Welcome!

News Feed Item

GrowthWorks Canadian Fund Disappointed That RMP Not Approved

Fund to process redemption requests when sufficient liquidity is available

TORONTO, ONTARIO -- (Marketwire) -- 12/03/12 -- As previously announced, on November 10, 2011, GrowthWorks Canadian Fund Ltd. ("Canadian Fund") obtained an initial regulatory order in connection with the Board of Directors' decision to close Class A Share redemptions. The initial order was extended to July 31, 2012 and then to November 30, 2012 (the "Order"). Canadian Fund had applied to extend the effect of the previously granted Order to July 31, 2013. Securities regulators elected not to grant the extension, as they were unable to conclude that granting the extension on the terms requested by Canadian Fund would not be prejudicial to the public interest. Securities regulators proposed a six-week extension of the Order with a condition that no management fees or other compensation be paid or accrue to the manager of Canadian Fund. The proposed extension was not acceptable to Canadian Fund as complying with the terms of the extension would have forced Canadian Fund to breach the management contract with its manager and caused a default under financing arrangements put in place to support Canadian Fund's liquidity. Securities regulators also advised Canadian Fund that they are not willing to issue an order that would allow Canadian Fund, when cash is available, to periodically process redemptions under the Redemption Management Plan or "RMP" adopted by the Board of Directors and approved by shareholders of Canadian Fund.

Canadian Fund closed redemptions of Class A Shares just over one year ago on November 10, 2011. While other retail venture capital funds have applied for and been granted orders allowing for the closure of redemptions for more than two years, securities regulators have advised Canadian Fund that they consider Canadian Fund's situation to be novel because of the financing arrangements put in place to support Canadian Fund's liquidity.

Ian Ross, Chairman of the Board responded, "While we are disappointed by the decision of the securities regulators to not extend the order, the Board of Directors will continue to pursue options aimed at serving the best interests of shareholders."

As a result of this decision by securities regulators, Canadian Fund must, under applicable securities laws, allow shareholders to request redemptions of their Class A Shares. However, under applicable corporate laws, Canadian Fund can process Class A Share redemption requests only if after doing so Canadian Fund would remain in a position to pay its liabilities as they become due. At present, the Board of Directors cannot conclude that Canadian Fund would meet this statutory test if Canadian Fund were to process anticipated redemption requests as received. As a result, Canadian Fund will not process redemption requests that are submitted until such time as the Board of Directors of Canadian Fund determines that Canadian Fund would meet this test. There can be no assurance as to when Canadian Fund will have sufficient cash available to process Class A Share redemptions.

Accordingly, Canadian Fund cannot process Class A Share redemption requests at this time and therefore redemption requests cannot be submitted electronically through FundServ. Redemption requests must be submitted manually using a Redemption Request Form provided by Canadian Fund's Manager. The Redemption Request Form will be available during the week of Monday, December 3, 2012 on GrowthWorks' website at www.growthworks.ca. Canadian Fund will issue a further announcement outlining the procedures for submitting redemption requests and the terms and conditions on which redemption requests will be processed. Further announcements will also be made at such time as the Board of Directors determines that Canadian Fund meets the statutory test for processing Class A Share redemptions. These announcements will be made in advance of any redemption dates that may be designated by the Board of Directors.

Canadian Fund's assets consist primarily of venture investments in private Canadian corporations in the technology, biotechnology and advanced manufacturing sectors. Canadian Fund's ability to generate cash is entirely dependent on levels of divestment activity in the venture portfolio, activity that is highly sensitive to market conditions. Canadian Fund continues to actively pursue divestments of portfolio assets which are determined to be in the best interests of Canadian Fund, as well as make selected follow-on investments. There can be no assurance as to the timing or value of these divestments or as to Canadian Fund's ability to discharge its payment obligations under the debt financing arrangements put in place to support Canadian Fund's liquidity. Details of the financing arrangements are set out in Canadian Fund's press releases of May 28, 2010 ("GrowthWorks Canadian Fund enters into a Participation Agreement with Roseway Capital") and May 23, 2012 ("GrowthWorks Canadian Fund Provides Update on Financing Arrangements"). A total of $33.5 million was advanced to Canadian Fund under the financing arrangements and approximately $11.7 million (including interest) is due to be paid on account of the financing arrangements on December 20, 2012, and a further $27.2 million (including interest and participation amounts) is due to be paid by May 28, 2013. Canadian Fund's payment obligations under these financing arrangements are secured by charges over Canadian Fund's portfolio assets and/or proceeds from the sale of those assets. If Canadian Fund were to default on its obligations under the financing arrangements, the security over Canadian Fund's assets may be enforced, which could result in forced divestments at values well below carrying values and a significant decline in Class A Share values.

