TORONTO, ONTARIO--(Marketwire - Oct. 18, 2012) - Original Commerce Split Fund (the "Fund") announces that all Priority Equity shares and Class A shares will be redeemed on October 31, 2012. The early termination of the Fund is a result of the Fund's net assets declining below the minimum $5 million threshold as at the October 15, 2012 valuation date. The $5 million threshold was established and approved at the special meeting of shareholders held on February 3, 2010 and was designed to avoid the potential consequences of operating a small fund with an increasing expense ratio and/or lack of trading liquidity.
The formula to calculate the final redemption prices upon an early termination event was also approved at the February 3, 2010 special meeting of shareholders. Under this formula, each holder of a share of the Fund would receive its pro rata share of the net asset value of the Fund at October 31, plus (in the case of the Priority Equity shares) all dividends in arrears. The pro rata share of the net asset value payable to a holder of a particular class of shares will be equal to the ratio, the numerator of which is the volume weighted average trading price (the "VWAP") of the shares of that class on the TSX calculated over the 20 trading days ending on October 17, 2012 (the day immediately prior to the announcement of the termination event) and the denominator of which is the aggregate VWAP of both classes of shares on the TSX calculated over the same 20 day period.
Based on the current net asset value per unit, the expected proceeds of the liquidation of all assets and the accrual of final expenses, it is expected that the final redemption price for Priority Equity shares will be in a range of $9.20 to $9.27 per Priority Equity share and the final redemption price for Class A shares will be in the range of $0.43 to $0.45 per Class A share under the final redemption formula as described above. The final redemption proceeds are expected to be paid on or about November 13, 2012.
Final details of the exact payment for each Class of share will be provided in a press release after the final net asset value on October 31, 2012 has been determined.