Manulife Asset Management Limited, the manager of AIC Global Financial Split Corp. has announced:
that it intends to extend the termination date of the Corporation which is currently set for May 31, 2011 for another five years, with a new termination date scheduled to be on May 31, 2016.
The proposed extension would provide securityholders the potential to benefit from a more complete market recovery of the Corporation’s Net Asset Value.
A special meeting of holders of the Class A Shares and Preferred Shares of the Corporation will be held to consider and vote upon the extension. Further details of the extension will be outlined in a management information circular to be prepared and delivered to holders of the Class A Shares and Preferred Shares in connection with the special meeting. Such extension would be subject to any required regulatory approvals.
This must be the most ridiculous attempt to extend term ever. The NAV as of Dec. 17 is $9.98 – that is, the $10 p.v. preferred shares are actualy underwater right now. I feel quite safe in saying that the only reason they’re quoted at 9.19-27 is due to the imminence of the scheduled redemption date.
The press release does not mention who is going to pay the expenses of the special meeting – I’ll bet a nickel that expenses will be borne by the Split Share Corp., not the manager.
The fund started in 2004, and there is nothing unusual about its terms. As can be surmised from the name of the fund, it simply ran into a train wreck; there’s no shame in that.
There is shame, however, in such a grossly abusive waste of shareholder time and money as to seek a term extension. I can think of no inducement that could possibly be offered to the preferred shareholders that would cause an alert and prudent preferred shareholder to vote in favour of a term extension. As with the reorganization of XCM.PR.A and XMF.PR.A, any value at all that is offered to the Capital Unitholders comes directly out of the preferred shareholders’ pockets.
I am surprised that Manulife is putting its name such a sleazy exercise, simply in an attempt to keep fourteen lousy million dollars under management – assuming there are no retractions on the scheduled wind-up date date. And trust me, if this obscenity somehow passes I’ll be recommending retraction.
ASC.PR.A was last mentioned on PrefBlog when DBRS withdrew its rating at the request of the manager. ASC.PR.A is tracked by HIMIPref™, but is relegated to the Scraps index on credit concerns.