C.A. Bancorp Inc.

C.A. Bancorp Inc.

April 17, 2007 12:15 ET

C.A. Bancorp Inc. (TSX-V: BKP) Provides Investment Update

TORONTO, ONTARIO--(CCNMatthews - April 17, 2007) - C.A. Bancorp Inc. (the "Company") (TSX VENTURE:BKP) is pleased to provide an update on its investment activity.

On November 27, 2006, the Company closed a common share offering, raising $38.8 million in gross proceeds. As of April 16, 2007, the majority of the capital has been invested in various investments, such investments in accordance with the Company's business plan. The Company's strategy has been to:

1. build a portfolio of publicly traded small- and mid-cap entities with a focus on income trusts, as such entities exhibit a high potential for acquisitions, mergers or management-supported privatizations;

2. develop alternative asset investments, exemplified by the rapid development of its real estate investment entity, Charter Realty Holdings Ltd. ("Charter Realty"); and

3. develop its private equity and specialized fund management businesses.

Portfolio investments

As of April 16, 2007, the Company's portfolio investments consisted primarily of high-yielding income trusts and investment trusts, with the market value of approximately $24.5 million. The Company's strategy is to work with financial or strategic partners to create value principally through merger, acquisition or going private strategy, where C.A. Bancorp may be a principal leading investor, and/or to act as a catalyst for these types of transactions. In other instances the Company may identify entities where it believes there is a high probability that a third party will create a catalyst event that will increase unitholder or shareholder value.

The Company's investments in Norcast Income Fund ("Norcast"), KCP Income Fund ("KCP") and Amtelecom Income Fund ("Amtelecom") have produced approximate realized and unrealized nominal returns (not including distributions) to date of 8%, 34%, and 23% (calculated as the percentage gain on average cost using either the net proceeds received for realized gains or the April 16, 2006 close for unrealized gains), respectively, resulting mainly from merger/acquisition activity.

The Company purchased 60,400 units in Norcast at an average cost of $8.64 and 95,000 units of KCP at an average cost of $7.40; both entities were considered by the Company, through its analysis, to be potential acquisition targets to the greater market. Norcast was acquired by a foreign private equity fund, Pala Investments Holding Limited, at $9.30 per unit and KCP recently announced that Caxton-Iseman Capital Inc. from New York has made an offer to acquire its units at $10.00 per unit.

The Company accumulated approximately 284,200 shares of Amtelecom at an average cost of approximately $12.08 per share with a view of working with financial partners and management to privatize the entity. Bell Aliant Regional Communications made an unsolicited offer to Amtelecom's unitholders of $13.00 per unit on February 28, 2007 and subsequently Bragg Communications has counter bid with an offer of $14.25 per unit. The units last traded at $14.85 per unit.

Alternative asset strategy

The Company has begun development of its real estate, infrastructure and financial services investment platforms: Charter Realty Holdings Ltd, Universal Infrastructure Corp. ("Universal") and Global Alternative Investment Inc. ("Global").

The Company has invested $2.4 million to purchase common shares of Charter Realty, and currently owns 12 million shares, representing approximately 57% of the common shares outstanding. These shares were acquired at an average cost of $0.20 per share and have last traded on April 16, 2007 at $0.60 per share. Charter Realty has filed a plan of arrangement to convert to a real estate investment trust, subject to shareholder approval.

In addition to its equity investment in Charter Realty, C.A. Bancorp has provided a $10.0 million credit facility at a rate of 12% per annum to Charter Realty to finance property acquisitions. $4.5 million has been advanced from that facility for the acquisition of Mega Centre Cote-Vertu, which closed on March 30, 2007.

Universal Infrastructure Corp. and Global Alternative Investment Inc. are capital pool companies whose business activities are to seek qualifying transactions as defined by the TSX Venture exchange. The Company owns 950,000 shares of each of Universal and Global, representing 47.5% of the common shares outstanding. Universal and Global last traded on April 16, 2007 at a price $0.335 and $0.27 respectively.

Private equity

The Company continues to experience significant proprietary private company investment deal flow but opportunities to date have not met the Company's criteria. Typically, the Company seeks to invest in either buy-out or growth capital situations involving mature, cash-flow positive companies. Nevertheless, C.A. Bancorp recently supported an unsuccessful shotgun buy-sell arrangement, which generated a fee to the Company.

Assets under management

C.A. Bancorp manages, and earns fees on over $95 million in assets consisting of approximately $55 million in Sentry Select Total Strategy Fund and approximately $40 million in Charter Realty.

Market capitalization

As at April 16, 2007, C.A. Bancorp had a market capitalization of approximately $56 million, based on its 141,741,703 shares outstanding and a closing price of $0.395 per share.


This news release contains or refers to certain forward-looking statements relating, but not limited, to the Company's expectations, intentions, plans and beliefs with respect to the Company's business strategy, estimated returns on the Company's investments and with respect to its investments in capital pool companies. Forward-looking statements can often be identified by forward-looking words such as "believe", "plan", "estimate", "may" and "will" or similar words suggesting future outcomes, or other expectations, beliefs, plans, objectives, assumptions, intentions or statements about future events or performance. Forward looking statements are not historical facts but reflect the Company's current expectations regarding future results or events. Forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from those suggested by the forward-looking statements. For example, the Company may have difficulty in effecting its business plan and strategy due to various reasons, including, without limitation, matters concerning the business, operations and performance of the issuers in which the Company invests, the capital pool companies in which the Company invests may not be successful in completing a qualifying transaction, and estimated returns on the Company's investments generally will depend upon the Company's ability to liquidate its positions in such investments at estimated and/or expected levels and prices. Readers are cautioned not to place undue reliance on forward-looking information. By its nature, forward-looking information involves numerous assumptions, inherent risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and various future events will not occur. The cautionary statements qualify all forward-looking statements attributable to the Company and persons acting on its behalf and speak only as at the date of this news release. The Company undertakes no obligation to update publicly or otherwise revise any forward-looking statement or information whether as a result of new information, future events or other such factors which affect this information, except as required by law.

C.A. Bancorp Inc.

C.A. Bancorp Inc., a Toronto-based merchant bank and alternative asset investment manager, is involved in transactions with both private and public companies across a range of industries, predominantly in Canada, with a specific focus on mid-market investments in industrial, real estate, infrastructure and financial services. C.A. Bancorp conducts its business through two areas of focus: direct investing, and fund management for the institutional, high-net-worth and retail markets.

Sentry Select Capital Corp.

Sentry Select Capital Corp. provides management and administrative services to C.A. Bancorp. Sentry Select is a Canadian wealth management company who manages approximately $8 billion in gross assets as of March 31, 2007. The company offers a diverse range of investment products including closed-end trusts, mutual funds, principal-protected notes and flow-through limited partnerships, covering a variety of domestic and global mandates. With 35 reporting entities, Sentry Select is the leading issuer of securities listed on the Toronto Stock Exchange.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

Contact Information

  • C.A. Bancorp Inc.
    Mark Gardhouse
    (416) 364-2398 (FAX)
    C.A. Bancorp Inc.
    Paolo De Luca
    Chief Financial Officer
    (416) 364-2398 (FAX)
    Email: info@cabancorp.com
    Website: www.cabancorp.com