TORONTO , May 17, 2019 /CNW/ - B.E.S.T. Total Return Fund Inc. (the " Fund ") today announced that, at a special meeting of the Fund, shareholders of the Fund approved a special resolution (the " Special Resolution ") to amend the articles of the Fund to permit the Fund to redeem the Class A Shares and Class C Shares of the Fund, for cash, at a price per share equal to the net asset value per share.
B.E.S.T. Investment Counsel Limited, in its capacity as the manager of the Fund (the " Manager "), has determined that, due to the reduced size of the Fund and the inability of the Fund to raise additional capital, it is in the best interest of the Fund to terminate the business of the Fund by way of a distribution to holders of Class A Shares and Class C Shares of all or substantially all of the assets of the Fund.
In connection therewith, the Fund intends to redeem all Class A Shares for cash at a price per share equal to the net asset value per share within the next month (the " Share Redemption "). The Manager has further determined it is in the best interest of the Fund and its shareholders to complete the one-time sale of certain assets held by the Fund, including the Private Assets, which sale will occur prior to the Share Redemption.
The Private Assets cannot be distributed on a pro rata basis to shareholders of the Fund because such shareholders may not all qualify as accredited investors and, as private issuers, the constating documents of many issuers of the Private Assets restrict the number of shareholders they can have. Further, the Manager has determined that increased costs associated with an alternative sale process will negatively impact the net asset value of the Fund and there is no assurance that such a process will result in any sale or a sale of the Private Assets at a sale price that is higher than the price to be obtained under the Private Asset Sale. Based on a number of discussions with potential purchasers of the Private Assets, the Manager has determined that other potential purchasers would seek to purchase the Private Assets at a significant discount to their current carrying value, if at all.
To ensure the fairness of the Private Asset Sale, the Fund retained an independent national accounting firm experienced in the valuing of private assets, BDO Canada LLP, to determine the fair value of the Private Assets. Further, the Independent Review Committee of the Fund reviewed and approved the proposed Private Asset Sale from a conflict of interest perspective, in accordance with National Instrument 81-107 – Independent Review Committee for Investment Funds .
About B.E.S.T. Total Return Fund Inc.
B.E.S.T. Total Return Fund Inc. is a labour sponsored investment fund corporation established in 2003. It specializes in generating interest and dividend income as well as long-term capital appreciation through investments in a diversified portfolio of small and medium-sized private and public companies which qualify as eligible investments. The Fund invests in securities such as convertible debentures and mezzanine debt as well as equity securities such as common shares and preferred shares of eligible businesses that, in the Fund's opinion, have the greatest potential to achieve the Fund's objectives.
SOURCE B.E.S.T. Total Return Fund Inc.
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