The Special Committee of the VenGrowth Funds

June 28, 2011 07:00 ET

Covington Offer Further Reduces Redemption Fee for VenGrowth Shareholders

- Redemption fee reduced from 25% to 15% on applicable funds

- Transaction to be financed without debt

- Shareholder meetings on August 25-closing set for August 31

TORONTO, ONTARIO--(Marketwire - June 28, 2011) - The Boards of Directors of the VenGrowth Funds today announced improved terms in the proposed transaction with Covington Capital Corporation ("Covington") as the agent for Covington Fund II Inc. ("Covington II").

"The transaction will now provide a lower redemption fee of 15% rather than the 25% fee announced on May 31," said John Crow, Chair of the Board of the VenGrowth Funds and Co-Chair of the Special Committee of the VenGrowth Funds. "The combined liquidity profile of VenGrowth and Covington has recently improved to the point where it is no longer necessary to take on debt to finance any aspect of the transaction, and this has also made possible the reduced redemption fee."

Mr. Crow continued, "We are advancing to sign a definitive merger agreement with Covington in the coming days and a management information circular is expected to be mailed in early July. We have moved the shareholder meetings to August 25 to give shareholders as much time as possible to consider the transaction. However, we have kept our target closing date at August 31."

Redemption fee reduced from 25% to 15% on applicable funds

Shareholders in VenGrowth Traditional Industries and VenGrowth III will continue to have no redemption restrictions.

VenGrowth I, VenGrowth II, and VenGrowth Advanced Life Sciences shareholders will have two options – they may elect to redeem immediately up to $35.3 million in aggregate of their shares for cash at a value that is equal to the net asset value ("NAV") per share at closing less a redemption fee of 15% or, alternatively, they will receive an equivalent value of Covington II shares reflecting the full value of their VenGrowth Fund shares determined at the date of closing.

If shareholders request redemptions in excess of $35.3 million, redemptions will be processed on a pro rata basis.

All funds generated from the 15% redemption fee will remain in the Funds.

Shareholders in VenGrowth I, VenGrowth II and VenGrowth ALS that receive Covington II shares may also receive 15% of their shareholdings in cash each year without any redemption fee. Such redemptions are expected to be available six months after closing and continue for four years. These annual redemption options are non-cumulative and will expire if not exercised in any given year. After these four years, there will be no redemption restrictions.

Disclaimer

THIS COMMUNICATION DOES NOT CONSTITUTE A SOLICITATION OF PROXIES FOR OR AGAINST ANY PROPOSED OR POTENTIAL TRANSACTION OR IN RESPECT OF ANY MEETING OF SHAREHOLDERS. ANY SUCH SOLICITATION BY VENGROWTH FUNDS WILL ONLY BE MADE IN ACCORDANCE WITH APPLICABLE LAWS. There can be no assurance that the Covington transaction will be completed on the basis proposed or at all. Any transaction will be subject to the need to secure shareholder and regulatory approvals for the merger.

Contact Information