Smoothwater Capital Corporation



Smoothwater Capital Corporation

January 06, 2014 07:30 ET

Equity Financial Holdings Rejects Shareholder Proposals to Protect Shareholder Interests

TORONTO, ONTARIO--(Marketwired - Jan. 6, 2014) - Smoothwater Capital Partners LP I ("Smoothwater") today announced that Equity Financial Holdings Inc. ("Equity" or the "Company") has refused to facilitate a shareholder vote on whether Equity should remain a pure-play alternative mortgage lender, or whether it should pursue alternative transactions. Equity's Board retained TD Securities and, Smoothwater believes, started pursuing transactions for Equity only after Smoothwater and other shareholders initiated a shareholder vote for Board changes. Smoothwater was notified of the rejection of its shareholder proposals by letter dated December 29, 2013.

"We proposed these resolutions to protect shareholders' interests during the Board's exploration of potential 'transactions' that could change the company's current strategy or dilute shareholders," said Stephen J. Griggs, CEO of Smoothwater Capital Partners Inc., the general partner of Smoothwater. "Despite the Board's refusal to include our proposals in its proxy circular, we will include them in our circular, will encourage shareholders to vote 'for' the resolutions, and in the interim will actively challenge any proposal that will dilute shareholders or change the makeup of the Company in a negative manner."

Smoothwater has significant concerns with respect to any transaction that could change the clear, existing strategy of Equity and/or alter the shareholder base in the midst of a shareholder confidence vote. Smoothwater and many other shareholders believe that, with the right board and management, the pure-play alternative mortgage lending strategy will create significant and sustainable value for all shareholders.

As at December 30, 2013, Smoothwater is the largest shareholder of Equity, holding approximately 14.0% of the issued and outstanding shares and holding approximately 16.8% with joint actors.

Additional Information

The information contained in this press release is provided in accordance with Canadian securities laws applicable to public broadcast solicitations. To the extent required by applicable law, Smoothwater is relying on the exemption under section 9.2(4) of National Instrument 51-102 - Continuous Disclosure Obligations of the Canadian Securities Administrators to make this public broadcast. In connection therewith, certain information regarding the proposed Smoothwater nominees for election to the board of Equity, as well as other information, has previously been provided in Smoothwater's press release dated December 5, 2013 under the sections entitled "Proxy Solicitation" and "Smoothwater's Nominees", which sections are incorporated by reference herein (the "Additional Information"). The press release containing the Additional Information, as well as this press release, have been filed by Smoothwater and are available for review under Equity's profile on SEDAR at www.sedar.com.

About Smoothwater

Smoothwater Capital focuses on investing in small to midcap Canadian public companies where there is an identifiable path to significantly improve shareholder value. Smoothwater Capital Corporation works to effect change in targeted companies, often collaboratively with institutional and other like-minded investors who hold material positions but are not able to take on the time consuming and costly activist role.

Contact Information

  • Investors: Smoothwater Capital Partners LP I
    c/o Smoothwater Capital Corporation
    Suite 2500, 120 Adelaide Street West
    Toronto, Ontario M5H 1T1

    Smoothwater Capital Corporation
    Stephen J. Griggs
    Chief Executive Officer
    416.644.6582
    sgriggs@smoothwatercapital.com
    www.smoothwatercapital.ca

    Media: Longview Communications Inc.
    Joel Shaffer
    (416) 649-8006