TORONTO, Dec. 30 /CNW/ - The Northwater Top 75 Income Trusts PLUS (the "Trust") today announces that it has entered into an agreement of purchase and sale pursuant to which all of the shares of Enhancement Fund Limited (the "Fund") previously held by the Trust have been transferred to a private multi-strategy alternative investment fund. Upon completion of the transaction, the December 31, 2009 projected net asset value per unit of the Trust, after taking into account the $1.00 initial termination distribution previously declared to unitholders of record as of December 31, 2009, will be $1.13 subject to fluctuations in the US dollar foreign exchange rate and other changes that may affect the net asset value of the Trust. Upon receipt of the proceeds from the sale of the Fund, the Trust will determine the final termination payment payable to unitholders of the Trust as soon as practicable and proceed with the termination of the Trust in due course.
As has been previously announced, Northwater Fund Management Inc. (the "Manager"), the Manager of the Trust, has been actively seeking alternative means of affecting the monetization of the underlying hedge fund portfolio held by the Fund. The Manager believes that this transaction is in the best interests of unitholders as it will allow the Trust to significantly shorten the projected timeline for payment of the final termination distribution to unitholders of the Trust while at the same time seeking to maximize value to unitholders through the auction process run by an arm's length third party described in more detail below. The transaction will also prevent the Trust and the Fund from incurring ongoing fixed expenses that have become more material to the operation of the Trust as the Trust's size has become smaller in anticipation of the proposed wind-up of the Trust.
In an effort to maximize value, the Manager engaged the services of Duff & Phelps Securities, LLC ("Duff & Phelps") in New York to manage an auction process to obtain the best possible bid for the Fund. Duff & Phelps was selected based on its experience in running secondary market auction transactions in the hedge fund industry as well as its competitive pricing model.
Duff & Phelps approached over 100 potential purchasers of the Fund and the Manager entered into 21 non-disclosure agreements with those parties who expressed interest in obtaining access to the virtual data room set up by the Manager. During the due diligence period, potential purchasers who had signed non-disclosure agreements were invited to review and research the underlying hedge fund positions held by the Fund and other Fund documents. Formal written bids were then submitted by six of the interested parties.
The Manager immediately dismissed certain of the bids as being opportunistic and not worthy of further consideration. However, the Manager engaged two of the parties that had submitted the most reasonable bids in further discussion on behalf of the Trust and ultimately one of the bids clearly differentiated itself as the most attractive.
The Manager is confident that the process utilized to generate bids and the wide range of potential purchasers that were asked to participate in the auction process has yielded the highest possible value for the remaining illiquid assets held in the Fund's portfolio.
Further details regarding the amount and timing of the final termination distribution will be provided to unitholders as soon as such information becomes available.
SOURCE NORTHWATER TOP 75 INCOME TRUSTS PLUS
For further information: For further information: Daniel Mills at Northwater Capital Management Inc. at (416) 360-2101