M-Split Corp.
TSX : XMF
TSX : XMF.PR.A

M-Split Corp.

May 20, 2009 11:46 ET

M Split Corp. -Portfolio Update

TORONTO, ONTARIO--(Marketwire - May 20, 2009) - M Split Corp. ("the Company") was created to provide exposure to the common shares of Manulife Financial Corporation ("Manulife") through two classes of securities, the Priority Equity Shares and the Class A Shares (a "Unit"). Since the inception of the Company on April 18, 2007 (25 months ago) the price of Manulife has declined 46% from $41.08 to $22.20 as of May 19, 2009. The common shares hit a record low of $9.20 on March 9, 2009.

This sharp decline in Manulife has resulted in the Company's net asset value being reduced significantly and as mentioned in previous updates, has required the Company to implement the Priority Equity Portfolio Protection Plan (the "Plan") in accordance with the prospectus. As a result of implementing the Plan, the Company has been required to sell the vast majority of the Manulife common shares held in the Portfolio and acquire fixed income securities.

The Company's total net asset value is approximately $8.62 per unit as at May 19, 2009, consisting of less than 1% common shares of Manulife. The reduced exposure to Manulife will materially limit the future impact of price movements of Manulife shares on the net asset value of the Company and lower the ability of the Company to generate income from dividends and its covered call option writing program.

The significant price decline of Manulife has made it extremely difficult to achieve the original stated objectives for both classes of shares. The Company established a normal course issuer's bid which allows the Company to re-purchase units in the market when trading prices are at a discount to the net asset value.

The Company proposed a reorganization of the Company at a shareholder meeting on February 5, 2009. This proposed capital reorganization was not carried and therefore not implemented. The Company will continue to review and dialogue with shareholders in order to establish potential solutions for re-organizing the Company that would be suitable for all shareholders.

Contact Information

  • M Split Corp.
    Investor Relations
    (416) 304-4443 or Toll Free: 1-877-4-Quadra (1-877-478-2372)
    Website: www.M-Split.com