FAIR PLAY Folks, The Jan 16, 2019 press release reported a change from monthly to quarterly distribution. The distribution amount was essentially unchanged, only the timing.
Here is a quote from that news release – also explains where I got that May 31 date:
[“Under the new quarterly distribution schedule, any future distributions declared by the Board would be for the three-month period ending on March 31, June 30, September 30 or December 31, as applicable. The distribution record date for each quarterly distribution period will be the last Business Day (as defined in the Trust indenture) of the second calendar month following the end of the applicable quarter, with the distribution payment date to be the 15th day of the month following the distribution record date (or if such day is not a Business Day, on the following Business Day).
In accordance with the new quarterly distribution schedule, the distribution record date and distribution payment date for the distribution of $0.209 per Unit for the first quarter of 2019 will be May 31, 2019 and June 17, 2019, respectively.
With the exception of the distribution for the first quarter of 2019, which was approved by the Board on January 14, 2019, the Board expects that any future quarterly distributions will normally be declared on or about the 15th day of the month immediately following the end of the applicable quarterly distribution period.
"We are pleased to maintain our distribution for the first quarter of 2019 at the same level paid to unitholders in the fourth quarter of 2018. We are confident that the strategic changes we've made to our business, which result in a $35 million annual improvement to our earnings, support the sustainability of the distribution going forward," commented Michael Fallquist, Chief Executive Officer of Crius Energy. "The change to a quarterly distribution schedule aligns with our strategy to simplify and streamline operations, allows us to better manage our intra-quarter liquidity and brings our distribution payment policy in line with our industry peers as well as the majority of TSX-listed companies that pay dividends regularly."]
In essence, we are told it is business as usual with the change essentially being a switch to quarterly distributions instead of monthly.
Enter Vistra, they make a bid for Crius and later increase their bid to $8.80 per trust unit. The Feb 7 news release reports that the previously declared distribution for Q1 will also be paid out. And then this is stated [Under the definitive agreement, Crius Energy has agreed not to declare any further distributions prior to the closing.] The Feb 20 report formalizes the $8.80 bid and reports the record date of Mar 26, 2019 for the Q1 distribution date and payment date of Jun 17, 2019.
In The March 28 news release reports that the shareholder have a agreed to the buyout by Vistra. Finally, the May 10 news release revokes the June 17 payment date and changes it to the closing date.
This is where we are today after a misfire on the distribution payment. For many of us it showed up in our investment accounts only to be reversed later.
Now to the point about FAIR PLAY…
As a unit holder I am disappointed with the cancellation of the Jun 17 payment. That payment is now set for the closing date but I have no status on that matter. With shareholder approval on March 28 it seems like there should be a progress update by now (almost three months have passed) on how the deal is progressing but I feel completely in the dark. I realize that no distribution has been declared for Q2 but it doesn’t seem fair to string us along. I invested in KWH.UN for the dividend and that now seems to be interrupted. And, the buyout that is coming is at no specific date. I looked at the web site for the Federal Energy Regulatory Commission (FERC) who is supposed to be delaying this deal but can’t find anything there. This makes me wonder if the delay is intentional. Clearly, Crius is proceeding with Business-as-Usual (making money) during this period. The expected but unpaid distributions (approximately $9M/quarter) during this time will significantly add to the value of Crius and that all accrues toward Vistra. I feel like I am getting the dirty end of the stick here. Are we being fairly treated? Other opinions?