GrowthWorks Atlantic Venture Fund Update on Wind-up Process and Redemption of All Class A Shares

GrowthWorks Atlantic Venture Fund Ltd.
·5-min read

HALIFAX, Nova Scotia, Nov. 30, 2020 (GLOBE NEWSWIRE) -- GrowthWorks Atlantic Venture Fund Ltd. (the “Fund”) announced in June that its board of directors (the “Board”) had determined to pursue wind-up and dissolution of the Fund (the “Wind-Up”). In July, the Fund’s Class A shareholders passed a special resolution approving the Wind-Up with 97% of the votes cast by shareholders in favour of the Wind-Up special resolution.

The Board’s decision to pursue the Wind-Up was taken as part of its continuing evaluation of Atlantic Fund’s status and strategic options reasonably available to the Fund after consulting with GrowthWorks Atlantic Ltd. (the “Manager”) and independent legal counsel. The Board considered a number of factors based on information provided by the Manager including: (i) current economic and market conditions caused by the COVID-19 pandemic; current and projected liquidity, operating expenses and liabilities of the Fund; the current size, composition and value of the Fund’s investment portfolio following a material write-down in the value of the venture portfolio earlier in the year; an evaluation of the risks and uncertainties associated with possible alternatives to the Wind-Up such as a possible court ordered liquidation process and/or statutory creditor protection process, and the Manager’s views as to the projected timing of, and realizable proceeds from, divestments of the Fund’s remaining venture assets generally given the impact of current market conditions on exit markets for its venture assets.

As set out in the special meeting materials provided to all shareholders, prior to the completion of the Wind-Up, the Fund is pursuing the disposition of all of its remaining venture assets and while the Manager will seek to maximize values on divestments, it is expected that dispositions will not yield proceeds sufficient to fund any cash distribution to the Fund’s Class A shareholders in connection with the Wind-Up after all expected liabilities and obligations of the Fund have been satisfied or adequately provided for. Also, as disclosed, the Fund may decide to declare a distribution under the Pro Rata Redemption Plan policy as an interim step in the Wind-Up and redeem all outstanding Class A Shares in accordance with the share rights at NAV per share, and in that regard, on November 26th, 2020 the Board approved, effective as of the date(s) designated by the Fund’s President, in consultation with the Manager, a final nil distribution and a redemption of all remaining Class A Shares at $0 NAV/share. Upon completion of the final redemption, the Fund will cease to have any Class A shares outstanding.

The Wind-Up is expected to be effected during the 1st quarter of 2021 in accordance with the provisions of the Canada Business Corporations Act and applicable rules relating to the wind-up of registered labour-sponsored venture capital corporations under the Income Tax Act (Canada) and relevant provincial legislation in New Brunswick, Nova Scotia and Newfoundland and Labrador. The completion of the Wind-Up is subject to the satisfaction of certain conditions, including any necessary regulatory and tax approvals.

Additional updates regarding the Wind-up will be posted as required to the Fund’s website at www.growthworks.ca or the Fund’s SEDAR profile at www.sedar.com.

Forward Looking Statements: This update contains forward-looking statements that are not based on historical or current fact and are based on beliefs and assumptions of management of the Fund at the time the statements are made, including beliefs and assumptions about the Fund’s current and projected operating expenses and liabilities, the current and anticipated impact of COVID-19 on portfolio companies and Fund operations including ability to complete divestments from the venture portfolio and the absence of potential future distributions to shareholders and other risks and uncertainties including, but not limited to, the risk that there may not be a market for the Fund’s venture assets and the Fund may not be able to dispose of these assets on favourable terms, in a timely manner or at all; the expectation and risk that the proceeds that the Fund receives upon a disposition of its venture assets may vary materially and adversely from the historical values assigned to those assets using the International Private Equity and Venture Capital Valuation Guidelines and/or the liquidation values as calculated by the Fund’s manager; the risk that dispositions of the Funds’ venture assets is not expected to yield proceeds sufficient to fund any cash distribution to the Fund’s shareholders in connection with the Wind-Up and/or to satisfy all liabilities and obligations of the Fund; the estimates of all expected liabilities and obligations of the Fund to be satisfied or adequately provided for before the Wind-Up resulting in redemption of all Class A shares in accordance with the Fund’s share rights at a NAV per Class A share of $0; the risk that the Fund does not obtain remaining approvals required to complete the Wind-Up and/or the risk the Fund becomes subject to additional uncertainties, risks and costs under an alternative winding down option such as a possible court ordered liquidation process and/or statutory creditor protection process. 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. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements. Unless required by law, neither the Fund nor the Fund’s manager assumes any obligation to update any forward-looking statements or to reflect the occurrence of unanticipated events, whether as a result of new information, future events or results or other factors. No assurance can be given as to completion of the Wind-Up

Reference:

Peter Clark
President & CEO
GrowthWorks Atlantic Venture Fund Ltd.
Suite 1301 – 1959 Upper Water Street
Halifax, Nova Scotia B3J 3N2
Tel: (506) 440-2711