TORONTO, April 18, 2019 /CNW/ - B.E.S.T. Total Return Fund Inc. (the "Fund") today announced that it has entered into an asset purchase agreement with Mr. John M.A. Richardson (the "Purchaser") for the sale by the Fund to the Purchaser of the securities of certain private entities held by the Fund (the "Private Assets") for $2,681,000 (the "Private Asset Sale"). The Private Assets form approximately 62% of the Fund's total assets. The Purchaser currently holds 100% of the Class C Shares of the Fund, which Class C Shares constitute 86% of the issued and outstanding shares of the Fund.
B.E.S.T. Investment Counsel Limited, in its capacity as the manager of the Fund (the "Manager"), has determined that, due to the reduced size of the Fund and the inability of the Fund to raise additional capital, it is in the best interest of the Fund to terminate the business of the Fund by way of a distribution to holders of Class A Shares and Class C Shares of all or substantially all of the assets of the Fund.
In connection therewith, pending shareholder approval, the Fund intends to redeem all Class A Shares for cash at a price per share equal to the net asset value per share. The Manager has further determined it is in the best interest of the Fund and its shareholders to complete the one-time sale of certain assets held by the Fund, including the Private Assets.
The Private Assets cannot be distributed on a pro rata basis to shareholders of the Fund because such shareholders may not all qualify as accredited investors and, as private issuers, the constating documents of many issuers of the Private Assets restrict the number of shareholders they can have. Further, the Manager has determined that increased costs associated with an alternative sale process will negatively impact the net asset value of the Fund and there is no assurance that such a process will result in any sale or a sale of the Private Assets at a sale price that is higher than the price to be obtained under the Private Asset Sale. Based on a number of discussions with potential purchasers of the Private Assets, the Manager has determined that other potential purchasers would seek to purchase the Private Assets at a significant discount to their current carrying value, if at all.
To ensure the fairness of the Private Asset Sale, the Fund retained an independent national accounting firm experienced in the valuing of private assets, BDO Canada LLP, to determine the fair value of the Private Assets. Further, the Independent Review Committee of the Fund reviewed and approved the proposed Private Asset Sale from a conflict of interest perspective, in accordance with National Instrument 81-107 – Independent Review Committee for Investment Funds.
For further information, please review the forthcoming management information circular of the Fund.
About B.E.S.T. Total Return Fund Inc.
B.E.S.T. Total Return Fund Inc. is a labour sponsored investment fund corporation established in 2003. It specializes in generating interest and dividend income as well as long-term capital appreciation through investments in a diversified portfolio of small and medium-sized private and public companies which qualify as eligible investments. The Fund invests in securities such as convertible debentures and mezzanine debt as well as equity securities such as common shares and preferred shares of eligible businesses that, in the Fund's opinion, have the greatest potential to achieve the Fund's objectives.
About Mr. John M.A. Richardson
John M.A. Richardson is the Chief Executive Officer of the Fund and is also the founder, President and a director of the Manager. Currently, he serves as a director on a number of private company boards. He is a Chartered Accountant, Chartered Professional Accountant, Chartered Business Valuator and holds a Master of Business Administration degree from the State University of New York.
SOURCE B.E.S.T. Total Return Fund Inc.
For further information: concerning this news release, please contact: For media enquiries only: The registered office of BEST is 181 Bay Street, Suite 810, Toronto, Ontario M5J 2T3. BEST can be contacted by telephone at 416-203-7331 or (toll free) 1-800-795-BEST (2378) or by email at [email protected] Further information about BEST may be found on its website at http://bestfunds.ca.