TORONTO, ONTARIO--(Marketwire - June 29, 2012) - GrowthWorks Canadian Fund Ltd. ("Canadian Fund") announced that shareholders present and represented by proxy at Canadian Fund's annual and special meeting held on June 28, 2012 (the "AGM") passed a resolution approving the previously announced Redemption Management Plan ("RMP") for the Canadian Fund's Class A shares.
At the AGM, shareholders voted on and approved the RMP, with 86% of votes cast voted in favour of the resolution. A total of 1,384 shareholders holding 515,552 Class A shares of Canadian Fund were represented at the meeting, which represents approximately 1.8% of the outstanding Class A shares. This level of participation is consistent with recently held shareholder meetings and reflects Canadian Fund's widely disbursed Class A shareholdings. The resolution approving the RMP provides for the implementation of semi-annual redemption processing for Canadian Fund's Class A shares until November 10, 2013 and authorizes the Board of Directors, without further approval by shareholders, to extend semi-annual redemption processing for a further 12 months thereafter to November 10, 2014. Any further extensions of the RMP would be subject to securing further shareholder approval. Processing redemptions semi-annually under the RMP remains subject to Canadian Fund securing necessary regulatory orders and having available cash to fund redemptions.
Commenting on the shareholder vote, David Levi, President and CEO of Canadian Fund, stated, "We are pleased that Canadian Fund's shareholders approved this plan. The RMP aims to preserve capital so that Canadian Fund may back the best companies in its portfolio through to an exit while at the same time providing a mechanism to fund redemptions with available cash."
Regulatory Application and Implementation of the RMP
Canadian Fund has applied for but not yet received a regulatory order that would permit the Canadian Fund to implement semi-annual Class A share redemptions under the RMP. If the necessary regulatory order is secured, semi-annual redemptions would be processed based on redemption values determined by the Board of Directors after taking into consideration projected divestment activity and Canadian Fund's follow-on investment needs, liabilities and operating commitments. Redemption values may be increased or decreased in the discretion of the Board of Directors if divestment activity exceeds or falls short of projected levels. Redemption dates would also be determined by the Board of Directors. The RMP represents a novel approach to managing liquidity and reflects the unique circumstances of Canadian Fund, including its very mature venture portfolio as compared to other retail venture capital funds that have ceased redemptions. Canadian Fund will issue a further press release when the regulatory review process concludes.
There can be no assurance that Canadian Fund will secure the regulatory order needed to implement semi-annual redemption processing under the RMP or that the Fund will have sufficient available cash to process redemptions. If Canadian Fund does not secure the regulatory order needed to implement semi-annual redemption processing, the Board of Directors will review alternative mechanisms for distributing available cash while Canadian Fund Class A share redemptions remain closed.
Forward-Looking Statements: This press release contains forward-looking statements about future Canadian Fund Class A share redemptions, Canadian Fund's ability to make follow-on investments and to divest from its venture investment portfolio. These statements are based on beliefs and assumptions of management of Canadian Fund at the time the statements are made, including beliefs and assumptions about Canadian Fund's ability to secure the regulatory order needed to process Class A share redemptions semi-annually as contemplated under the RMP, the Fund's ability to generate sufficient funds to process redemptions under the RMP, future market conditions and future levels of divestment activity and Class A share redemption requests. These beliefs and assumptions are subject to known and unknown risks and uncertainties, including risks and uncertainties associated with seeking discretionary regulatory orders, volatility of market conditions and, in turn, the climate for divestment activity, performance of portfolio companies, valuations of portfolio companies, financing needs of portfolio companies and the availability of capital to satisfy such financing needs and other risks and uncertainties disclosed in Canadian Fund's most recently filed prospectus and other regulatory 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. Unless required by law, neither Canadian 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.
Commissions, trailing commissions, management fees and expenses all may be associated with investment fund purchases. Read a fund's prospectus before investing. Investment funds are not guaranteed, their values change frequently and past performance may not be repeated. Canadian Fund purchased the assets of Canadian Science and Technology Growth Fund and Capital Alliance Ventures in 2005, of ENSIS Growth Fund in 2008 and of Canadian Medical Discoveries Fund in 2009, in each case in exchange for Class A shares. ENSIS is a registered trademark of ENSIS Capital Corporation.