B.E.S.T. Total Return Fund Inc. Announces Change in Valuation of a Portfolio Company
Toronto, Ontario--(Newsfile Corp. - December 14, 2018) - B.E.S.T. Total Return Fund Inc. ("the Fund") announced today that it has adjusted the valuation of its holdings in its portfolio company, Intelligent Mechatronic Systems Inc. including its subsidiaries (the "Company") following the approval of the vesting and distribution order by the Ontario Superior Court of Justice (the "Court") and the closing of the sale of the assets of the Company on December 14, 2018. The Court approved, among other things, a transaction (the "Transaction") for the sale of substantially all of the Company's assets to Trak Global Group Limited ("Trak Global"), the vesting in Trak Global of all the Company's right, title and interest in the assets of the Company and the delivery of shares in Trak Global (the "Consideration Shares") to the senior lenders to the Company, which include the Fund.
The Fund estimates that the change in value of the Company upon the distribution of the Consideration Shares results in a decrease of approximately $0.85 per share of the Fund. The costs incurred by the Fund to affect the sale process and receivership has resulted in a cost of approximately $0.55 per share of the Fund.
Despite the adjustment to the valuation of the Company and the impact on the total assets of the Fund as a result of the Transaction, Management and the Board of the Fund believe that, going forward, the sale of the assets of the Company was the best course for the business of the Company. Under Trak Global, it is anticipated that the Company will be rationalized, and the operations will be supported with appropriate funding.
Trak Global operates a similar business in Europe, creating results-driven telematics solutions for the insurance, fleet, rental and automotive industries since 2009. Since the Company operates extensively in North America, the resulting Transaction represents ownership in a global telematics corporation with world-class technology. Management believes that there will be synergies through the combination of the Company and Trak Global, which will be reflected through an increase in the value of the Consideration Shares going forward.
All amounts presented are unaudited as of the date hereof and represent estimations based on information made available to the Fund. The final valuation adjustments are subject to continuing review and approval by the Board of Directors of the Fund.
About B.E.S.T. Total Return Fund Inc.
B.E.S.T. Total Return Fund Inc., established in 2003, is registered as a labour sponsored investment fund corporation in Ontario and a registered labour-sponsored venture capital corporation federally. The Fund seeks to hold a balanced portfolio of investments with both income and growth objectives.
This news release contains statements that may constitute "forward-looking statements" or "forward looking information" under applicable securities laws, including statements relating to the Fund and its plans, objectives, intentions and expectations as well assumptions, including those regarding its future performance, the combination of the Company with Trak Global, any resulting rationalization or synergies, its ability to obtain funding and any increase in value of the Consideration Shares. Certain statements made in this news release that are not historical facts are also forward-looking statements. These forward-looking statements reflect management's current internal projections, expectations, intentions or beliefs and are based on information currently available to the Fund. In some cases, forward-looking statements can be identified by terminology such as "may", "will", "should", "expect", "estimate," "intend", "plan", "anticipate", "believe", "predict", "potential", "continue" or the negative of these terms or other comparable terminology. A number of factors could cause actual events or results to differ materially from those discussed in the forward-looking statements. Risks and uncertainties that could cause or contribute to such differences include, but are not limited to those described under "Risk Factors" in the Fund's most recent management information circular, which is available on SEDAR. The forward-looking statements contained herein are expressly qualified in their entirety by this cautionary statement and the Fund cannot provide any assurance that forward-looking statements will materialize. The forward-looking statements included in this news release are made as of the date of this news release and the Fund undertakes no obligation to publicly update such forward-looking statements to reflect new information, subsequent events or otherwise except as may be required by applicable securities laws.
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