The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Press release from CNW Group

Proventure Income Fund confirms transactions and provides guidance on January distribution

Wednesday, December 28, 2011

Proventure Income Fund confirms transactions and provides guidance on January distribution07:00 EST Wednesday, December 28, 2011Symbol: PVT.UN (TSX-V)CALGARY, Dec. 28, 2011 /CNW/ - Due to the recent increase in market price and level of trading activity of its units, Proventure Income Fund ("Proventure") is confirming previously announced transactions including the December 2011 special cash distribution, and is providing guidance on the anticipated special cash distribution to be declared and paid to its unitholders in January 2012 following the sale of certain assets by Proventure to Cervus Equipment Corp. ("Cervus").As announced by Proventure and Cervus on October 31, 2011, Proventure and Cervus have agreed to complete a series of transactions, including the sale from Proventure to Cervus of certain real estate assets that Cervus currently leases from Proventure for the purposes of operating Cervus' agricultural and construction equipment dealerships, for consideration equal to approximately $25.90 million. From Proventure's perspective, the transactions are necessary in order for Proventure to qualify for the real estate investment trust exemption to the SIFT rules under the Income Tax Act (Canada).Following the completion of certain of those previously announced transactions, on December 9, 2011 Proventure announced a special cash distribution to Proventure unitholders of record at the close of business on December 21, 2011 of $1.41 per unit. On December 14, 2011, Proventure announced that this December 2011 cash distribution will be paid to Proventure unitholders on or about December 28, 2011. The source of the funds for this December 2011 cash distribution is the cash portion of the proceeds from repayment by ProDev Trust of a promissory note issued in 2010 in consideration for the purchase of certain assets by ProDev from Proventure.For the sale of the assets from Proventure to Cervus, Proventure has received conditional approval from the TSX Venture Exchange and received the approval of its disinterested unitholders at a meeting held on December 21, 2011.  It is anticipated that the sale will be completed in early January 2012.  Proventure has agreed, following completion of the sale of the assets to Cervus, to declare a special cash distribution to its unitholders in January 2012 in an amount to be determined. The source of the funds for the January 2012 cash distribution is expected to be the cash portion of the proceeds from the asset disposition.  Proventure estimates the amount of the January 2012 cash distribution will be approximately $1.70, bringing the total amount of combined distributions (i.e. the December 2011 cash distribution plus the anticipated January 2012 cash distribution) to $3.10.Once these distributions are made, Proventure estimates that it will have a net book value per unit of approximately $0.25.Proventure encourages unitholders to refer to the press release dated October 31, 2011 for more information.Proventure is an open-ended mutual fund trust established under laws of the Province of Alberta. Proventure is in the business of owning and leasing commercial real estate and provides financing and leases real estate to Cervus Equipment Corporation. The units of Proventure are listed on the TSX Venture Exchange and trade under the symbol "PVT.UN".This press release contains forward-looking statements subject to various risk factors and uncertainties, which may cause the actual results, performances or achievements of Proventure to be materially different from any future results, performances or achievements expressed or implied by such forward-looking statements. Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. For further information: Peter Lacey - President & CEOof Proventure Income Fund Telephone: (403) 567-0339 Fax: (403) 567-0392 Email: placey@cervuscorp.com           Randy Muth - Chief Financial Officerof Proventure Income Fund  Telephone: (403) 567-0339 Fax: (403) 567-0392 Email: rmuth@cervuscorp.com