Discovery Capital Corporation

Discovery Capital Corporation

August 24, 2007 12:23 ET

Discovery Capital Announces Important Dates for Shareholders Regarding Implementation of Its Plan of Liquidation

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 24, 2007) - Following the previously announced shareholder approval of its liquidation plan, Discovery Capital Corporation ("Discovery") (TSX VENTURE:DVY.Y) will now proceed to satisfy closing conditions for completion of the plan of liquidation, and finalize the value of the liquidating distribution to be made to shareholders. The plan of liquidation was explained in Discovery's Management Information Circular dated July 19, 2007 in respect of its shareholders' meeting held on August 21, 2007 at which the shareholder approval was obtained.

Shareholders are advised of the following important dates with respect to their ownership of Discovery shares:

Halt in trading on the TSX Venture Exchange - close of trading on Thursday, September 6, 2007

Record Date for Liquidating Distribution - Tuesday, September 11, 2007

Effective Date for Distribution - on or about September 14, 2007

Only shareholders of Discovery as of the Record Date will receive the liquidating distribution as of the Distribution Date. It is intended that the shares of Discovery will cease to trade on the TSX Venture Exchange after close of business on Thursday, September 6, 2007, and that delisting of the shares will occur thereafter. Discovery Capital will be dissolved on completion of the Plan of Liquidation.

Other Relevant Information

As previously announced and explained in the Management Information Circular dated July 19, 2007 provided for the shareholders' meeting, the liquidating distribution is comprised of cash and "receipts" ("Receipts") representing shareholders' beneficial interests in certain illiquid and other portfolio assets of Discovery ("Residual Assets"). Discovery Capital Management Corp., which will be owned by current senior management of Discovery on closing of the transaction, will act as custodian of the Residual Assets represented by the Receipts. As liquidity becomes available from the Residual Assets, there will be distributions in the future to shareholders of Discovery as of the Record Date. For these purposes, DCMC will obtain from Discovery's transfer agent a list of shareholders of record, as of the Record Date, and maintain this list for future distribution purposes. The services of the Company's transfer agent, CIBC Mellon Trust Company, will be terminated following completion of the Plan of Liquidation.

Discovery shares held by RRSPs and RRIFs

Discovery has been advised that the Receipts to be issued by Discovery representing shareholders' beneficial interests in the Residual Assets ("Beneficial Interests") will not be qualified investments for registered plans ("Plans") such as RRSPs and RRIFs. Any Plan which is a Discovery shareholder will be subject to tax on any income earned on the Beneficial Interests and a monthly tax of 1% of the value of the Beneficial Interests.

A trustee of a Plan ("Trustee") acting on behalf of a Plan that is a Discovery shareholder cannot continue to hold the Beneficial Interests in the Plan and will want to transfer the Beneficial Interests out of the Plan to avoid the imposition of the taxes mentioned above. If the Trustee sells the Beneficial Interests to a purchaser that deals with the Plan at arm's length within the meaning of the Tax Act, the annuitant of the Plan will not realize any tax liability as a result of such transfer. If the Trustee transfers the Beneficial Interests to the annuitant of the Plan, such annuitant will realize a taxable distribution in an amount equal to the difference between the fair market value of the Beneficial Interests received and the amount paid by the annuitant to the Plan for the Beneficial Interests. If the annuitant of the Plan purchases the Beneficial Interests from the Plan for an amount equal to the fair market value thereof, the annuitant will not realize any income tax as a result of such transfer.

Accordingly, individuals who are annuitants of RRSPs or RRIFs which are Discovery shareholders should consult their tax advisors to determine whether or not it is advisable, in their own personal circumstances, to "swap" their Discovery shares out of their RRSPs or RRIFs prior to the Record Date in order that the Receipts representing the Beneficial Interests are received at the outset in a non-RRSP or RRIF account.

The exact income tax consequences of the plan of liquidation to each Discovery shareholder and each individual who is an annuitant of a Plan which is a Discovery shareholder will depend on each such person's particular circumstances. Discovery strongly recommends that all shareholders consult their own tax advisors for personal tax advice on the tax consequences of the plan of liquidation.

For more information about Discovery Capital Corporation, please visit

John McEwen, President and Co-Chief Executive Officer

Harry Jaako, Chairman and Co-Chief Executive Officer

This news release may include statements about expected future events and/or financial results that are forward-looking in nature and subject to risks and uncertainties. The Company cautions that actual performance will be affected by a number of factors, many of which are beyond its control. Future events and results may vary substantially from what the Company currently foresees.

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

Contact Information

  • Discovery Capital Corporation
    John McEwen
    President and Co-CEO
    (604) 683-3000 ext. 106
    Discovery Capital Corporation
    Harry Jaako
    Chairman and Co-CEO
    (604) 683-3000 ext. 105
    Discovery Capital Corporation
    Charles Cook
    (604) 683-3000 ext. 102
    (604) 662-3457 (FAX)