Nippon Active Value Fund

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, THE REPUBLIC OF SOUTH AFRICA, JAPAN, ANY MEMBER STATE OF THE EUROPEAN ECONOMIC AREA OR ANY JURISDICTION IN WHICH IT WOULD BE UNLAWFUL TO DO SO

This announcement contains inside information.

LEI: 213800JOFEGZJYS21P75

Nippon Active Value Fund plc

Proposed Fundraise

Nippon Active Value Fund plc (the "Company") announces that it is proposing to raise further capital to pursue its proven model of activist investment in quoted Japanese companies.  Accordingly, the Board plans to implement a share issuance programme to raise capital for further investment through the issue of up to 300 million Ordinary Shares or C Shares (together, the "Shares") over the next 12 months following the publication of the necessary prospectus (the "Share Issuance Programme").  The Share Issuance Programme will include an initial issue which is expected to comprise an initial placing, offer for subscription and intermediaries offer (the "Initial Issue").

The implementation of the Share Issuance Programme requires the publication of a Prospectus and Circular both of which the Company expects to publish in the near term. Any decision to proceed with the publication of the Prospectus and Circular, or to proceed with either an issue of Ordinary Shares or C Shares, is at the absolute discretion of the Directors and will be subject to prevailing market conditions and investor sentiment.

Should the Company decide to proceed with such publication, a further announcement will be made in due course. A further announcement will also be made on reaching a decision to issue either Ordinary Shares or C Shares under the Initial Issue.

Introduction

The Company was launched in February 2020 with the IPO raising £103 million, which has subsequently been invested. The performance of the Company since IPO has demonstrated proof of the original concept. The Share Issuance Programme is designed to grow the size of individual holdings and should further enhance the effectiveness of the Company's investment strategy. Currently, no constraints on the ability of putting much larger amounts of capital to work are envisaged.

The proceeds of the Share Issuance Programme will be used for investment in accordance with the Company's investment policy and to fund the Company's operational expenses. The intention is to invest the proceeds of the Share Issuance Programme substantially within the universe of investment targets identified by the Investment Adviser. This will facilitate larger holdings and accelerate the process of engaging with management. It is probable that some further names, within the universe of suitable companies already identified, will be added over time.

The Share Issuance Programme

The Initial Issue

The Company is proposing to issue up to 150 million new Ordinary Shares or C Shares pursuant to the Initial Issue which is expected to comprise an Initial Placing, Offer for Subscription and Intermediaries Offer. In the event that the Directors decide to proceed with an issue of Ordinary Shares, the issue price for the new Ordinary Shares will be determined by the Company and will be not less than the prevailing Net Asset Value per Ordinary Share at the time of announcement of the issue price plus a premium intended, together with premia over the course of the Placing Programme, to cover the fixed costs of the Initial Issue. In the event that the Directors decide to proceed with an issue of C Shares, the issue price for the C Shares will be £1.00.

The actual number of Ordinary Shares or C Shares to be issued pursuant to the Initial Issue will be notified by the Company via a Regulatory Information Service prior to Initial Admission.

Shareholder approval for the Initial Issue will be sought at a General Meeting of the Company. The Company expects to publish a Circular convening the General Meeting in the near term.

Subsequent Issues

Following the Initial Issue, the Directors intend to implement a Placing Programme to raise capital for further investment.

The Directors intend to seek authority at a General Meeting to issue, following the Initial Issue, up to 300 million Ordinary Shares or C Shares pursuant to each issue of Shares following the Initial Issue (the "Subsequent Issues") (less the number of Ordinary Shares or C Shares issued pursuant to the Initial Issue), without having to first offer those Shares to existing Shareholders.

The issue price for any new Ordinary Shares to be issued pursuant to a Subsequent Issue will be determined by the Company and will be not less than the prevailing Net Asset Value per Ordinary Share at the time of issue plus a premium to cover the expenses of such issue. The issue price for any C Shares to be issued pursuant to a Subsequent Issue will be not less than £1.00.

For the avoidance of doubt, the authority to issue up to 300 million Ordinary Shares or C Shares is intended to cover issues of both class of share, and not to confer authority to issue 300 million Ordinary Shares and 300 million C Shares.

The authority to allot further Shares sought in connection with the Share Issuance Programme will, if passed, lapse on the date on which the Placing Programme closes.

Costs of the Proposals

Any Ordinary Shares issued pursuant to the Initial Issue or a Subsequent Issue will be issued at a price not less than the last published NAV per Ordinary Share at the time of issue, together with a premium intended to cover the expenses of the issue. The issue price will also take into consideration the prevailing share price per Ordinary Share.

Any C Shares issued pursuant to the Initial or a Subsequent Issue will be issued at £1.00. The costs of the relevant issue of such C Shares will be paid out of the proceeds of the issue and accordingly will be borne indirectly by investors in the relevant C Shares.

Benefits of the Proposals

The Directors believe that the Proposals will have the following benefits for Shareholders:

·   the Company will be able to raise additional funds in a timely manner to enable it to take advantage of opportunities to make further investments in accordance with its investment policy;

·    the Company will be able to increase its holding in portfolio companies, as well as initiating new positions, which is expected to accelerate the process of engaging with management;

·     the market capitalisation of the Company will increase, helping to make the Company attractive to a wider investor base, including to those investors who have expressed a preference for investing in larger investment trusts;

·     a greater number of Ordinary Shares in issue (either following an issue of Ordinary Shares or a conversion of C Shares into Ordinary Shares) should improve liquidity in the secondary market for the Ordinary Shares and make the Ordinary Shares more attractive to a wider range of investors; and

·     the Company's fixed running costs will be spread across a larger equity capital base, which should reduce the level of ongoing expenses per Ordinary Share.

Considerations associated with the Proposals

Shareholders should have regard to the following when considering the Proposals:

·    the Share Issuance Programme is not being made on a pre-emptive basis. Shareholders who do not, or cannot, participate in any issue under the Share Issuance Programme for an amount at least pro rata to their existing holding will have their percentage holding diluted;

·   there can be no guarantee that the Company will ultimately be able to make further investments in accordance with its investment policy on satisfactory terms, or at all; and

·    Shareholders should be aware that the past performance of the Company or of the Investment Manager is not necessarily indicative of likely future performance.

Timetable

A Prospectus and Circular are expected to be published in the near term and will set out the timetable for the above proposals in full.