TORONTO: CAPVEST Income Corp. (the “Company”) announces that it is proposing a change to the Company’s investment objectives and a consolidation of its common shares.
Change of investment mandate: The Board of Directors of the Company is seeking shareholder approval to change the Company’s investment objectives from focusing on commodity futures contracts reflecting the RICI Portfolio* and commodity related income and royalty funds to focus on investing, directly or indirectly, in a diversified group of infrastructure and energy companies. The Company intends to target an annual yield of approximately 6%, paid on the common shares, if the new investment objective is approved.
Since establishing the current investment objective in October 2005, neither the Board of Directors nor Management of the Company has been satisfied with the returns of the RICI Portfolio. Management believes that the Company can achieve higher and more stable returns and can access a source of income which is absent from its current investment objective by investing in a diversified group of energy-related income and royalty funds and investing, directly and indirectly, in a diversified group of publicly traded infrastructure companies in Canada and other member countries of the Organization for Economic Co-operation and Development (OECD).
Infrastructure comprises the physical assets that a society requires to facilitate its orderly operation, which includes: transport (toll roads, airports, seaports, rail); energy (gas and electricity transmission, distribution and generation); water (pipelines and treatment plants); communications (broadcast, satellite and cable); and social (hospitals, schools and prisons). The infrastructure companies in which the Company will invest will be selected to provide shareholders with long-term exposure to strong and stable returns through distributions and/or dividends from its portfolio of investments, as well as potential capital growth in these investments.
Consolidation of common shares: The Board of Directors of the Company is also seeking shareholder approval to authorize the Board of Directors, in its sole discretion, to consolidate the common shares of the Company at a ratio of up to 15 to one. Management believes that the proposed consolidation will raise the share price to more attractive levels, reduce the shareholder transaction cost and improve trading liquidity. The Company’s name will not change as a result of the consolidation.
Shareholder approval: The change to the Company’s investment objectives and a consolidation of its common shares will require approval of the shareholders at a special meeting to be held on March 6, 2007. The proposed consolidation is also subject to the TSX Venture Exchange approval.
CAPVEST Income Corp.: CAPVEST Income Corp. is an investment corporation listed on the TSX Venture Exchange. Its common shares and 7% convertible debentures trade under the symbols CVS and CVS.DB, respectively. CAPVEST Income Corp. is managed by Sentry Select Capital Corp.
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*Rogers International Commodity Index, the Rogers International Agriculture Commodity Index, the Rogers International Energy Commodity Index and the Rogers International Metals Commodity Index
FORWARD LOOKING STATEMENTS
Certain statements included in this letter constitute forward looking statements, including those identified by the expressions ‘‘anticipate’’, ‘‘believe’’, ‘‘intend’’ and similar expressions to the extent they relate to the Company. The forward looking statements are not historical facts but reflect the Company’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. The payment of dividends on the Company’s common shares generally will be determined by the Board of Directors of the Company and will depend upon the receipt of the Company of dividends and distributions on the securities comprising the investments held by the Company, and there can be no assurance that any dividends or distributions on such securities will be received by the Company. The declaration of such dividends and distributions generally depends upon the financial condition of the issuers in which the Company invests, the condition of equity markets generally, expectations regarding government, economic, environmental, monetary and fiscal policies, inflation and interest rates, economic expansion or contraction, and global or regional political, economic and banking crises and other factors. Readers are cautioned not to place undue reliance on forward-looking information. The Company undertakes 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.
Documents (including press releases) regarding the various investment funds that are managed or advised by Sentry are provided for information purposes only and cannot be relied on to be complete, exhaustive or error-free unless the complete set of documents for any given investment fund with respect to which information is being sought is reviewed and then only on SEDAR (www.sedar.com).