Calgary is on pace to shatter all previous venture capital investment records in the city and the province.
TORONTO, May 09, 2022 (GLOBE NEWSWIRE) — Stone Investment Group Limited (“SIG” or the “Corporation“) announced today that the Ontario Superior Court of Justice (Commercial List) (the “Court“) has issued an interim order (the “Interim Order“) authorizing, among other things, the holding of a meeting (the “Meeting“) of holders of the Corporation’s common shares (collectively, the “Shares“), to consider and vote upon a corporate plan of arrangement (the “Plan of Arrangement“) under the Canada Business Corporations Act (the “CBCA“) to implement certain transactions that were previously announced and agreed to pursuant to an arrangement agreement (the “Arrangement Agreement“) with Starlight Investments Capital LP (“Starlight Capital“).
As previously announced by the Corporation in its April 7, 2022 news release (the “Transaction Announcement“), Starlight Capital, through a wholly-owned subsidiary, will, through a series of transactions acquire SIG. As part of the transaction, Starlight Capital will: (i) acquire those $1,000 principal amount secured debentures issued by SIG (the “Debentures“) that were previously tendered and remain deposited pursuant to the offer (the “Stone Debenture Offer“) launched on November 29, 2021 by Stone-SIG Acquisition Limited (“SSAL“), a wholly-owned subsidiary of SIG (the “Deposited Debentures“); (ii) acquire all of the Shares; and (iii) redeem the remaining Debentures (the “Remaining Debentures“) not tendered to the Stone Debenture Offer, all pursuant to the terms of the Arrangement Agreement.
In particular, the transactions contemplated by the Arrangement Agreement are expected to be implemented in the following sequence:
Additional key terms of the transactions contemplated by the Arrangement Agreement are described in the Transaction Announcement.
Since the date of the Transaction Announcement, additional shareholders have entered into voting and support agreements (“Voting Agreements”) with Starlight Capital, which, together with other shareholders that previously entered into Voting Agreements, represent 65.9% of the outstanding Shares.
SIG’s Board of Directors unanimously recommends that shareholders vote IN FAVOUR of the Arrangement at the Meeting.
Following implementation of the Plan of Arrangement and completion of the related transactions in respect of the Debentures, the successor corporation to SIG will be a wholly-owned subsidiary of Starlight Capital and no Debentures will remain outstanding. For greater certainty, only the Shares will be arranged under the Plan of Arrangement. The Debentures and the rights of the holders of Debentures will not be arranged, but will be repurchased or acquired pursuant to the Stone Debenture Offer and the Indenture and will be completed in accordance with the steps set out in the Plan of Arrangement.
The Meeting and Voting
The Meeting in respect of the Plan of Arrangement is scheduled to be held virtually on June 15, 2022. Pursuant to the Interim Order, the Meeting is scheduled to begin at 3:00 p.m. (Toronto time).
The record date (the “Record Date“) for voting at the Meeting is 5:00 p.m. (Toronto time) on May 16, 2022.
Holders of the Shares as at the Record Date will be entitled to vote on the Plan of Arrangement at the Meeting based on one vote per Share held as at the Record Date.
To be approved at the Meeting, the Plan of Arrangement requires (i) the affirmative vote of at least 66⅔% of the votes cast or represented by proxy at the Meeting and (ii) the affirmative vote by a simple majority of the votes cast at the Meeting by all the shareholders present virtually or represented by proxy at the Meeting excluding Mr. Richard Stone in accordance with Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions.
In connection with the Plan of Arrangement, it is anticipated that the Corporation will continue from the Business Corporations Act (Ontario) to the CBCA (the “Continuance“) prior to the Plan of Arrangement being effective. The Continuance requires the affirmative vote of at least 66⅔% of the votes cast at the Meeting.
The deadline for the shareholders to submit their proxies or voting instructions in order to vote on the Plan of Arrangement and other items to be considered at the applicable Meeting is 3:00 p.m. (Toronto time) on June 10, 2022.