The Board of Directors of Canadian Fund continues to review strategic options aimed at realizing the value potential that is believed to exist in Canadian Fund's venture investment portfolio and at providing liquidity for shareholders of Canadian Fund. These options are considered in light of a range of factors, including Canadian Fund's cash position, actual and projected levels of divestment activity, payment obligations under financing arrangements, other operating commitments and the prospects for generating divestment values in excess of carrying values.

Forward-Looking Statements: This press release contains forward-looking statements about Canadian Fund Class A Share redemptions, Canadian Fund's ability to make follow-on investments, to complete divestments from its venture investment portfolio and to make payments under financing arrangements. These statements are based on beliefs and assumptions of management of Canadian Fund at the time the statements are made, including beliefs and assumptions about Canadian Fund's ability to generate sufficient cash to satisfy its payment obligations under financing arrangements and to process Class A Share redemptions, future market conditions and future levels of divestment activity and Class A Share redemption requests. These beliefs and assumptions are subject to known and unknown risks and uncertainties, including risks and uncertainties associated with volatility of market conditions and, in turn, the climate for divestment activity, performance of portfolio companies, valuations of portfolio companies, the risk that Canadian Fund may not be able to generate sufficient net proceeds from the divestment of portfolio assets to satisfy its obligations under its outstanding secured indebtedness, financing needs of portfolio companies and the availability of capital to satisfy such financing needs and other risks and uncertainties disclosed in Canadian Fund's most recently filed prospectus and other regulatory filings posted on SEDAR at www.sedar.com. These risks and uncertainties may cause actual results, events or developments to be materially different from those expressed or implied by such forward-looking statements. Unless required by law, neither Canadian Fund nor its manager assumes any obligation to update any forward-looking statements, whether as a result of new information, future events or results or other factors.

Contacts:
GrowthWorks Canadian Fund Ltd.
David Levi
President and Chief Executive Officer
(416) 934-7700
Suite 2200, Exchange Tower
130 King Street West, Toronto, Ontario M5X 1E3

