Brompton Announces Special Meeting of Brompton Oil Split Corp.
06 Outubro 2023 - 2:09PM
(TSX: OSP, OSP.PR.A) Brompton Funds Limited
(
“Brompton” or the
“Manager”),
announces that it will hold a special meeting (the
“
Meeting”) of holders of Class A Shares and
Preferred Shares (the “
Shareholders”) of Brompton
Oil Split Corp. (the
“Fund”). The purpose of the
Meeting is to consider and vote upon an extraordinary resolution to
implement amendments to update and modernize the investment
objectives and investment restrictions of the Fund among other
things (the
“Amendments”).
The Fund currently invests in a portfolio of
equity securities of large capitalization North American oil and
gas issuers, primarily focused on those with significant exposure
to oil. The Manager believes that the oil and gas industry
continues to be an attractive area for investment, however, the
number of companies that currently qualify for inclusion in the
Fund’s portfolio has decreased by approximately 25% since the
Fund’s initial public offering in February 2015 as a result of
consolidation within the industry and a decline in the number of
oil and gas issuers included in the S&P 500 Index and
S&P/TSX Composite Index. Given the changing business and
investment environment, oil and gas companies are seeking to
diversify their operations over the course of the next decade
beyond traditional oil and gas operations which may further limit
the investment opportunities that the Fund will have given its
current investment restrictions and guidelines.
The Manager proposes to expand the investment
universe of the Fund from oil and gas issuers listed in the S&P
500 Index and S&P/TSX Composite Index to a portfolio of equity
securities of dividend-paying global energy issuers, which may
include companies operating in energy subsectors and related
industries such as oil and gas exploration and production,
equipment, services, pipelines, transportation, infrastructure,
utilities, and renewables, among others. In addition, the Manager
proposes that the Fund be permitted to hold up to 25% of its total
assets in other global natural resource companies which include
companies that own, explore, mine, process or develop natural
resource commodities or supply goods and services to those
companies.
The Manager believes that the Amendments will
enhance the Fund’s long-term returns as well as provide the
following benefits:
(a) Expanded Investment Universe
– The Manager estimates that the Fund’s investable universe would
increase significantly to approximately three times larger than its
current universe.
(b) Increased Opportunity for Capital
Appreciation – An expanded investment universe will
provide additional opportunities to increase the value of the
Fund’s portfolio which in turn could result in a higher net asset
value for the Class A Shares and potentially result in the Fund
being able to make monthly cash distributions to the holders of
Class A Shares. Holders of Preferred Shares will also benefit from
the Amendments if there is an increase in the net asset value of
the Class A Shares which will provide greater asset coverage for
the Preferred Shares.
(c) Increased Opportunity for Call
Writing – The Fund is permitted to write covered call
options on the securities held in its portfolio, accordingly, by
expanding the Fund’s investment universe the Manager will have more
opportunities to write covered call options and potentially
generate additional returns for the Fund.
(d) Portfolio Diversification –
Diversifying the Fund’s portfolio holdings should reduce the
volatility of the Fund’s portfolio and mitigate the potential for
large declines in the net asset value per Class A Share.
In addition, the management fee payable
by the Fund will remain unchanged and will not be
increased.
As a result of the changes described above, the
Manager is also proposing to change the name of the Fund to
“Brompton Energy Split Corp.” and the ticker symbols in respect of
the Fund’s Class A Shares and Preferred Shares to ESP and ESP.PR.A,
respectively.
A special meeting of Shareholders will be held
on December 5, 2023 to consider and vote on the proposed
Amendments. Shareholders of record at the close of business on
November 3, 2023 will be entitled to vote at the Meeting. If
approved, the Manager expects to implement the Amendments as soon
as possible following the Meeting. Details of the proposed
Amendments will be further outlined in the Fund’s notice of meeting
and management information circular that will be prepared and
delivered to Shareholders in connection with the Meeting and will
be available on www.sedarplus.ca.
About Brompton FundsFounded in
2000, Brompton is an experienced investment fund manager with
income focused investment solutions including exchange-traded funds
(ETFs) and other TSX traded investment funds. For further
information, please contact your investment advisor, call
Brompton’s investor relations line at 416-642-6000 (toll-free at
1-866-642-6001), email info@bromptongroup.com or visit our website
at www.bromptongroup.com.
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(an “exchange”). If the shares are purchased or sold on an
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There are ongoing fees and expenses associated
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Fund. You can find more detailed information about the Fund in the
public filings available at www.sedarplus.ca. Investment funds are
not guaranteed, their values change frequently and past performance
may not be repeated.
Certain statements contained in this news
release constitute forward-looking information within the meaning
of Canadian securities laws. Forward-looking information may relate
to matters disclosed in this press release and to other matters
identified in public filings relating to the Fund, to the future
outlook of the Fund and anticipated events or results and may
include statements regarding the future financial performance of
the Fund. In some cases, forward-looking information can be
identified by terms such as “may”, “will”, “should”, “expect”,
“plan”, “anticipate”, “believe”, “intend”, “estimate”, “predict”,
“potential”, “continue” or other similar expressions concerning
matters that are not historical facts. Actual results may vary from
such forward-looking information. Investors should not place undue
reliance on forward-looking statements. These forward-looking
statements are made as of the date hereof and we assume no
obligation to update or revise them to reflect new events or
circumstances.
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