Covington Capital Corporation Announces Proposed Acquisition of New
Generation Biotech (Equity) Fund Inc. by Covington Fund II Inc. & Suspension
of Redemptions of New Generation Biotech (Equity) Fund Inc.
TORONTO, Oct. 12 /CNW/ - Covington Capital Corporation ("Covington") announced today that Covington Fund II Inc. ("Covington Fund II") has entered into a Definitive Purchase Agreement with the New Generation Biotech (Equity) Fund Inc. ("NGBE"), whereby Covington Fund II Inc. will acquire all of the assets of the NGBE Fund in exchange for Class A shares of Covington Fund II to be distributed to NGBE shareholders. Effective Tuesday October 12, 2010, NGBE will suspend redemptions on the Fund. Covington Fund II will offer its current NGBE shareholders restricted redemption rights following the transaction.
The halt is necessary given the current liquidity position of NGBE and will provide Covington management with the time required to plan the integration of the NGBE portfolio into the Covington Fund II portfolio as well as to review synergies between the NGBE portfolio and the VenGrowth Funds which are anticipated to be acquired into Covington Fund II as a result of the transaction.
Also today, Covington announced that Covington Fund II has entered into a Definitive Purchase Agreement with the VenGrowth Investment Fund Inc., The VenGrowth II Investment Fund Inc., The VenGrowth III Investment Fund Inc, The VenGrowth Advanced Life Sciences Fund Inc., and The VenGrowth Traditional Industries Fund Inc. (collectively the "VenGrowth Funds") whereby Covington Fund II Inc. will acquire all of the assets of each of the VenGrowth Funds in exchange for Class A shares of Covington Fund II to be distributed to shareholders of the VenGrowth Funds.
Immediately prior to the transaction, the combined net assets of Covington Fund II, the VenGrowth Funds, and NGBE are expected to be approximately $425,000,000. The combined Fund will hold approximately 55 venture investments in its portfolio.
In addition, Covington Fund II has secured, subject to closing conditions, third party financing of up to $60 million. The debt facility will be available to support the Fund II's on-going liquidity requirements.
It is anticipated that subsequent to receipt of regulatory approvals, requisite shareholder approvals and other conditions to the proposed transaction are satisfied, the transactions will close simultaneously during the fourth quarter of 2010. At this time there can be no assurance that all conditions to the completion of the transactions will be achieved.
About Covington Group of Funds
Established in 1994, Covington Capital Corporation is one of Canada's largest providers of venture capital investment funds. Managing over $200 million in assets, Covington provides Canadians with the ability to access venture capital investment opportunities via their suite of retail venture capital product offerings.
For further information:
Fiona Robertson
EVP Sales and Marketing
Covington Group of Funds
416-365-9155
[email protected]
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