West Street Capital Corporation
TSX VENTURE : WSC
TSX VENTURE : WSC.PR.A

West Street Capital Corporation

August 22, 2013 17:35 ET

West Street Announces Second Quarter Results

TORONTO, ONTARIO--(Marketwired - Aug. 22, 2013) - West Street Capital Corporation ("West Street" or the "company") (TSX VENTURE:WSC)(TSX VENTURE:WSC.PR.A)reported net income for the quarter ended June 30, 2013 of $25.9 million compared to $1.4 million in the comparative quarter in 2012. Net income in the current quarter included a $29.0 million realized gain from the disposition of an investment within the portfolio and a corresponding tax expense of $3.8 million. Net income in the current quarter before disposition gains and taxes was $0.8 million compared to $0.7 million in the same period of 2012.

After providing for unpaid quarterly preferred share dividend obligations of $0.7 million (2012 - $0.7 million) that accumulated during the period, net income per common share was $2.31 (2012 - $0.06) and $2.34 (2012 - $0.13) for the three and six month periods ended June 30, 2013.

STATEMENTS OF OPERATIONS

Three months ended June 30 Six months ended June 30
(CDN$ thousands, except per share amounts) 2013 2012 2013 2012
Investment income $ 871 $ 735 $ 1,703 $ 1,466
Operating expenses (75 ) (45 ) (107 ) (68 )
796 690 1,596 1,398
Foreign currency revaluation (26 ) (158 ) (26 ) (198 )
Investment gains 28,972 - 28,972 -
Net income before taxes 29,742 532 30,542 1,200
Current tax (expense) recovery (18 ) 8 (35 ) 11
Deferred tax (expense) recovery (3,796 ) 834 (3,469 ) 1,639
Net income $ 25,928 $ 1,374 $ 27,038 $ 2,850
Net income per share $ 2.31 $ 0.06 $ 2.34 $ 0.13

Comprehensive income, which includes both net income and other comprehensive income for the three months ended June 30, 2013, totalled $1.0 million compared to $6.5 million in the same period of 2012, which reduced the common share deficit to $14.0 million. The company recorded other comprehensive loss of $25.0 million (2012 - income of $5.2 million), primarily due to the release of previously recorded unrealized fair value gains related to the investment disposal, which is offset by the realized gain in net income.

For the six months ended June 30, 2013 the company reported comprehensive income of $4.2 million (2012 - $13.6 million), consisting of net income of $27.0 million (2012 - $2.8 million) offset by a loss in other comprehensive income of $22.8 million (2012 - income of $10.8 million).

On August 12, 2013, the company's major shareholder, Brookfield Asset Management Inc. ("Brookfield") commenced its increased offer (the "Increased Offer") to acquire all of the issued and outstanding common shares of the company at a price of $0.32 per common share that Brookfield does not currently own. The Increased Offer will be open for acceptance until 5:00 pm (EST) on September 16, 2013 unless extended or withdrawn. A Special Committee that was formed in April 2013 has reviewed the Increased Offer and fairness opinion provided by KPMG, and has unanimously recommended the Increased Offer. Brookfield has advised the company that it intends to proceed with a second-stage transaction to acquire any Common Shares not tendered under the Increased Offer. Full details of the Increased Offer are contained in the take-over bid circular of Brookfield and the Company's directors' circular, copies of which are available under the Company's profile at www.sedar.com.

STATEMENTS OF FINANCIAL POSITION

(Unaudited)
June 30,
December 31,
(CDN$ thousands) 2013 2012
Assets
Cash and equivalents $ 38,162 $ 6,206
Securities 52,899 80,300
Interest receivable and other 585 833
$ 91,646 $ 87,339
Liabilities
Accounts payable and other liabilities 238 165
Equity 91,408 87,174
$ 91,646 $ 87,339
June 30, December 31,
(CDN$ thousands, except per share amount) 2013 2012
Equity $ 91,408 $ 87,174
Less: amounts attributable to preferred shares
Stated value (42,160 ) (42,160 )
Unpaid dividends(1) (63,274 ) (61,806 )
Common share deficit(2) $ (14,026 ) $ (16,792 )
Per common share $ (1.28 ) $ (1.54 )
(1)Represents dividends in arrears on preferred shares that are unaccrued for IFRS purposes
(2)The above table presents the significant common share deficit resulting from the net book value of the company being attributed to the preferred shares

Contact Information

  • West Street Capital Corporation
    Sachin G. Shah
    President
    (416) 359-8625