B.E.S.T. Venture Opportunities Fund to Seek Shareholder Approval in Connection with Value Preservation Strategy
Proposal includes application to list Class A Shares on a Canadian stock exchange and temporary suspension of redemption rights
Temporary suspension of redemption rights in effect until Shareholder Meeting
Toronto, Ontario--(Newsfile Corp. - January 4, 2022) - B.E.S.T. Venture Opportunities Fund Inc. (the "Fund") announced today that the Fund's board of directors (the "Board of Directors") has approved a value preservation strategy pursuant to which, at the Fund's upcoming annual and special shareholder meeting (the "Meeting"), to be held on February 24, 2022, shareholders will be asked to vote on certain proposed actions (the "Proposed Actions") including (i) to approve an amendment of the Fund's articles, which amendment shall provide for a suspension of all redemptions of the Fund's Class A shares until at least December 31, 2024, and (ii) to authorize an application to list the Class A Shares on a Canadian stock exchange.
John Richardson, Chief Executive Officer of the Fund commented "The manager and the Board of Directors have determined that it is in the best interest of the Fund's shareholders to take proactive steps to preserve the Fund's current liquidity position in order to ensure that the Fund has sufficient time and financial flexibility to pursue an exit from the Fund's remaining private investments."
In recent years, the Fund's net asset value ("NAV") and its liquidity position, have experienced a significant decline, primarily due to normal course redemptions, which amounted to $3,390,442 during the year-ended August 31, 2021 (or approximately 25% of the Fund's NAV as at August 31, 2021). While the Fund has historically honoured all redemption requests, such redemptions have contributed to an increasing proportion of the Fund's NAV being comprised of illiquid private investments. The Fund's manager, B.E.S.T. Investment Counsel Limited (the "Manager"), projects that, based on historical redemption trends, absent a successful exit from the Fund's remaining private investments, if the Fund continues to honour redemptions in the normal course it will have no available liquidity to fund redemptions or operating expenses by mid-to-late 2023. Accordingly, The Proposed Actions are intended to mitigate the Fund's liquidity issues as well as the impact of the temporary suspension of redemption rights on holders of Class A shares. In the interim, until the Proposed Actions have been voted on by shareholders at the Meeting, the Fund has temporarily suspended redemptions (the "Temporary Suspension"). During the Temporary Suspension, the Manager has voluntarily agreed to suspend the collection of its management fees. The Manager will continue to determine the NAV of the Fund daily.
The decision to implement the Temporary Suspension and to pursue the Proposed Actions follows careful consideration by the Board of Directors of the Fund's current liquidity situation and the anticipated requests for redemptions by holders of the Fund's Class A shares. In addition, the Independent Review Committee of the Fund has concluded that the Proposed Actions, including the arrangement governing the Temporary Suspension, achieve a fair and reasonable result for the Fund.
In addition, in connection with the proposed amendment to the redemption rights, Class A Shareholders will be entitled to exercise dissent rights pursuant to and in the manner set forth in Section 190 of the Canada Business Corporations Act. Class A Shareholders that validly exercise their dissent rights will be entitled to receive the "fair value" of their Class A Shares determined in accordance with Section 190 of the CBCA, in exchange for the cancellation of their Class A Shares. The Board and the Manager believe that the NAV of the Class A Shares represents their fair value.
Further details regarding the Proposed Actions will be included in a management information circular to be mailed to shareholders in advance of the Meeting.
About B.E.S.T. Venture Opportunities Fund Inc.
B.E.S.T. Venture Opportunities Fund Inc., established in 1993, is registered as a labour sponsored investment fund corporation under the Community Small Business Investment Funds Act (Ontario) and as a labour-sponsored venture capital corporation under the Income Tax Act (Canada). The Fund makes investments in eligible Canadian businesses with the objective of achieving long-term capital appreciation.
This news release contains forward-looking information within the meaning of applicable securities legislation, which reflects the Fund's current expectations regarding future events. Forward-looking information includes statements that are predictive in nature, depend upon or refer to future events or conditions, or include words such as "expects", "anticipates", "intends", "plans", "believes", "estimates" and other similar expressions or negative versions thereof. In particular, forward-looking statements in this news release include, but are not limited to, statements regarding future redemptions and the impact on liquidity, future exits from the Fund's private investments, the daily determination of NAV, the timing of the Meeting and the content of the circular. Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond the Fund's control, that could cause actual results and events to differ materially from those that are disclosed in, or implied by, such forward-looking information. The forward-looking information contained herein is made as of the date of this news release and, except as expressly required by applicable law, the Fund assumes no obligation to publicly update or revise such information, whether as a result of new information, future events or otherwise.
For more information, please contact:
John Richardson, Chief Executive Officer or Tom Lunan, Chief Financial Officer, by telephone at 647-403-5072 or 416-203-7331 (ext. 230), respectively, or by email at firstname.lastname@example.org.
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/109007