HALIFAX, Nova Scotia, Nov. 02, 2018 (GLOBE NEWSWIRE) -- GrowthWorks Atlantic Venture Fund Ltd. (the “Atlantic Fund” or “Fund”) announced today that, as a result of triggering certain transitional rules in the federal Income Tax Act , and confirmation by applicable provincial Labour Sponsored Venture Capital Corporation regulators, shares issued for less than 8 years and redeemed by the Fund in accordance with the provisions of the Pro Rata Redemption Plan (the “PRRP”) and share rights can now be done without repayment of federal and provincial tax credits. As part of triggering the federal transition rules, Atlantic Fund confirmed its intention to revoke its federal registration within 3 years.
Under the PRRP, each shareholder’s proportionate amount of the distribution is used to redeem, to the extent possible, mature shares (being shares issued for more than 8 years) held by the shareholder at NAV per share at that time and for any remaining balance, by converting on a one for one basis a portion of non-mature shares (being shares issued for less than 8 years) held by the shareholder into shares of a “conversion series”. Conversion series shares are expected to be redeemed at essentially the same NAV per share after they become mature or at any time provided the shareholder repay applicable tax credits. As previously reported, Atlantic Fund completed an initial distribution to all shareholders on May 1, 2018, and a supplemental distribution to GIC Series shareholders on August 24, 2018. As the conversion series shares created with these distributions can now be redeemed by the Fund without the repayment of federal and provincial tax credits, Atlantic Fund will redeem effective November 2, 2018 all issued and outstanding shares of the following series at the same NAV per share as the relevant distribution:
- Conversion Series Balanced WOF 440 at $2.88/share
- Conversion Series GIC WOF 430 at $5.54/share
- Conversion Series GIC WOF 432 at $5.35/share
Atlantic Fund intends to continue to seek exits in its venture portfolio and distribute cash to shareholders as part of an orderly realization of value. While the operating expenses of Atlantic Fund have been reduced by approximately 50% since 2015, Atlantic Fund and its manager have continued to seek alternatives to further reduce operating expenses to extend the timeframe for seeking and executing exit transactions of the venture portfolio in the normal course and provide for additional distributions under the PRRP. Accordingly, Atlantic Fund intends to seek shareholder approval at its annual and special meeting scheduled for December 11, 2018, and then regulatory approval, of a revised compensation arrangement aimed at further aligning the interests of Atlantic Fund’s shareholders and its manager. Details regarding the revised compensation arrangement will be included in the shareholder meeting materials. There can be no assurance that the proposed revised compensation arrangement will receive the necessary approvals.
Forward Looking Statements: This press release contains forward looking statements including those regarding aligning interests and reducing operating expenses to extend the timeframe for seeking and executing exit transactions in the venture portfolio. These statements are based on beliefs and assumptions of management of Atlantic Fund at the time the statements are made, including beliefs and assumptions about future market conditions, projections on operating expenses and future cost savings, and other risks and uncertainties disclosed in Atlantic Fund’s most recent filings posted on SEDAR at www.sedar.com. These risks and uncertainties may cause actual results, events or developments to be materially different from those expressed or implied by such forward-looking statements. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. Unless required by law, neither Atlantic Fund nor its manager assumes any obligation to update any forward-looking statements or to reflect the occurrence of unanticipated events, whether as a result of new information, future events or results or other factors. No assurance can be given as to the timing or any amount of funds that will available for future distribution to shareholders under the PRRP or that Atlantic Fund will be able to complete an orderly realization of value (at current values or otherwise).
Reference:
Peter Clark
President & CEO
GrowthWorks Atlantic Venture Fund Ltd.
Suite 1502 – 1959 Upper Water Street
Halifax, Nova Scotia B3J 3N2
Tel: (506) 449-2969