CRT.UN & ENI.UN
TORONTO, Feb. 15, 2012 /CNW/ - Crown Hill Capital Corporation ("Crown
Hill"), the administrative agent of Citadel SMaRT Fund (TSX: CRT.UN)
(the "Smart Fund") and the manager of Energy Income Fund (TSX: ENI.UN)
(the "Energy Fund", and together with the Smart Fund, the "Funds") is
pleased to announce that, subject to regulatory and other approvals,
Smart Fund will merge (the "Merger") into Energy Fund on March 23, 2012
(the "Effective Date"). The Merger will be effected in accordance with
the "permitted merger" provisions set out in Smart Fund's declaration
of trust made as of July 19, 2001 and amended and restated as of
October 12, 2005.
The Merger will be effected using an exchange ratio calculated as the
net asset value per unit of Citadel SMaRT Fund divided by the net asset
value per unit of Energy Income Fund, each determined as at the close
of trading on the Toronto Stock Exchange ("TSX") on the business day
immediately prior to the Effective Date (the "Exchange Ratio").
The TSX requires unitholder approval for the Merger, unless an exemption
is applicable, as a condition of acceptance of the transaction since
the units of Energy Income Fund issuable pursuant to the Merger would
represent greater than 25% of the outstanding units of Energy Income
Fund. The rules of the TSX contain an exemption from the requirement
to obtain unitholder approval if the Independent Review Committees of
both the continuing fund and terminating fund have approved the
transaction, the manager of the continuing fund has determined that the
acquisition is consistent its investment objectives and the number of
securities issued or made issuable by the continuing fund is less than
100% of the number of securities of the continuing fund issued and
outstanding on a non-diluted basis.
The Independent Review Committees of the Smart Fund and the Energy Fund
have approved the Merger and Crown Hill, in its capacity as manager of
the Energy Fund, has determined that the Merger is consistent with the
investment objectives of the Energy Fund.
ENI currently has 8,287,520 units issued and outstanding. ENI expects
to issue approximately 3,829,821 additional units pursuant to the
acquisition representing approximately 46% of the number of ENI units
currently issued and outstanding (or approximately 33% of ENI units on
a fully diluted basis).
Investors in Smart Fund will not experience any change in the total
management and advisory fees paid as a result of the Merger. The Funds
will bear none of the costs and expenses of the Merger.
Prior to the Merger, Smart Fund will provide unitholders who do not wish
to become unitholders of Energy Fund with a redemption right ("Cash
Alternative") to have their units redeemed for an amount in cash equal
to 100% of the net asset value per unit determined on the close of
business on March 22, 2012 (the "Redemption Date"). In order to
receive the Cash Alternative, unitholders of Smart Fund must ensure
that their request for redemption of units is received by no later than
the close of business on March 15, 2012. Please note that if you
exercise the right to receive the Cash Alternative you are not obliged
to exercise such right in respect of all units that you own.
Payment in respect of the Cash Alternative will be made as soon as
practically possible and in any event no later than March 28, 2012.
Unitholders of Smart Fund who do not exercise the right to receive the
Cash Alternative will receive units of Energy Fund in exchange for
their units of Smart Fund.
Crown Hill will issue a press release on March 22, 2012 setting out the
exact Exchange Ratio.
Crown Hill believes that the Merger, which is expected to be implemented
on a taxable basis will provide investors with enhanced liquidity and a
lower management expense ratio. In addition, the Manager believes that
the investment strategy and restrictions in Energy Fund are more
appropriate in the current environment and are more robust for dealing
with future changes than that of Smart Fund and that the investment
advisor for the Energy Fund has more experience investing in the energy
Certain statements contained in this press release may include
forward-looking information with respect to the Fund's operations and
future financial results. Such statements are based on current
expectations, are subject to a number of uncertainties and risks, and
actual results may differ materially from those contained in such
statements. Further information can be found in the disclosure
documents filed by the Fund at www.sedar.com.
SOURCE Citadel SMaRT Fund
For further information:
Investor Relations department at 416.361.9673 or toll-free at 1.877.261.9674.