such holders of at least 75 per
cent. in value of the issued shares of that class). Currently, the Company only has one class of shares in issue, that being the
Ordinary Shares. Therefore, the General Meeting will also constitute a class meeting of the holders of Ordinary Shares at the
same time.
The Resolution will be proposed as a special resolution. A special resolution requires a majority of at least 75
per cent. of the votes cast by members entitled to vote and present in person or by proxy to be cast in favour in order for it to
be passed.
Normally, the quorum requirement for a General Meeting is two or more Shareholders present in person or by proxy.
However, since there is currently only one class of shares in issue (that being the Ordinary Shares) and that the General Meeting
will therefore also constitute a class meeting of the holders of Ordinary Shares at the same time, the quorum requirement for the
General Meeting will instead be two or more Shareholders representing
one-third of the capital paid on the issued Ordinary Shares present in person or by proxy, this being the
higher quorum requirement for a class meeting of holders of a separate class of shares.
All Shareholders are entitled to attend and vote at the General Meeting. In accordance with the Existing
Articles, all Shareholders entitled to vote and be present in person or by proxy at the General Meeting shall upon a show of
hands have one vote and upon a poll shall have one vote in respect of each Ordinary Share held.
5. Action to be taken
Shareholders will find attached to the Circular a Form of Proxy for use at the General Meeting.
Shareholders are asked to complete and return the Form of Proxy in accordance with the instructions printed thereon
to the Company's Registrar, Capita Asset Services, or deliver it by hand during office hours only to the same address so as to be
received as soon as possible and in any event by no later than 10 a.m. on 23 August 2016.
Shareholders are requested to complete and return a Form of Proxy whether or not they wish to attend the General
Meeting. The return of a Form of Proxy will not prevent Shareholders from attending the General Meeting and voting in person
should they so wish.
As an alternative to completing the Form of Proxy, CREST members can also appoint proxies by using the CREST
electronic proxy appointment service and transmitting a CREST message in accordance with the procedures set out in the CREST
Manual so that it is received by the Company's transfer agent (under CREST participant ID R033) by not later than 10 a.m. on 23
August 2016. The time of receipt will be taken to be the time from which the Company's transfer agent is able to retrieve the
message by enquiry to CREST in the manner prescribed by CREST.
Enquiries
Fair Oaks Income Fund Limited
Email: contact@fairoaksincomefund.com
Web: www.fairoaksincomefund.com
Fair Oaks Capital Limited
Hayley Stewart
DDI: +44 (0) 20 3034 0400
Email: hstewart@fairoakscap.com
Praxis Fund Services Limited
Ben Le Prevost
DDI: +44 (0) 1481 755524
Email: Ben.LePrevost@praxisifm.com
Numis Securities Limited
Nathan Brown, Corporate Broking
DDI: +44 (0) 20 7260 1426
Email: n.brown@numis.com
Notes
Fair Oaks Income Fund Limited is registered as a Registered Closed-Ended
Collective Investment Scheme with the Guernsey Financial Services Commission. The Company was admitted to
trading on the Specialist Fund Market of the London Stock Exchange (now the Specialist Fund Segment of the London Stock Exchange)
on 12 June 2014. The Company's ordinary shares have the TIDM: FAIR and ISIN: GG00BMBN1D14.
The investment policy of the Company is to seek exposure to US and European CLOs or other vehicles
and structures which provide exposure to portfolios consisting primarily of US and European floating-rate senior secured loans
and which may include non-recourse financing. The Company will implement its investment policy by investing in FOIF
LP.
Capitalised terms in this announcement are as defined in the Company's circular dated 5 August
2016.