Press release from Marketwire
Front Street U.S. MLP Income Fund Ltd. and Front Street Strategic Yield Fund Ltd. Update on Merger and Special Redemption
Tuesday, April 23, 2013
Front Street U.S. MLP Income Fund Ltd. and Front Street Strategic Yield Fund Ltd. Update on Merger and Special Redemption16:31 EDT Tuesday, April 23, 2013
TORONTO, ONTARIO--(Marketwired - April 23, 2013) -
THIS PRESS RELEASE IS NOT FOR DISTRIBUTION IN THE UNITED STATES OR OVER U.S. WIRE SERVICES
Front Street U.S. MLP Income Fund Ltd. ("FS U.S. MLP") (TSX:MLP) and Front Street Strategic Yield Fund Ltd. ("FSS") (TSX:FSS) previously announced that on April 19, 2013 shareholders of FS U.S. MLP and FSS (together, the "Funds") approved at special meetings of the Funds special resolutions to authorize the merger of the Funds.
Notwithstanding the approval of the merger by shareholders of each of the Funds, the merger will not be implemented until the manager of the Funds, Front Street Capital 2004 (the "Manager"), obtains satisfactory assurances from the Department of Finance that the merger, and the resultant increase in the size of the forward agreements previously entered into by FS U.S. MLP, will not have adverse tax consequences for the shareholders of FS U.S. MLP in light of the proposed changes in tax law announced in the recent Federal budget.
If these assurances cannot be obtained, it is the Manager's intention to redeem all of the outstanding equity shares of FSS and to terminate FSS on a date selected by the board of directors of FSS in consultation with the Manager, provided that the board of directors has determined in its opinion that it is no longer economically practical to continue FSS or that it is in the best interest of the shareholders of FSS to terminate the fund. Immediately prior to the termination of FSS, the Manager will, to the extent possible, convert the assets of FSS to cash and will satisfy or make appropriate provision for all liabilities of FSS. Upon such termination, shareholders of FSS will receive their pro rata share of the net assets of FSS after the forward agreement and all of the liabilities of FSS have been paid; provided, however, that any assets of FSS not liquidated may be distributed in specie rather than in cash, subject to compliance with any securities or other laws applicable to such distributions.
While it is still unclear when satisfactory assurances will be obtained and the merger effected, a special redemption right for shareholders of FSS will be implemented on May 16, 2013. An FSS shareholder who retracts an FSS equity share under this special redemption right will receive from FSS a redemption price per FSS equity share equal to the net asset value per FSS equity share calculated on May 16, 2013. Shareholders of FSS have until 5:00 p.m. ET on May 10, 2013 to provide FSS with notice if they wish to have their FSS equity shares redeemed pursuant to this special redemption right. Shareholders of FSS should contact their brokers if they wish to exercise this right as their brokers may have earlier deadlines to submit notice. Payment for the FSS equity shares so tendered for redemption pursuant to this FSS special redemption right will be made by FSS on or about May 24, 2013.
Complete details regarding the proposed merger and the special redemption right for FSS shareholders were outlined in the joint management proxy circular dated March 8, 2013. The joint management proxy circular is also available at www.sedar.com.
Certain statements in this press release may be viewed as forward-looking statements. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, intentions, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as "expects", "is expected", "anticipates", "plans", "estimates" or "intends" (or negative or grammatical variations thereof), or stating that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved) are not statements of historical fact and may be forward-looking statements. Statements which may constitute forward-looking statements relate to: the proposed timing of the merger and expected completion thereof; and the Funds that are proposed to be merged. Forward-looking statements are subject to a variety of risks and uncertainties which could cause actual events or results to differ from those reflected in the forward-looking statements including as a result of changes in the general economic and political environment, changes in applicable legislation, and the performance of each Fund. There are no assurances the Funds can fulfill such forward-looking statements and the Funds do not undertake any obligation to update such statements. Such forward-looking statements are only predictions; actual events or results may differ materially as a result of risks facing one or more of the Funds, some of which are beyond the control of the Funds.
FOR FURTHER INFORMATION PLEASE CONTACT:
Front Street Capital