|By Marketwired .||
|August 9, 2013 11:21 AM EDT||
OAKVILLE, ONTARIO -- (Marketwired) -- 08/09/13 -- Harvest Portfolios Group Inc. (the "Manager") announced today a proposal to merge (the "Sustainable Income Merger") the Harvest Sustainable Income Fund (the "Sustainable Income Fund") with the Harvest Canadian Income & Growth Fund (the "Continuing Fund") on a tax-deferred basis, effective November 6, 2013 (the "Effective Date"). Upon implementation of the Sustainable Income Merger on the Effective Date, the Sustainable Income Fund will terminate.
The Manager is also announcing that as per its prospectus, the conversion of the Canadian Premium Select Income Fund (TSX:HCS.UN) (the "CAPS Fund", and together with the Sustainable Income Fund and the Continuing Fund, the "Funds") into an open-ended mutual fund, will be implemented on November 22, 2013 (the "Conversion Date"). The conversion will be implemented by way of a tax-deferred merger (the "CAPS Merger" and together with the Sustainable Income Merger, the "Mergers") with the Continuing Fund. Upon implementation of the CAPS Merger on the Conversion Date, the CAPS Fund will terminate.
The independent review committee of the Funds has provided its decision that in its opinion the Mergers provide a fair and reasonable result for each of the Funds. The Manager expects that the implementation of the Mergers will form a larger, open-ended mutual fund that is expected to result in a lower management expense ratio, economies of scale and cost synergies for the unitholders of the Funds.
The Sustainable Income Merger
The Sustainable Income Fund and the Continuing Fund have the same portfolio manager, substantially similar investment objectives and strategies, fee structures and valuation procedures.
No unitholder or regulatory approval is required for the Sustainable Income Merger. However, unitholders of the Sustainable Income Fund will be sent a written notice 60 days before the Effective Date notifying them of the Sustainable Income Merger. Unitholders of the Sustainable Income Fund may surrender their units for redemption up to the close of business on November 5, 2013, the business day before the Sustainable Income Merger.
The CAPS Merger
The CAPS Merger is subject to regulatory approval and approval of unitholders of the CAPS Fund (the "CAPS Unitholders"). A special meeting of the CAPS Unitholders will be held on October 18, 2013 (the "Meeting"). At the Meeting, the CAPS Unitholders will be asked to approve the CAPS Merger and any necessary matters relating to the CAPS Merger that require approval of the CAPS Unitholders, including changes in the fundamental investment objectives and fee structure of the CAPS Fund.
The CAPS Unitholders should note the following in relation to the CAPS Merger:
-- The investment objectives of the CAPS Fund will change to that of the Continuing Fund; -- On the Conversion Date, the CAPS Unitholders will receive, on a tax- deferred basis, Class R units of the Continuing Fund; -- The management fee of the Class R units of the Continuing Fund is 1.25% which is 0.25% greater than the management fee would have been had the CAPS Fund effected an automatic conversion into an open-ended mutual fund; -- The portfolio manager of the CAPS Fund will change upon implementation of the Merger from Highstreet Asset Management Inc. to Avenue Investment Management Inc., the portfolio manager of the Continuing Fund; -- CAPS Unitholders may choose, prior to the CAPS Merger, to surrender their units for redemption between October 1, 2013 and 5:00 p.m. (Toronto time) on October 17, 2013. Any units of the CAPS Fund surrendered for redemption during this period will be redeemed at a redemption price per unit of the CAPS Fund equal to the net asset value per unit as at October 25, 2013, and the CAPS Unitholder will receive payment within seven business days following October 25, 2013; and -- Following the CAPS Merger, unitholders of the merged fund will be able to redeem their units at the daily net asset value.
The CAPS Unitholders of record on September 16, 2013 will be entitled to receive notice of and vote at the Meeting. They will also receive the management information circular (the "Circular") which will include the details about the CAPS Merger, including the differences between the CAPS Fund and the Continuing Fund. The Circular is expected to be mailed on or about September 19, 2013. The Circular will also be available on www.sedar.com and posted on the Manager's website. Unitholders are encouraged to read the Circular in its entirety and consult with their investment advisors regarding the CAPS Merger. Subject to receipt of applicable approvals, units of the CAPS Fund will be delisted from the TSX prior to the Conversion Date.
For more information on the Mergers and the funds managed by Harvest Portfolios Group Inc., please visit our website at www.harvestportfolios.com.
Certain statements included in this news release constitute forward-looking statements, including, but not limited to, those identified by the expressions "expect", "intend", "will" and similar expressions to the extent they relate to the Fund. The forward-looking statements are not historical facts but reflect the Fund's and the Manager's, current expectations regarding future results or events. 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, but not limited to, market factors. Although the Fund and the Manager believe that the assumptions inherent in the forward-looking statements are reasonable, forward-looking statements are not guarantees of future performance and, accordingly, readers are cautioned not to place undue reliance on such statements due to the inherent uncertainty therein. The Fund and the Manager undertake no obligation to update publicly or otherwise revise any forward-looking statement or information whether as a result of new information, future events or other such factors which affect this information, except as required by law.