CLL to be in OIL SANDS SECTOR FUNDFIRST POSTED BY clovis7 on UTS board
Thanks FOR GREAT NEWS
A copy of this preliminary prospectus has been filed with the securities regulatory authorities in each of the provinces of Canada but has not yet become final for the purpose of the sale of securities. Information contained in this preliminary prospectus may not be complete and may have to be amended. The securities may not be sold until a receipt for the prospectus is obtained from the securities regulatory authorities.
No securities regulatory authority has expressed an opinion about these securities and it is an offence to claim otherwise.
PRELIMINARY PROSPECTUS OIL SANDS SECTOR FUND
Initial Public Offering January 27, 2006
Maximum: $________Oil Sands Sector Fund (the “Trust”) is an investment trust established under the laws of the Province of Ontario. This prospectus qualifies the issuance of transferable, redeemable units (the “Units”) of the Trust. The Trust will be managed by Markland Street Asset Management Inc. (the “Manager”), which has engaged AGF Funds Inc. (“AGF” or the “Investment Advisor”) to provide investment advisory and portfolio management services to the Trust.
The Trust’s investment objectives are:
(i) to provide long term capital appreciation for holders of Units (“Unitholders”); and
(ii) to provide Unitholders with a stable stream of quarterly cash distributions targeted to be $0.125
per Unit ($0.50 per Unit per annum or 5.0% per annum on the original issue price of $10.00 per
Unit).
The Trust will seek to achieve its investment objectives by actively managing a portfolio (the “Portfolio”) of equity securities initially comprised of approximately 40 issuers, consisting primarily of issuers participating in the Canadian oil sands sector with the balance of the Portfolio (up to 25% of the total assets) invested in other issuers involved in the energy sector. The Portfolio’s composition will vary over time depending on the Investment Advisor’s assessment of market conditions and outlook. It is anticipated that holdings in the following 15 securities, presented by order of their initial weighting,will represent approximately 60% of the initial Portfolio:
1. Suncor Energy Inc.
2. Canadian Oil Sands Trust
3. Petro-Canada
4. Imperial Oil Ltd.
5. Shell Canada Ltd.
6. Nexen Inc.
7. Western Oil Sands Inc.
8. UTS Energy Corp.
9. Canadian Natural Resources Ltd.
10. Husky Energy Inc.
11. BlackRock Ventures Inc.
12. Enerplus Resources Fund
13. Connacher Oil and Gas Limited
14. OPTI Canada Inc.
15. Total S.A.
Quarterly distributions for the period ending December 31, 2006 will be $0.125 per Unit ($0.50 per annum or 5.0% per annum on the original issue price of $10.00 per Unit). Commencing in 2007, the Trust will annually determine and announce each January the distribution amount for the following 12 months based upon prevailing market conditions and the Manager’s estimate of distributable cash flow for the year. The Trust may make additional distributions in any given year. The initial cash distribution of $0.125 is expected to be payable on or before July 17, 2006 to Unitholders of record on June 30, 2006.
Based on its initial anticipated composition, the Portfolio is expected to generate approximately 3.63% of distribution and dividend income per Unit per annum, which, after deduction of expenses, will be distributed by the Trust to Unitholders. The balance of the quarterly distributions is expected to be funded through sales of securities in the Portfolio or other returns, if any. The Portfolio would be required to appreciate at a rate of approximately 3.63% per annum in order for the Trust to maintain a stable NAV while making quarterly cash distributions. Therefore, it is expected that distributions to Unit holders will be characterized as capital gains, dividends and returns of capital. If the return on the Portfolio is less than the amount necessary to fund the quarterly distributions, the Manager will return a portion of the capital of the Trust to Unitholders to ensure that the distribution is paid and accordingly, NAV per Unit will be reduced. See “Distributions”.
Prospective purchasers may purchase Units either by
(i) cash payment, or (ii) an exchange (the “Exchange Option”) of freely tradeable securities of those issuers set forth in this prospectus under the heading “Exchange Option – Exchange Eligible Issuers” (collectively, the “Exchange Eligible Issuers”). The Exchange Option does not constitute, and is not to be construed as, a take-over bid for any Exchange Eligible Issuer. See “Exchange Option”.
Price: $10.00 per Unit
Minimum Purchase: 100 Units
Price to the Public(1)
Agents’ Fee
Net Proceeds
to the Trust(2)
Per Unit .......................................................................... $ 10.00 $ 0.50 $ 9.50
Total Maximum Offering(3)............................................ $
Total Minimum Offering(4) ............................................ $
Notes:
(1) The offering price was established by negotiation between the Agents (as defined herein) and the Manager. The price per Unit is payable in cash or in securities of Exchange Eligible Issuers deposited pursuant to the Exchange Option.
(2) Before deducting the expenses of this offering estimated at $750,000, subject to a maximum of 1.5% of the gross proceeds of this offering, which, together with the Agents’ fees, will be paid out of the proceeds of this offering.
(3) There will be no closing unless a minimum of
Units are sold.
(4) The Trust has granted the Agents an option (the “Over-Allotment Option”), exercisable for a period of 30 days from the
closing of this offering, to purchase at the offering price additional Units in an amount equal to up to 15% of the aggregate
number of Units issued at the closing of this offering, which Over-Allotment Option and additional Units are qualified under
this prospectus. If the Over-Allotment Option is exercised in full, under the maximum offering, the total price to the public,
Agents’ fees and net proceeds to the Trust will be $ ___$___and $___., respectively. See “Plan of Distribution”.
Commencing in 2007, Units may be surrendered for redemption during the period from July 15th until
5:00 p.m. (Toronto time) on the 20th Business Day before the last Business Day in August in each year
(the “Notice Period”), subject to the Trust’s right to suspend redemptions in certain circumstances. Units
surrendered for redemption by a Unitholder during the Notice Period will be redeemed on the last Business Day of August of each year (the “Annual Redemption Date”) and the Unitholder will receive
payment on or before the 15th Business Day following the Annual Redemption Date. Unitholders will receive a redemption price per Unit equal to the Net Asset Value per Unit determined as of the Annual
Redemption Date less (i) the aggregate of all brokerage fees, commissions and other costs relating to the disposition of securities in the Portfolio necessary to fund such redemptions and (ii) if the Manager determines that it is not practicable or necessary for the Trust to effect all or part of such disposition, then the aggregate of all brokerage fees, commissions and other transaction costs that the Manager estimates would have resulted from such disposition.