NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, TO US PERSONS OR IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA, THE REPUBLIC OF SOUTH AFRICA, THE REPUBLIC OF IRELAND, JAPAN OR ANY JURISDICTION IN WHICH THE SAME WOULD BE UNLAWFUL.

This announcement does not constitute or form part of, and should not be construed as, any offer for sale or subscription of, or solicitation of any offer to buy or subscribe for, any shares in Fair Oaks Income Limited or securities in any other entity, in any jurisdiction, including the United States, nor shall it, or any part of it, or the fact of its distribution, form the basis of, or be relied on in connection with, any contract or investment decision whatsoever, in any jurisdiction. This announcement does not constitute a recommendation regarding any securities.

Fair Oaks Income Limited

31 October 2017

FAIR OAKS INCOME 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 EGM

PROPOSAL TO SEEK SHAREHOLDER AUTHORITY ON THE ISSUE OF SHARES ON A NON-PRE-EMPTIVE BASIS

1.     Introduction

An extraordinary general meeting of the Company was held on 29 March 2017, at which an extraordinary resolution proposed to Shareholders was passed, which empowered the Directors to issue, amongst other things, up to such number of 2017 Shares under the Placing Programme as represents 10 per cent. of the 2017 Shares then in issue following the Effective Date (the "March 2017 Share Issue Authority").

As announced on 29 September 2017, pursuant to a Subsequent Placing under the Placing Programme, the Company issued 28 million 2017 Shares on 2 October 2017 at an issue price of US$1.00 (the "October Issue").

In preparing for a renewal of the Shareholder authority for non-pre-emptive issues, it was discovered that the extent of the October Issue had inadvertently exceeded the March 2017 Share Issue Authority by approximately 0.6 per cent. of the 2017 Shares in issue following the Effective Date (the "Excess Issue").

The Board has today published a notice of the Extraordinary General Meeting, to be held on Tuesday 14 November 2017 at 10am, at which it will seek from Shareholders:

i.      approval to renew the authority for the Directors to issue further 2017 Shares on a non-pre-emptive basis; and

ii.    ratification of the Excess Issue.

The Board's recommendation is that Shareholders vote in favour of the Resolutions.

A copy of the notice of EGM will be submitted to the National Storage Mechanism and will shortly be available for inspection at http://www.morningstar.co.uk/uk/NSM. It will also be available to view on the Company's website at http://www.fairoaksincome.com.  

2.     Proposal

i.      Renew the March 2017 Share Issue Authority to issue new 2017 Shares on a non-pre-emptive basis

The Investment Adviser believes that there are ongoing opportunities to generate attractive risk-adjusted returns through investing in accordance with the Company's investment policy.

In order to facilitate further equity raises under the Placing Programme to fund such investment opportunities, the Board seeks authority:

(a)           (pursuant to Resolution 1 to be proposed at the Extraordinary General Meeting) for the Company to issue for cash up to 36 million 2017 Shares under the Placing Programme on a non-pre-emptive basis, representing approximately 10 per cent. of the 2017 Shares currently in issue; and

(b)           (pursuant to Resolution 2 to be proposed at the Extraordinary General Meeting in addition to Resolution 1, but Resolution 2 is only to be proposed conditional upon Resolution 1 being passed) for the Company to issue for cash up to a further 36 million 2017 Shares under the Placing Programme on a non-pre-emptive basis (in addition to the authority sought pursuant to Resolution 1), representing approximately 10 per cent. of the 2017 Shares currently in issue.

If both Resolution 1 and Resolution 2 are passed, Shareholders will be approving the disapplication of pre-emption rights in respect of a total of up to 20 per cent. of the existing 2017 Shares in issue. The Board recognises that this percentage authority is beyond the standard 10 per cent. pre-emption waiver sought by investment companies, but believes that the passing of both Resolution 1 and Resolution 2 is in Shareholders' interests given that:

·      the authorities are intended to be used to fund specific investment opportunities sourced by the Investment Adviser, thereby mitigating the potential dilution of investment returns for existing Shareholders; and

·      2017 Shares will be issued only at prices greater than the aggregate of the relevant prevailing Net Asset Value per share and a premium to cover the commissions and expenses of the issue under the Placing Programme and should therefore not be dilutive to the Net Asset Value per existing share.

