Dissident unitholders of Energy Income Fund have been quickly shot down in their bid to throw out the management of the fund, just a few hours after launching their attempt.
Wednesday, unitholders sought to requisition a meeting of unitholders of the fund to throw out Crown Hill Capital Corp., the current manager, and name Aston Hill Financial as the new manager. The unitholders are upset that the fund trades at a discount to its net asset value that's bigger than the discount of peers, and they blame Crown Hill's decision to issue warrants that dilute shareholders.
Alas, Crown Hill shot back quickly that the "purported requisition" was "not valid." Crown Hill said it had a number of reasons for the determination, but it's not saying what they are.
The fund invests in shares of oil and gas companies, and looks to generate income.
Energy Income Fund said in September that it would issue warrants at $5, which was a small discount to the trading price of the fund in the market. The warrants offered the ability to purchase one unit and were in the money not long after. The idea was to provide extra capital to allow the fund to make investments, and to increase the float.
The warrants also meant selling new shares well below the net asset value of the fund, which currently stands at $6.35 per unit, according to Crown Hill's web site.
Somehow, one suspects that the fight won't end here.