The Securities Commission has granted Northview Fund (the Filer) exemptions from certain requirements under Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions (MI 61-101) in connection with a proposed transaction involving the acquisition of properties from related parties.
Key Facts:
– The Filer is a reporting issuer in Canada, with its head office in Calgary, Alberta.
– The Filer’s portfolio includes multi-residential suites, commercial real estate, and execusuites in Canada.
– The Filer has three classes of units: Class A (listed), Class C, and Class F (both unlisted).
– The Filer plans to acquire properties from Galaxy Value Add Properties LP (Galaxy Vendor) and D.D. Acquisitions Partnership (DDAP), both considered related parties under MI 61-101.
– The purchase price for the Galaxy properties will be partially satisfied by issuing Class C Units, while the DDAP properties will be exchanged for DDAP Consideration Units in a subsidiary limited partnership, exchangeable for Class C Units.
Reasoning:
– The Filer sought relief from the requirement to obtain a formal valuation for the non-cash assets (DDAP Consideration Units) involved in the transaction with DDAP, arguing that a valuation would essentially duplicate the valuation of the Class C Units for which they are exchangeable.
– The Filer also sought relief from the requirement for each class of units to vote separately on the transaction, asserting that the transaction does not affect any class materially differently after accounting for their economic entitlements.
Outcome:
– The Commission granted the requested relief from the formal valuation requirement for the DDAP Consideration Units, provided the Filer includes certain disclosures in the Circular.
– The Commission also granted relief from the requirement for each class of units to vote separately, allowing a single class vote on the transaction.
Relevant Laws and Regulations:
– The exemptions are based on provisions in MI 61-101, specifically ss. 5.4(1), 6.3(1)(d), 8.1(1), and 9.1(2).
– The exemptions are conditional upon the Filer meeting adapted provisions of the Valuation Exemption and making the required disclosures in the Circular.