Proposed return of capital and Notice of GM 21

21 December 2016

NORTHERN INVESTORS COMPANY PLC

Proposed Return of Capital and Notice of General Meeting

Northern Investors Company PLC (the "Company") reported on 15 November 2016, in the half-yearly financial report for the six months ended 30 September 2016, that the next distribution to shareholders will be made by means of a bonus issue to all ordinary shareholders of new B preference shares, which will then be redeemed for cash.  The Company is now pleased to confirm that a circular giving details of a proposed Return of Capital to Shareholders of 250 pence per Ordinary Share by way of the issue and redemption of redeemable B Shares to shareholders has been published today.

The Company is proposing to introduce a mechanism to enable capital to be returned to Shareholders through a compulsory procedure involving a bonus issue, on a pro rata basis, of B Shares followed by the redemption of such B Shares at the option of the Company.  The introduction of the B Share Scheme will require Shareholder approval, which will be sought at a general meeting of the Company to be held at 3.00pm on 19 January 2017.  Subject to the approvals being obtained at the General Meeting, the Company will be able to make future capital returns through the issue and redemption of B Shares without the need for further Shareholder approval.  This will be a less costly way of returning capital than tender offers and can be achieved more quickly.  It also ensures that all Shareholders are treated equally as capital is returned to all Shareholders on a pro rata basis.

Subject to the approvals being obtained at the General Meeting, the Company proposes to return £6.2 million to Shareholders, representing 250 pence for each Ordinary Share currently in issue, by the issue of 5 B Shares for each Ordinary Share held on the Return of Capital Record Date.  The B Shares will be redeemed compulsorily by the Company shortly after their issue.

Further Details of the B Share Scheme

Subject to the B Share Scheme Resolution being passed, the Company will be able to return capital to Shareholders by capitalising the appropriate amount standing to the credit of its special reserve (which was created through the cancellation of the Company's share premium account) and then applying the resulting amount for the purpose of paying up the nominal value of the appropriate number of B Shares.  Such B Shares would then be issued to Shareholders on a pro rata basis as determined from time to time by the Directors and, shortly thereafter, the Company would then redeem and cancel the B Shares in accordance with their terms for an amount not exceeding the amount treated as paid up on the issue of the B Shares.  Following the redemption and cancellation of the B Shares, the redemption proceeds will then be sent to Shareholders.

Subject to the B Share Scheme Resolution being passed at the General Meeting, B Shares may be issued and redeemed at the discretion of the Company without the need for additional Shareholders' approval.  Future capital returns under the B Share Scheme will be notified to Shareholders by means of an RIS Announcement.

No share certificates will be issued in relation to the B Shares and the B Shares will not be listed or traded on the London Stock Exchange or any other recognised exchange.  The B Shares will have limited rights, including a right to a dividend at a fixed rate.

The Return of Capital

Subject to the B Share Scheme Resolution being passed at the General Meeting, the Company proposes to return £6.2 million to Shareholders utilising the B Share Scheme.  Under these proposals, Shareholders will receive 5 B Shares for each Ordinary Share held by them on the Return of Capital Record Date by way of a bonus issue.  Shortly after their issue, the B Shares will be redeemed by the Company in accordance with their terms at a price of 50 pence for each B Share then in issue.  Shareholders are expected to receive the proceeds of the redemption by 31 January 2017.  In addition, Shareholders will receive a small fixed rate dividend on the B Shares as explained more fully in the Circular.

The Circular, which includes a form of proxy for use at the General Meeting, has been posted to Shareholders today and a copy will be available for inspection at the Company's registered office at Time Central, 32 Gallowgate, Newcastle upon Tyne NE1 4SN during normal business hours on weekdays (Saturdays, Sundays and public holidays excepted) from the date of this announcement until the commencement of the General Meeting.  The Circular is also available on the NVM Private Equity LLP website at www.nvm.co.uk .

A copy of the circular has been submitted to the National Storage Mechanism and will shortly be available for inspection at www.morningstar.co.uk/uk/NSM

Expected timetable

Unless otherwise defined, capitalised terms used in this announcement have the same meaning as those defined in the circular published by the Company on 21 December 2016.

Enquiries:

Northern Investors Company PLC Nigel Guy/Christopher Mellor                                          0191 244 6000

Stifel Nicolaus Europe Limited Neil Winward/Mark Bloomfield/Gaudi Le Roux                 020 7710 7600

Website:  www.nvm.co.uk

Neither the contents of the NVM Private Equity LLP website nor the contents of any website accessible from hyperlinks on the NVM Private Equity LLP website (or any other website) is incorporated into, or forms part of, this announcement.