Altruista Fund Inc.

September 28, 2005 14:45 ET

Altruista Fund to Cease Distribution of Shares and Review Ongoing Operations

TORONTO, ONTARIO--(CCNMatthews - Sept. 28, 2005) - Altruista Fund Inc. (the "Fund") today announced that as a result of the August 29, 2005 announcement by the Ontario Ministry of Finance to eliminate its provincial tax credit for investors in labour sponsored investment funds ("LSIFs"), the board of directors of the Fund has decided to cease distribution of the Fund's Class A Shares as soon as possible and to review the Fund's options for ceasing current operations as soon as practical.

As previously announced, on August 29, 2005, the Ontario Ministry of Finance announced that it plans to eliminate its provincial tax credit for investors in LSIFs no earlier than the end of the 2005 taxation year. The Fund is a LSIF, and taxpayers in Ontario who purchase Class A Shares of the Fund are currently eligible to receive the Ontario provincial tax credit. If the government's proposal is implemented, the Ontario provincial tax credit may not be available for purchases of Class A Shares of the Fund following March 1, 2006.

The Fund was established in December 2004 with the objective of investing in small and medium sized eligible businesses serving the infrastructure needs of charitable institutions. As a result of the nature of these intended investments, the Fund's primary investment objective has been to achieve interest and dividend income for its investors through investments, primarily of a debt nature, in such businesses, as opposed to significant long term capital appreciation. Accordingly, the Fund has regarded the availability of tax credits for purchasers of the Fund's Class A Shares as a principal incentive for investment in the Fund and an important component of the Fund's current business model. After consideration of the Ontario Ministry of Finance's announcement, the board of directors of the Fund has determined that the planned elimination of the Ontario provincial tax credit for investors in LSIFs and the existing uncertainty about the implementation of the same will materially impact upon the Fund's ability to raise additional capital and operate based on its current business model and that it is inadvisable in such circumstances to attempt to raise additional capital and continue operations as currently conducted. Accordingly, the Fund's board of directors has determined that it is in the best interests of the Fund to cease distribution of any additional Class A Shares as soon as possible and to review its options for ceasing operations based on the Fund's current business model as soon as practical.

To proceed with this course of action, the Fund intends to file an amendment to its current prospectus dated January 5, 2005 to cease distribution of its Class A Shares effective as soon as possible. In addition, the management and board of directors of the Fund have commenced reviewing options for winding down the Fund's current operations in a manner which best protects the interests of the Fund's shareholders in the circumstances, including the sale or dissolution of the Fund. The Fund will update shareholders as its plans develop and additional information becomes available.

Contact Information

  • Altruista Fund Inc.
    Ray Pennings
    Chief Executive Officer
    (905) 947-8246