TORONTO, June 19, 2014 /CNW/ - Propel Capital Corporation (the "Manager"), as manager of Diversified Alpha Fund II (TSX: AFT.UN) (the "Fund") confirmed today the intention to terminate the Fund (the "Termination") as scheduled on June 29, 2014 (the "Termination Date"), as was previously announced on May 29, 2014. This press release fulfills the Manager's and the Trust's notice requirement to unitholders of the Fund in accordance with the provisions of the Fund's declaration of trust.
After all liabilities of the Fund have been satisfied or provided for, the net assets of the Fund will be distributed to unitholders of record on the Termination Date. The distribution is expected to take place in stages. The Fund currently has exposure to three illiquid assets (the "Illiquid Assets"), which accounted for 8.4% of the Fund as at June 18, 2014. The Fund will make a distribution from the liquid portion of the portfolio (the "Liquid Portfolio") of $7.38 on July 11, 2014 and will distribute the net proceeds from the Illiquid Assets (net of any expenses associated with its disposal) along with any remaining cash, when proceeds are received by the Fund.
The Fund will continue until such time as the Illiquid Assets are sold. The Fund does not expect to maintain the listing of the units on the Toronto Stock Exchange (the "TSX") after the scheduled Termination Date. No ongoing management or other fees will be charged by Propel Capital for overseeing the liquidation of the Illiquid Assets and the winding up of the Fund.
Unitholders who hold their units within a registered plan will not be subject to tax on the distribution payment. The Fund anticipates that the distribution payment received by unitholders will be received as a return of capital. The exact tax treatment will depend on each unitholder's circumstances. If the Fund no longer qualifies as a "mutual fund trust" within the meaning of the Income Tax Act (Canada) and the units are no longer listed on the TSX, the tax considerations for holders of registered plans would in some respects be materially and adversely different. All unitholders should consult with their own tax advisors regarding the Termination and distribution payment(s).
This press release contains forward-looking statements and information within the meaning of applicable securities legislation. Forward-looking statements can be identified by the expressions "seeks", "expects", "believes", "estimates", "will", "target" and similar expressions. The forward-looking statements are not historical facts but reflect the current expectations of the Manager and the portfolio managers of the underlying portfolios regarding future results or events and are based on information currently available to them. Certain material factors and assumptions were applied in providing these forward-looking statements. All forward-looking statements in this press release are qualified by these cautionary statements. The Manager believes that the expectations reflected in forward-looking statements are based upon reasonable assumptions; however, the Manager can give no assurance that the actual results or developments will be realized. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations. Readers, therefore, should not place undue reliance on any such forward-looking statements. Further, a forward-looking statement speaks only as of the date on which such statement is made. The Manager undertakes no obligation to publicly update any such statement or to reflect new information or the occurrence of future events or circumstances except as required by securities laws. These forward-looking statements are made as of the date of this press release.
SOURCE: Propel Capital Corporation
For further information: Krista Matheson, Senior Vice President, Propel Capital at 416-572-2431 or visit www.propelcapital.ca