TORONTO, June 10 /CNW/ - In a previous release on June 4, 2009, the
Citadel Group of Funds announced that a subsidiary of CH Fund Administration
LP has become the administrator (the "Administrator") of each of the Citadel
Funds, other than CGF Mutual Funds Corporation, effective June 3, 2009.
CH Fund Administration LP is an affiliate of Crown Hill Fund (the
"Trust"), a closed-end fund listed on the Toronto Stock Exchange (TSX: MYT.UN)
and is managed by Crown Hill Capital Corporation (the "Manager"). The
Administrator and the Manager are considering alternatives for maximizing
value for securityholders of Crown Hill Fund and the Citadel Group of Funds.
These alternatives include merging certain of the Citadel Funds with the
Trust, expected to take place over the course of the next 18 months. The Trust
is holding a special meeting of its unitholders on June 29, 2009 to consider
and approve the first steps of this reorganization.
The Administrator believes the merger of the Citadel Funds with the Trust
will result in benefits to the unitholders of the Citadel Funds including
lower general and administrative costs per unit and enhanced liquidity.
The merger of the Citadel Funds with the Trust will be completed in
accordance with the declarations of trust of the Citadel Funds and in full
compliance with all applicable securities regulations, subject to regulatory
approval. The Administrator intends to file notice of the mergers with the
Toronto Stock Exchange. Any such merger must be in the best interests of the
securityholders of each of the merging funds. The mergers will also have to be
reviewed by the independent review committee of each of the funds.
Certain of the Citadel Funds require securityholder approval prior to any
such merger and these requirements will be met. These funds are Citadel Stable
S-1 Income Fund (TSX: CSR.UN), Sustainable Production Energy Trust (TSX:
SPU.UN) and Financial Preferred Securities Corporation (TSX: FPR.PR.A).
The remaining Citadel Funds, with the exception of the CGF Mutual Funds
Corporation and the CGF Resource 2008 Flow-Through LP, may be merged with the
Trust over time in accordance with provisions of their respective declarations
of trust, which allow for mergers with affiliated funds.
Until such time as the mergers are completed, the business and affairs of
the Citadel Funds are expected to remain unchanged, including the management
of the portfolios of the respective funds by the current investment managers.
The Administrator has a number of policies in place with respect to
utilizing the "permitted merger" provisions in a declaration of trust.
These policies include:
1) The Administrator will give at least 21 days notice that a merger
will take effect.
2) A special redemption privilege will be made available to the
terminating fund unitholders. The redemption paid will be the Net
Asset Value (the "NAV") per unit less a administrative offset charge
that is not to exceed 5% of the NAV. The charge will be payable to
the continuing fund.
3) Unitholders will have at least 10 business days to tender their units
for the special redemption privilege.
To put the special redemption privilege and the administrative offset
charge into context, it is noted that Citadel SMaRT Fund has a quarterly
redemption privilege at NAV less a $0.80 per unit with its NAV currently at
$22.64 per unit. Citadel Premium Income Fund has an annual redemption at NAV
less a number of charges including a $0.20 per unit administrative offset
charge. Its current NAV is $6.08 per unit. Citadel S-1 Income Trust Fund,
Citadel Hytes Fund, Citadel Diversified Investment Trust and Series S-1 Income
Fund do not have annual redemption privileges.
Although the declarations of trust for each of the Energy Plus Income
Trust (TSX: EPF.UN) and Equal Weight Plus Fund (TSX: EQW.UN) contain permitted
merger provisions, the administrative offset charge may not apply depending on
the timing of the mergers.
As previously announced, the special meetings of unitholders of Citadel
S-1 Income Trust Fund, Series S-1 Income Fund and Citadel Stable S-1 Income
Fund, originally to be held on June 5, 2009 were adjourned without the conduct
of business. In light of the proposed mergers with the Crown Hill Fund, the
Administrator has decided not to proceed with special business proposed for
the special meetings and the meetings are canceled.
For further information:
For further information: Citadel Group of Funds at 1-877-261-9674