TORONTO, Dec. 14, 2015 /CNW/ - GrowthWorks Canadian Fund Ltd. (the "Fund") today announced that it has terminated the investment advisor agreement (the "Roseway IAA") between Roseway Capital S.a.r.l. ("Roseway") and the Fund effective as of December 9, 2015 and has entered into an investment advisor agreement (the "Investment Advisor Agreement") with Crimson Capital Inc. ("Crimson Capital") in connection with the management of the Fund's venture portfolio. Crimson Capital has provided investment management and other services to the Fund since May 2014 in its capacity as a sub-contractor to Roseway under the Roseway IAA. The Fund also announced that it has obtained orders of the Ontario Superior Court of Justice (the "Court") approving the Investment Advisor Agreement and further extending the "Stay Period" until and including June 30, 2016 pursuant to the Fund's proceedings under the Companies' Creditors Arrangement Act (Canada).
Investment Advisor Agreement
Under the terms of the Investment Advisor Agreement, Crimson Capital will serve as investment advisor to the Fund and provide investment and divestment recommendations to the Fund's Board of Directors in respect of the Fund's venture portfolio and related services for a term ending on December 31, 2017. The principal of Crimson Capital is Donna Parr. Ms. Parr has over 30 years of experience in venture and private equity, investing and fund raising and corporate finance. As compensation for providing those services to the Fund, Crimson Capital will be entitled to receive an annual base fee plus reimbursement of certain expenses. In addition to the annual base fee, Crimson Capital will also be entitled to receive an incentive fee equal to a percentage of the aggregate net proceeds of disposition of portfolio investments realized by the Fund. Both the annual fee and the incentive fee will decrease in the second year of the Investment Advisor Agreement.
The Investment Advisor Agreement may, in certain circumstances, be terminated by the Fund or Crimson Capital prior to the end of the term of the agreement, including by either party in the event of a material breach of the agreement which remains uncured. Except in the event of a termination of the Investment Advisor Agreement by the Fund in certain circumstances, including as a result of a material breach of the agreement by the Investment Advisor which remains uncured, upon termination of the agreement, Crimson Capital will be entitled to receive an additional fee equal to a percentage of the aggregate net proceeds of disposition of portfolio investments in excess of $20,000,000 realized by the Fund in respect of the period commencing on the effective date of the agreement and ending on the four month anniversary (or six month anniversary, in certain circumstances) following such termination. In the event the Investment Advisor Agreement is terminated as a result of a material breach of the Fund which remains uncured or is terminated by the Fund for convenience, Crimson Capital will be also be entitled to receive an incentive fee equal to a percentage of the aggregate net proceeds of disposition of portfolio investments realized by the Fund in respect of dispositions completed during the six month period following such termination.
Extension of the Stay Period
The extension of the "Stay Period" until and including June 30, 2016 continues and extends the stay of proceedings, which has stayed certain creditor claims and the exercise of contractual rights against the Fund.
The Fund intends to pursue an orderly disposition of its assets with a view to satisfying its payment obligations to the Fund's creditors, following which the Fund's board of directors expects to consider alternatives reasonably available to the Fund at that time, including a distribution to the Fund's shareholders of any remaining assets of the Fund.
This press release contains forward looking statements, including statements with respect to the Fund's proceedings under the Companies' Creditors Arrangement Act (Canada). These forward-looking statements reflect the Fund's current views and are based on certain assumptions, including, but not limited to, assumptions as to future operating conditions and courses of action, general economic and market conditions and other factors the Fund believes are appropriate. Such forward looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those contained in these statements, including, but not limited to, the risk that dispositions of the Fund's portfolio investments, together with the Fund's cash resources, will not yield proceeds sufficient to satisfy in full claims of the Fund's creditors or any distribution to the Fund's shareholders; the risk that litigation proceedings involving claims by the former manager of the Fund or other third parties against the Fund may involve substantial expense and, if successful, could require the Fund to pay substantial damages, thereby reducing or depleting entirely the Fund's liquidity and capital resources; and those risks and uncertainties disclosed in the Fund's most recently filed prospectus and other regulatory filings posted on SEDAR at www.sedar.com. These risks and uncertainties may cause actual results, events or developments to be materially different from those expressed or implied by such forward-looking statements. Unless required by law, the Fund does not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or results or other factors.
FTI Consulting Canada Inc., the Court Appointed Monitor of GrowthWorks Canadian Fund, has established the following website containing information concerning the CCAA proceedings: http://cfcanada.fticonsulting.com/gcfl/
SOURCE GrowthWorks Canadian Fund Ltd.
For further information: You may also contact the Monitor at: Hotline: 1-855-431-3185, Email: [email protected]