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June 17, 2014 10:23 ET

The Business, Engineering, Science & Technology Discoveries Fund Inc. Announces Effective Date of Fund Re-Organization

TORONTO, ONTARIO--(Marketwired - June 17, 2014) - The Business, Engineering, Science & Technology Discoveries Fund Inc. (the "Fund") (CSE:VC) announced that the transaction and re-organization involving the Fund, which was approved by the shareholders of the Fund at a special meeting on March 28, 2014, is expected to be effective on or about July 11, 2014 (the "Effective Date"). The Class A and Class L Shares of the Fund will be automatically redeemed for units (the "Units") in a newly formed limited partnership, Tier One Capital Limited Partnership (the "Limited Partnership"). The Limited Partnership will acquire all or substantially all of the assets of the Fund in exchange for the Units of the Limited Partnership (the "Transaction"). Details of the Transaction are set out in the Fund`s Management Proxy Circular dated February 24, 2014.

On the Effective Date:

  1. The Fund will agree to purchase the Class A Shares held by Dissenting Shareholders who have exercised Dissent Rights which remain valid immediately before the Effective Date for cancellation and such Dissenting Shareholders will cease to have any rights as Class A Shareholders other than the right to be paid the fair value of their Class A Shares. The fair value of the Class A Shares in respect of which the Class A Shareholders dissent will be determined as of the close of business on March 27, 2014.

  2. The Limited Partnership will acquire all of the assets of the Fund (other than liquid assets needed to satisfy all liabilities, including payments to Dissenting Shareholders), in consideration for the Units.

  3. Except for Class A Shares held by Dissenting Shareholders, each issued and outstanding Class A Share and Class L Share will be redeemed by the Fund and each Class A Shareholder and Class L Shareholder (other than Dissenting Shareholders) will receive a specified number of Units based on the exchange ratio which will be determined by reference to the net asset value of the Fund on a per series basis on the valuation date immediately preceding the Effective Date. The new Units of the Limited Partnership will have a deemed issue price of $14.00 per Unit.

  4. No fractional Units will be issued pursuant to the Transaction and the number of such Units to be issued shall be rounded down to the next whole number.

  5. The Fund will waive any redemption fees otherwise payable in connection with the redemption of the Class A Shares in exchange for Units of the Limited Partnership.

  6. The Units will be listed on the Canadian Securities Exchange under the symbol "TLP".

The Fund has received certain advance rulings from the Ministry of Finance (Ontario) in respect of the Transaction including, subject to certain requirements, that the Class A Shareholders who have held Class A Shares for less than eight years will not have to effectively repay tax credits granted on the original purchase of Class A Shares as a result of the Transaction.

The Units of the Limited Partnership will not be units of an investment fund. As a result, all investors that hold Class A Shares or Class L Shares through the facilities of a mutual fund dealer registered with the Mutual Fund Dealers Association of Canada or in a BEST registered retirement savings plan will not be able to trade Units and may not receive up to date account information with respect to Unit holdings.

The Income Tax Act (Canada) contains provisions limiting the ownership of Units by "non-residents" and partnerships that are not "Canadian partnerships" as defined in the Income Tax Act (Canada). Class A Shares or Class L Shares that are deemed to be held by "non-residents" on the Effective Date will be redeemed by the Fund at the fair value determined on the valuation date immediately preceding the Effective Date. Withholding taxes and redemption fees may apply to these redemptions. The Limited Partnership may require that registered owners of Units confirm in writing that they are not "non-residents" for purposes of the Income Tax Act (Canada).

About The Business, Engineering, Science & Technology Discoveries Fund Inc.

The Business, Engineering, Science & Technology Discoveries Fund Inc. established in 1996, is registered as a labour sponsored investment fund corporation in Ontario. The Fund's investment focus is primarily on companies capitalizing on the innovative uses of engineering, science and technology.

The Fund invests in eligible companies that are in differing stages of development in a variety of high growth industries which may include telecommunications, information technology, computers and life sciences.

Certain statements contained in this press release may include forward-looking information with respect to the Fund's operations and future financial results. Such statements are based on current expectations, are subject to a number of uncertainties and risks, and actual results may differ materially from those contained in such statements. Further information can be found in the disclosure documents filed by the Fund at www.sedar.com.

Contact Information

  • The Business, Engineering,
    Science & Technology Discoveries Fund Inc.
    John Richardson
    416-203-7331 ext 228 / 1-800-795-BEST
    jrichardson@bestfunds.ca