/THIS PRESS RELEASE IS INTENDED FOR DISTRIBUTION IN CANADA ONLY./
Toronto Stock Exchange Symbol: COF
TORONTO, Aug. 11 /CNW/ - Coventree Inc. (TSX: COF) ("Coventree" or the
"Company") today announced its financial results for the three and nine months
ended June 30, 2009. All amounts are reported in Canadian dollars.
Coventree's net income for the three and nine months ended June 30, 2009
was $0.7 million and $1.4 million, respectively, compared to net income of
$0.4 million and $9.4 million for the same periods in the previous year.
Total revenue for the three and nine months ended June 30, 2009 of $3.8
million and $13.3 million decreased by $1.1 million and $20.3 million,
respectively, compared to the same periods in the prior year. Revenue from the
Coventree-sponsored asset-backed commercial paper ("ABCP") conduits, including
revenue from both credit arbitrage transactions and traditional asset
securitization transactions, ceased as of the closing of the restructuring of
the market-disrupted Canadian third party ABCP on January 21, 2009 although,
prior to that date, there was virtually no revenue from credit arbitrage
transactions during the three and nine months ended June 30, 2009. Revenue for
the three months ended June 30, 2009 consisted primarily of fees, net of
payments to subcontractors, totalling $3.4 million earned under the Transition
Services Agreement (as defined below).
Operating expenses for the three and nine months ended June 30, 2009 were
$3.3 million and $11.4 million, respectively, which represent a decrease of
$0.6 million and $3.7 million, respectively, compared to the same periods in
the previous year. Most of the decrease is the result of a reduction in
compensation and benefits expenses due to having fewer employees. Expenses for
the three and nine months ended June 30, 2009 included $0.5 million and $2.9
million, respectively, in costs associated with the Special Committee formed
to oversee the Company's response to the investigation by the Ontario
Securities Commission (the "OSC").
The Company's Management Discussion & Analysis and unaudited consolidated
financial statements for the three and nine months ended June 30, 2009 will be
available under the "Coventree Owners" section of the Company's website at
www.coventree.ca and on SEDAR at www.sedar.com.
Consistent with its previous announcements, the Company has continued to
implement an orderly wind down of its operations. Following the expiry on May
21, 2009 of the agreement (the "Transition Services Agreement") to provide
certain transitional administrative services to the new special purpose
vehicles that acquired the assets formerly held by the Coventree-sponsored
conduits, the Company reduced its workforce to four employees. There can be no
assurance regarding when a formal winding up of the Company or a subsequent
distribution of funds to shareholders will occur, how long such process will
take or what funds will remain to be distributed to shareholders at such time.
A number of factors, some of which are beyond the Company's control, could
affect the timing of a formal winding up or the amount of funds available for
distribution. For example, Coventree has agreed that it would not make or pay
any dividend or other distribution to its shareholders generally without
having given at least 45 days' prior written notice to the OSC.
The Company has previously disclosed that it and four of its current and
former officers had received enforcement notices from OSC staff. These notices
identified the disclosure issues that were the subject of the OSC's
investigation, and indicated that OSC staff is contemplating commencing
proceedings in relation to those issues. The enforcement notices afforded the
Company and individuals an opportunity to make representations before a
decision is taken by the OSC staff to commence proceedings. Coventree has
advised the OSC that it does not plan to make any representations to OSC staff
in response to the enforcement notices.
This press release includes certain forward-looking statements relating
to the Company's expectations to implement an orderly wind down of its
operations and to reduce its workforce. These statements can be identified by
the expressions "expects" and "will". These forward-looking statements are not
historical facts but reflect Coventree's current expectations regarding future
events based on information currently available to Coventree.
These forward-looking statements are subject to a number of known and
unknown risks, uncertainties and assumptions which may be substantial. Many
factors could cause actual results or events to differ materially from current
expectations that may be expressed or implied by such forward-looking
statements, including, without limitation, the various matters discussed under
"Risks and Uncertainties" contained on pages 15 to 16 of the Company's
Management Discussion and Analysis for the three and nine months ended June
30, 2009 which is available under the Company's profile on SEDAR at
www.sedar.com. Should one or more of these risks or uncertainties materialize,
or should assumptions underlying the forward-looking statements prove
incorrect, the Company may not be able to complete an orderly wind down of its
operations in the near future or at all, and may not reduce its workforce.
These factors should be considered carefully and prospective investors should
not place undue reliance on the forward-looking statements. These
forward-looking statements are made as of the date of this press release and
Coventree does not intend, and does not assume any obligation, to update or
revise these forward-looking statements, except as required by law.
For further information:
For further information: Craig Armitage, The Equicom Group Inc., Tel:
(416) 815-0700 x278, Email: firstname.lastname@example.org