The management information circular for the Meeting (the “Circular“) will contain, among other things, information regarding procedures for voting on the Plan of Arrangement, as well as other background and material information regarding the Plan of Arrangement and the Arrangement Agreement. The Corporation expects the mailing of the Circular to begin on or about May 18, 2022. The Circular, the forms of proxies, the voting information and election forms will also be available as follows:
Any questions or requests for further information regarding voting at the Meeting should be directed to the Corporation at email@example.com.
SIG has announced today that it intends to file early this week the requisite notice with the Canadian securities regulators pursuant to National Instrument 31-103 – Registration Requirements, Exemptions and Ongoing Registrant Obligations, which is required since the completion of the Plan of Arrangement will result in the indirect change of control of Stone Asset Management Limited (“SAM”), a wholly-owned subsidiary of SIG that is registered under securities legislation across Canada. In addition, notice of the change of control of SAM, in its capacity as the investment fund manager of the Stone mutual funds, has been given to investors in the SIG mutual funds pursuant to National Instrument 81-102 – Investment Funds.
Court Approval and Implementation
If the Plan of Arrangement and the Continuance are approved at the Meeting, the Corporation and Starlight Capital will attend a hearing before the Court to seek a final order approving the Plan of Arrangement, which has been scheduled for June 20, 2022 at 11 a.m. (Toronto time) (the “Final Order“).
As part of the Court approval of the Plan of Arrangement, the Corporation and Starlight Capital will seek, among other things, a permanent waiver of (i) any and all Debenture defaults resulting from the commencement of their CBCA proceedings (the “CBCA Proceedings“) and (ii) third party change of control provisions that may be triggered by the implementation of the Plan of Arrangement. The Corporation also expects to seek approval of the release of certain claims as provided for in Plan of Arrangement.
Completion of the transaction contemplated by the Arrangement Agreement are subject to, among other things, approval of the Plan of Arrangement by the shareholders at the Meeting to be held on June 15, 2022 as further described above, such other approvals as may be required by the Court, other applicable regulatory approvals, the issuance of the Final Order approving of the Plan of Arrangement by the Court, and the satisfaction or waiver of applicable conditions precedent pursuant to the Arrangement Agreement. Subject to the receipt of all requisite approvals and the satisfaction or waiver of the other conditions to completion of the Plan of Arrangement, the Corporation is working towards completing the Plan of Arrangement by the end of June 2022.
Additional information in connection with the implementation of the Plan of Arrangement and the CBCA Proceedings will be made publicly available by the Corporation and certain additional documents relating to the Plan of Arrangement and/or and the CBCA Proceedings will be hosted on the Corporation’s website (www.stoneco.com).
Bennett Jones LLP is acting as legal advisor to the Corporation and Borden Ladner Gervais LLP is acting as legal advisor to Starlight Capital.
About Stone Investment Group Limited
The Corporation is an independent wealth management Corporation. The Corporation, through its wholly-owned subsidiary, Stone Asset Management Limited, structures and manages high quality investment products for Canadian investors.
For more information:
Stone Investment Group Limited
CEO & CIO
416 867 2525
Disclaimer for Forward-Looking Information
Certain information contained in this press release may contain forward-looking statements within the meaning of applicable securities laws. The use of any of the words “continue”, “plan”, “propose”, “would”, “will”, “believe”, “expect”, “position”, “anticipate”, “improve”, “enhance” and similar expressions are intended to identify forward-looking statements. More particularly and without limitation, this document contains forward-looking statements concerning: key terms of the Plan of Arrangement and the effect of its implementation on the shareholders and the Corporation; stakeholder support for the Plan of Arrangement; the acquisition of the Corporation by Starlight Capital; the expected process for and timing of implementing the Plan of Arrangement; the holding and timing of, and matters to be considered at the Meeting as well as with respect to voting at such Meeting; the deadlines for submitting proxies, voting instructions and elections; the scheduling of the Meeting; the matters to be considered at and voted on the Meeting; the Corporation’s continuance under the CBCA; the relief to be sought in the CBCA Proceedings in respect of the Plan of Arrangement; the completion of the Plan of Arrangement, including with respect to obtaining any necessary approvals and satisfying any conditions and the expected timing thereof; the public posting of materials and information related to the Plan of Arrangement; and the effect of the Plan of Arrangement.