If Resolution 1 is passed but Resolution 2 is not passed, Shareholders will be approving the disapplication of pre-emption rights in respect of only up to 10 per cent. of the existing 2017 Shares in issue.

The authority if granted shall expire on the earlier of the conclusion of the next annual general meeting of the Company or on the expiry of 15 months from the passing of the resolution except that the Company may before such expiry make offers or agreements which would or might require 2017 Shares or rights to subscribe for such shares in the Company to be issued after such expiry and notwithstanding such expiry the Directors may issue 2017 Shares or rights to subscribe for such shares in the Company in pursuance of such offers or agreements as if the power conferred by the resolution had not expired.

ii.    Ratify the Excess Issue

The March 2017 Share Issue Authority empowered the Directors to issue, amongst other things, up to such number of 2017 Shares under the Placing Programme as represented 10 per cent. of the 2017 Shares in issue following the Effective Date. This number equated to 26,351,036 2017 Shares, since immediately following the Effective Date the Company had 263,510,368 2017 Shares in issue. Additionally at that point the Company had 68,850,000 C Shares in issue, which subsequently converted into 69,414,570 2017 Shares to create aggregate issued 2017 Share capital of 332,924,938.

As the October Issue represented 8.4 per cent. of the 2017 Shares in issue at that date, and the Excess Issue represented an excess of approximately 0.6 per cent. over the limit permitted under the March 2017 Share Issue Authority, the Board is of the opinion that the Excess Issue does not constitute a material contravention of the March 2017 Share Issue Authority. Nonetheless, the Board has decided it appropriate to request Shareholders to ratify the Excess Issue.

3.     Extraordinary General Meeting

In connection with the above, the Extraordinary General Meeting has been convened for 10am on Tuesday 14 November 2017 at which the Resolutions will be put to Shareholders to:

Resolution 1:        authorise the Directors to issue up to a 36 million 2017 Shares for cash on a non-pre-emptive basis;

Resolution 2:        authorise the Directors to issue up to a further 36 million 2017 Shares for cash on a non-pre-emptive basis in addition to the authority sought pursuant to Resolution 1 (but please note that Resolution 2 will only be proposed conditional upon Resolution 1 being passed); and

Resolution 3:        ratify the Excess Issue,

all as described above.

Resolution 1 will be proposed as an extraordinary resolution. 

Resolution 2 will be proposed as an extraordinary resolution. Resolution 2 will only be proposed conditional upon Resolution 1 being passed.

Resolution 3 will be proposed as an ordinary resolution.

Extraordinary and ordinary resolutions require a majority of at least 75 per cent. and 50 per cent. respectively 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. 

All Shareholders are entitled to attend and vote at the Extraordinary General Meeting.  In accordance with the Articles, all Shareholders that are present in person or by proxy and are entitled to vote at the Extraordinary General Meeting shall upon a show of hands have one vote and upon a poll shall have one vote in respect of each Share held.

The quorum requirement for an extraordinary general meeting is two or more Shareholders present in person or by proxy.

Enquiries:

Fair Oaks Income Limited

Email: contact@fairoaksincome.com

Web: www.fairoaksincome.com

Fair Oaks Capital Limited

Investor Relations

DDI: +44 (0) 20 3034 0400

Email: ir@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 

Fair Oaks Income Limited

Fair Oaks Income Limited is a registered closed-ended investment company incorporated in Guernsey. The Company was admitted to trading on the Specialist Fund Market of the London Stock Exchange (now the Specialist Fund Segment of the Main Market of the London Stock Exchange) on 12 June 2014.

The investment policy of the Company is to invest (either directly and/or indirectly through the Master Fund and/or Master Fund II) in 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 remaining invested in the Master Fund and making new investments in Master Fund II.

Important Information

This document is for information purposes only and is not an offer to invest. All investments are subject to risk. Past performance is no guarantee of future returns. Prospective  investors are  advised  to seek  expert  legal, financial, tax  and other  professional advice  before making  any  investment decisions.

This announcement has been prepared by, and is the sole responsibility of, Fair Oaks Income Limited.

Numis Securities Limited ("Numis") is acting only for the Company in connection with the matters described in this announcement and is not acting for or advising any other person, or treating any other person as its client, in relation thereto and will not be responsible for providing the regulatory protection afforded to clients of Numis or advice to any other person in relation to the matters contained herein.