TORONTO, June 25, 2014 /CNW/ - Return On Innovation Advisors Ltd. ("ROI Capital"), the manager of ROI Canadian Mortgage Income Fund (TSX: RIL.UN), ROI Canadian Real Estate Fund (TSX: RIR.UN) and ROI Canadian High Income Mortgage Fund (TSX: RIH.UN) (each a "Listed Fund" and, collectively, the "Listed Funds"), announced today that in connection with the proposed reorganization of the Listed Funds, a special non-cash distribution will be paid on July 4, 2014 to unitholders of record of the Listed Funds at the close of trading on the Toronto Stock Exchange ("TSX") on July 4, 2014 by the issuance of additional units of the applicable Listed Fund.
The special non-cash distribution represents the net income of each Listed Fund for its current taxation year to the extent it exceeds the aggregate of distributions previously made by such Listed Fund during the current taxation year. The special non-cash distribution arises from the maturing or terminating of the forward agreements of the Listed Funds and is expected to consist of capital gains which are generally subject to tax in the hands of taxable unitholders.
The forward agreement for RIL.UN matured in May 2013 and such Listed Fund has since entered into short term forward agreements. Unitholders of RIL.UN are expected to receive approximately $0.06 per unit.
The forward agreement for RIR.UN matured in February 2014 and such Listed Fund has since entered into short term forward agreements. Unitholders of RIR.UN are expected to receive approximately $2.02 per unit.
The forward agreement for RIH.UN has been terminated in advance of its maturity date in connection with the proposed reorganization of the Listed Funds. Unitholders of RIH.UN are expected to receive approximately $1.40 per unit.
The units of each Listed Fund that are issued will be consolidated immediately with all other units of such Listed Fund outstanding, so that thereafter, in most cases, a unitholder of each Listed Fund will hold the same number of units as were held before the issue of such units. The additional units would be issued at a value equal to the net asset value per unit on July 3, 2014 being the last trading day on the TSX before the payment date of the distribution. A non-resident unitholder of the Listed Funds may have fewer units after the consolidation by reason of withholding tax requirements in respect of the distribution to be satisfied by the issue of units.
As previously announced, the proposed reorganization includes the assignment of the management agreements from ROI Capital to Dream Asset Management Corporation along with the indirect transfer of approximately $730 million in assets collectively from the Listed Funds, the underlying reference funds and ROI Institutional Private Placement Fund to Dream Hard Asset Alternatives Trust.
About ROI Capital
Established in 2002, ROI Capital is a privately held Canadian investment management firm that specializes in commercial mortgages, loans and private real estate investments. With a deep understanding of the fundamentals of the commercial real estate market, ROI Capital strives for capital preservation while seeking to deliver sustainable income and long-term returns for investors. This is achieved by primarily focusing on income-producing properties in large urban markets. ROI Capital has created a bridge between investors seeking the income potential from alternative investments and borrowers in Canada's flourishing commercial real estate sector seeking non-bank financing. In just over a decade, ROI Capital has financed over $1.7 billion (as of March 31, 2014) across approximately 200 private commercial real estate investments and has continuously delivered value and income to investors. For more information: www.roicapital.ca
Certain statements included in this news release constitute forward-looking statements. The forward-looking statements are not historical facts but reflect 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 and, accordingly, readers are cautioned not to place undue reliance on such statements due to the inherent uncertainty therein. ROI Capital undertakes no obligation to update publicly or otherwise revise any forward looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law. Investment funds are not covered by the Canada Deposit Insurance Corporation or by any other government deposit insurer. There is no guarantee that an investment in the Listed Funds will earn any positive return in the short or long term nor is there any guarantee that the Listed Funds' investment objectives will be achieved or that the net asset value per unit will appreciate or be preserved.
SOURCE ROI Capital