Toronto-based Marret Asset Management Inc. said Friday that the Marret High Yield Strategies Fund (TSC:MHY.UN) will not be terminated on May 30, as originally scheduled.
The majority of the net assets of the closed-end fund will be distributed to unitholders of record on June 12.
Instead of terminating on May 30, the fund will continue in order to hold two private positions.
Marret’s intention is to distribute the net proceeds from the private positions when the holdings are sold and the proceeds are received by the fund.
As of April 30, the private positions, which consist of bonds issued by Cline Mining Inc. and Data & Audio-Visual Enterprises Holdings Inc. (Mobilicity), accounted for $1.18 of the fund’s net asset value per unit of $8.75 or 13.5%.
Cline holds various mineral assets, including the Elk Coal Mine in Colorado, which has almost 620 million tons of in-place coal. The Cline bonds are secured and represented $0.83 of the fund’s net asset value per unit as at April 30.
Mobilicity owns a mobile communications network, including valuable wireless spectrum licences. The fund holds secured and unsecured bonds issued by Mobilicity accounting for $0.29 and $0.06, respectively, of the fund’s net asset value per unit as at April 30.
Marret says it intends to publish a net asset value for the units on a weekly basis on its website at www.marret.com and will provide updates on the status of the private positions as warranted.
Given that the fund is maintaining its listing on the TSX, the trust units will be considered to be qualifying securities for registered plans. Unitholders who hold their units within a registered plan will not be subject to tax on the distribution.
The fund anticipates that the majority of the distributions received by unitholders who do not hold their units within a registered plan will be received as return of capital. The exact treatment will depend on the unitholder’s own circumstances. Unitholders are encouraged to consult with their own tax advisors.