Toronto Stock Exchange: TZZ
VANCOUVER, Oct. 30, 2013 /CNW/ - Trez Capital Fund Management Limited
Partnership (the "Manager"), the manager of Trez Capital Mortgage Investment Corporation (the "Corporation"), today provided an update on the proposed change of the Corporation's
status (the "Proposed Transition") for purposes of Canadian securities regulations from that of an
investment fund to that of a public company (i.e. a reporting issuer
that is a not an investment fund). The Proposed Transition was first
announced on October 15, 2013.
The Board of Directors of the Corporation (the "Board") has today approved the materials that will be sent to shareholders in
connection with the special meeting (the "Meeting") to be held on November 29, 2013. The management information circular
forming part of those materials was prepared based on the disclosure
requirements for public companies. Since its inception, the Corporation
has consistently generated stable, monthly distributions as well as
increased its net asset value for its investors by investing in a
diversified portfolio of shorter term mortgage loans to qualified real
estate investors and developers. In that context, the Board believes
that it is in the best interest of the Corporation and its shareholders
to continue the Corporation's current investment objectives and
strategy under the public company regime, to avoid the potential
restrictions to the business of the Corporation that could result if
the regulatory changes to investment funds proposed by the Canadian
securities administrators on March 27, 2013 are implemented. Following
the Proposed Transition, the Corporation would continue to qualify as a
mortgage investment corporation under the Income Tax Act (Canada) and
would maintain the same investment objectives and strategies.
The Board is of the view that the Proposed Transition will provide
shareholders a number of benefits, including:
-
continuing the Corporation's ability to operate in accordance with its
existing investment objectives and strategies;
-
eliminating the trailer fee paid on Class A Shares which will likely
result in more income generated by the Corporation being available for
distribution to investors;
-
Class A shares become voting;
-
increased frequency of financial reporting;
-
the potential for research analyst coverage; and
-
Increased stability of capital resulting from the elimination of the
redemption feature.
Key changes to the Corporation that will be included in the Proposed
Transition and are described in greater detail in the meeting materials
are as follows:
-
As part of the transition to a public company regime, the concept of
investment restrictions will cease to exist. As such, the Corporation's
investment restrictions will become investment guidelines which may be
amended from time to time by the Board in the future. Certain
investment guidelines will be modified to prevent them from impeding
the ability of the Corporation to remain fully invested in a prudent
manner. Further, the limit on borrowing by the Corporation will be
removed as is the norm in the public company regime.
-
The Corporation will be authorized to issue a new class of shares, in
series, with the Board having the authority to determine the attributes
of each such series (including for voting, dividends and redemption
rights, and any conversion or exchange rights into Class A shares).
-
The management agreement between the Corporation and the Manager will be
amended to change the basis on which the management and performance
fees are calculated. These changes are required since the Corporation
will cease calculating its net asset value after the Proposed
Transition is implemented.
-
The management agreement also will be amended to incorporate termination
provisions and other terms that are comparable to the management
agreements in place with other mortgage investment corporations that
are public companies.
The Corporation has retained RBC Capital Markets to act as a soliciting
dealer and financial advisor to the Corporation in connection with the
Proposed Transition. Provided the Proposed Transition is approved and
implemented, and subject to certain limits, the Corporation will pay to
brokers a solicitation fee equal to $0.05 for each Class A share that
is voted in favour of the Proposed Transition and not submitted for
redemption on December 31, 2013.
The materials for the meeting will be filed on SEDAR and available on
the Manager's website at www.trezcapital.com by November 6, 2013.
The Corporation will host a conference call for shareholders to discuss
the Proposed Transition on Wednesday, November 13, 2013 at 11:00 a.m.
EST. The details for this call are as follows:
North America Toll-Free: 1-866-364-0217
Following the call, a replay will be accessible until Friday November 29th, 2013 using the following dial-in information:
North America Toll-Free: 1-800-558-5253
Conference Code: 21683620#
SOURCE Trez Capital Junior Mortgage Investment Corporation
