TORONTO, Oct. 5, 2015 /CNW/ - Marret Resource Corp. (TSX: MAR) (the "Company") announced that effective as of the close of business on Thursday, October 15, 2015 (the "Record Date"), the Company will redeem an aggregate of 9,052,797.27 common shares on a pro rata basis for aggregate redemption proceeds of $17,632,133.24 (the "Second Redemption"). The common shares (or fractions thereof) which remain outstanding following the Second Redemption will be automatically split on a basis such that the number of common shares outstanding after such stock split is equal to the number of common shares outstanding immediately preceding the Second Redemption (the "Stock Split").
The net effect of the Second Redemption and Stock Split on the number of outstanding common shares will be nil, and the number of common shares held by each shareholder on the Record Date will remain unchanged. The Second Redemption and Stock Split will have the effect of distributing $0.9960 per common share outstanding on the Record Date (the "Distribution"), which will be payable to shareholders on October 30, 2015 (the "Payment Date"). The net asset value per common share as at September 30, 2015 was $1.9477 with 17,702,767 common shares outstanding.
The common shares will commence trading on a "due bill" basis at the opening of business on Tuesday, October 13, 2015 (two trading days prior to the Record Date) until the Payment Date, inclusively. Accordingly, ex-Distribution trading in the common shares will commence on the Toronto Stock Exchange at the opening of business on Monday, November 2, 2015 (the "Ex-Distribution Date"). The due bill redemption date will be November 4, 2015 (the second trading day following the Ex-Distribution Date).
For clarification, "due bills" will represent the Distribution that shareholders will be entitled to receive. The due bills will be deemed to be attached to the Company's common shares two trading days prior to the Record Date, and will continue to be attached to the common shares until the end of the Payment Date. Accordingly, the Company's common shares will trade on a "due bill" basis from October 13, 2015 until close of trading on October 30, 2015 (the "Due Bill Period"). This means that persons who sell their common shares during the Due Bill Period shall also sell their entitlement to the Distribution to the purchasers of common shares. The Company's common shares will commence trading on an ex-distribution basis (i.e. without an attached "due bill" entitlement to the Second Redemption) from the opening of trading on November 2, 2015 (i.e. the next trading day after the Payment Date). The due bills will be redeemed on November 4, 2015 once all trades with attached due bills entered during the Due Bill Period have settled.
The material Canadian federal income tax implications of the Second Redemption and Stock Split, including the earlier redemption which took place on July 31, 2015 (the "First Redemption", together with the Second Redemption referred to as the "Redemptions", or individually referred to as a "Redemption"), are summarized in the Company's management information circular dated May 20, 2015 (the "Circular") sent to shareholders in connection with the annual and special meeting dated June 29, 2015 and which is available on SEDAR at www.sedar.com. Subject to the qualifications set out in the Circular, it is not expected that a shareholder will be deemed to receive a taxable dividend as a result of the Redemptions and a shareholder should receive the Redemptions as a return of capital. The amount paid by the Company on a Redemption (less the amount of a deemed dividend, if any, realized on that Redemption) will be the proceeds of disposition of the shareholder's common shares so redeemed for purposes of computing the capital gain or capital loss of the shareholder. No gain or loss will be realized by a shareholder as a result of the stock split following the Redemptions. Generally, the aggregate adjusted cost base to a shareholder will not be affected by a share split. Shareholders should consult their own tax advisors about the specific income tax considerations applicable to them having regard to their particular circumstances.
For income tax purposes, the Second Redemption will have the effect of redeeming 0.511378 of each common share outstanding on the close of business on the Record Date on a pro rata basis, and the redemption amount per whole common share so redeemed will be $1.9477.
Following the Second Redemption, the Company anticipates that it will retain approximately $8,000,000 in cash and securities (the "Reserve Amount") and its investment in Cline Mining Corp. ("Cline"), currently valued at $8.8 million, for a total of approximately $16.8 million in assets. These values are based on the current value of the Company's portfolio which is subject to change. The Reserve Amount is being maintained to enable the Company to continue its business, to manage the liquidation of the Cline investment and to maximize the value of the Company's structure. The Reserve Amount will be invested in accordance with the investment policy approved by the Company's board of directors (the "Board") from time to time. It is the current intention of the Board that the Reserve Amount be invested in the debt and equity of natural resource companies. No further investments in private or illiquid securities are currently contemplated. The Board reserves the right to revisit and amend the investment policy as market conditions warrant.
About Marret Resource Corp.
Marret Resource Corp. is focused on natural resource lending. The Company's business is primarily directed to investing in public and private debt securities of and making term loans (including bridge and mezzanine debt) to issuers in a broad range of natural resource sectors, including energy, base and precious metals and other commodities, and issuers involved in exploration and development, and may also include financing other resource-related businesses The Company seeks to generate income mainly from its lending activities, while taking advantage of additional upside through equity participation in the companies which it finances. Marret Asset Management Inc. is the Company's investment manager and is responsible for implementing Marret Resource Corp.'s investment strategy and managing its investment portfolio.
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 Marret Resource Corp. (the "Company") 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 Company believes that the expectations reflected in forward-looking statements are based upon reasonable assumptions; however, the Company 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, including the matters discussed under "Risks Factors" in the prospectus or annual information form for the Company, and matters disclosed in the Company's management information circular dated May 20, 2015. 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 Company 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 Marret Resource Corp.
For further information: about Marret Resource Corp. and its ongoing business, please contact: Marret Investor Services 416.214.5800