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
"At the keynote this morning we spoke about the value proposition of Nutanix, of having a DevOps culture and a mindset, and the business outcomes of achieving agility and scale, which everybody here is trying to accomplish," noted Mark Lavi, DevOps Solution Architect at Nutanix, in this SYS-CON.tv interview at @DevOpsSummit at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
"We're here to tell the world about our cloud-scale infrastructure that we have at Juniper combined with the world-class security that we put into the cloud," explained Lisa Guess, VP of Systems Engineering at Juniper Networks, in this SYS-CON.tv interview at 20th Cloud Expo, held June 6-8, 2017, at the Javits Center in New York City, NY.
As more and more companies are making the shift from on-premises to public cloud, the standard approach to DevOps is evolving. From encryption, compliance and regulations like GDPR, security in the cloud has become a hot topic. Many DevOps-focused companies have hired dedicated staff to fulfill these requirements, often creating further siloes, complexity and cost. This session aims to highlight existing DevOps cultural approaches, tooling and how security can be wrapped in every facet of the bu...
Historically, some banking activities such as trading have been relying heavily on analytics and cutting edge algorithmic tools. The coming of age of powerful data analytics solutions combined with the development of intelligent algorithms have created new opportunities for financial institutions. In his session at 20th Cloud Expo, Sebastien Meunier, Head of Digital for North America at Chappuis Halder & Co., discussed how these tools can be leveraged to develop a lasting competitive advantage ...
Docker containers have brought great opportunities to shorten the deployment process through continuous integration and the delivery of applications and microservices. This applies equally to enterprise data centers as well as the cloud. In his session at 20th Cloud Expo, Jari Kolehmainen, founder and CTO of Kontena, discussed solutions and benefits of a deeply integrated deployment pipeline using technologies such as container management platforms, Docker containers, and the drone.io Cl tool. H...
In his session at @ThingsExpo, Dr. Robert Cohen, an economist and senior fellow at the Economic Strategy Institute, presented the findings of a series of six detailed case studies of how large corporations are implementing IoT. The session explored how IoT has improved their economic performance, had major impacts on business models and resulted in impressive ROIs. The companies covered span manufacturing and services firms. He also explored servicification, how manufacturing firms shift from se...
Connecting to major cloud service providers is becoming central to doing business. But your cloud provider’s performance is only as good as your connectivity solution. Massive Networks will place you in the driver's seat by exposing how you can extend your LAN from any location to include any cloud platform through an advanced high-performance connection that is secure and dedicated to your business-critical data. In his session at 21st Cloud Expo, Paul Mako, CEO & CIO of Massive Networks, wil...
You know you need the cloud, but you’re hesitant to simply dump everything at Amazon since you know that not all workloads are suitable for cloud. You know that you want the kind of ease of use and scalability that you get with public cloud, but your applications are architected in a way that makes the public cloud a non-starter. You’re looking at private cloud solutions based on hyperconverged infrastructure, but you’re concerned with the limits inherent in those technologies.
The question before companies today is not whether to become intelligent, it’s a question of how and how fast. The key is to adopt and deploy an intelligent application strategy while simultaneously preparing to scale that intelligence. In her session at 21st Cloud Expo, Sangeeta Chakraborty, Chief Customer Officer at Ayasdi, will provide a tactical framework to become a truly intelligent enterprise, including how to identify the right applications for AI, how to build a Center of Excellence to ...
SYS-CON Events announced today that Massive Networks will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Massive Networks mission is simple. To help your business operate seamlessly with fast, reliable, and secure internet and network solutions. Improve your customer's experience with outstanding connections to your cloud.
DevOps is under attack because developers don’t want to mess with infrastructure. They will happily own their code into production, but want to use platforms instead of raw automation. That’s changing the landscape that we understand as DevOps with both architecture concepts (CloudNative) and process redefinition (SRE). Rob Hirschfeld’s recent work in Kubernetes operations has led to the conclusion that containers and related platforms have changed the way we should be thinking about DevOps and...
SYS-CON Events announced today that CAST Software will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct 31 - Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. CAST was founded more than 25 years ago to make the invisible visible. Built around the idea that even the best analytics on the market still leave blind spots for technical teams looking to deliver better software and prevent outages, CAST provides the software intelligence that matter ...
Given the popularity of the containers, further investment in the telco/cable industry is needed to transition existing VM-based solutions to containerized cloud native deployments. The networking architecture of the solution isolates the network traffic into different network planes (e.g., management, control, and media). This naturally makes support for multiple interfaces in container orchestration engines an indispensable requirement.
Everything run by electricity will eventually be connected to the Internet. Get ahead of the Internet of Things revolution and join Akvelon expert and IoT industry leader, Sergey Grebnov, in his session at @ThingsExpo, for an educational dive into the world of managing your home, workplace and all the devices they contain with the power of machine-based AI and intelligent Bot services for a completely streamlined experience.
Because IoT devices are deployed in mission-critical environments more than ever before, it’s increasingly imperative they be truly smart. IoT sensors simply stockpiling data isn’t useful. IoT must be artificially and naturally intelligent in order to provide more value In his session at @ThingsExpo, John Crupi, Vice President and Engineering System Architect at Greenwave Systems, will discuss how IoT artificial intelligence (AI) can be carried out via edge analytics and machine learning techn...