Forward-looking statements necessarily involve risks, including, without limitation, risks associated with the ability of the Corporation to implement the Plan of Arrangement on the terms described in this press release and the Transaction Announcement; the ability of the Corporation to receive all necessary regulatory, court and stakeholder approvals in order to complete the Plan of Arrangement; the matters to be considered and voted on at the Meeting; the ability of the Corporation to operate in the ordinary course during the CBCA Proceedings, including with respect to satisfying obligations to service providers, suppliers, contractors and employees; the ability of the Corporation to continue as a going concern; the ability of the Corporation to continue to realize its assets and discharge its liabilities and commitments; the Corporation’s future liquidity position, and access to capital, to fund ongoing operations and obligations (including debt obligations); the ability of the Corporation to stabilize its business and financial condition; the ability of the Corporation to implement and successfully achieve its business priorities; the ability of the Corporation to comply with its contractual obligations, including, without limitation, its obligations under debt arrangements; the general regulatory environment in which the Corporation operates; the tax treatment of the Corporation and the materiality of any legal and regulatory proceedings; the general economic, financial, market and political conditions impacting the industry and markets in which the Corporation operates; the ability of the Corporation to sustain or increase profitability, fund its operations with existing capital and/or raise additional capital to fund its operations; the ability of the Corporation to generate sufficient cash flow from operations; the impact of competition; the ability of the Corporation to obtain and retain qualified staff, equipment and services in a timely and efficient manner (particularly in light of the Corporation’s efforts to restructure its debt obligations); and the ability of the Corporation to retain members of the senior management team, including but not limited to, the officers of the Corporation.
Events or circumstances may cause actual results to differ materially from those predicted, as a result of the risk factors set out and other known and unknown risks, uncertainties, and other factors, many of which are beyond the control of SIG. In addition, forward-looking statements or information are based on a number of factors and assumptions which have been used to develop such statements and information but which may prove to be incorrect and which have been used to develop such statements and information in order to provide stakeholders with a more complete perspective on SIG’s future operations. Such information may prove to be incorrect and readers are cautioned that the information may not be appropriate for other purposes. Although the Corporation believes that the expectations reflected in such forward-looking statements or information are reasonable, undue reliance should not be placed on forward-looking statements because the Corporation can give no assurance that such expectations will prove to be correct. In addition to other factors and assumptions which may be identified herein, assumptions have been made regarding, among other things: the impact of competition; the general stability of the economic and political environment in which SIG operates and the timely receipt of any required regulatory approvals. Readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions which have been used. As a consequence, actual results may differ materially from those anticipated in the forward-looking statements. Furthermore, the forward-looking statements contained herein are made as at the date hereof and SIG does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.
Conservative Party leadership candidate Pierre Poilievre has a personal financial interest in cryptocurrencies that he has promoted during his campaign as a hedge against inflation.
The Ottawa-area MP’s assets include units of Purpose Bitcoin, a Canadian-based, exchange-traded fund that holds cryptocurrencies, according to his May 4 disclosure to the federal ethics commissioner.
Poilievre’s campaign denied encouraging investment in crypto puts him in a conflict of interest.
“Mr. Poilievre spoke with the Office of the Conflict of Interest and Ethics Commissioner prior to publicly commenting on Bitcoin and Bitcoin related policies,” his spokesperson Anthony Koch said in an email.
“The Office cleared him to do so without issue.”
The campaign provided an email from the Office of the Ethics Commissioner from November that said the interest in Bitcoin “does not prevent you from commenting on cryptocurrencies in general, participating in debates and vote on public policies related to the regulation of cryptocurrencies.”
The commissioner’s office also said Poilievre was free to host conversations with other MPs “on this subject matter as any policies or regulations would apply to you as one of a broad class.”
Poilievre has proposed barring the Bank of Canada from developing its own digital currency and said Canadians should be free to use alternative currencies for payments.
“We need sound money again—and also the freedom for buyers and sellers to choose #bitcoin and other technology,” he tweeted on April 1.
In March, he held an event at a London, Ont., restaurant and paid for a shawarma using Bitcoin. And at an event in April in BC, he made a Bitcoin donation to the BC SPCA, accompanied by a dog wearing a Bitcoin logo.
“A Poilievre government would welcome this new, decentralized, bottom-up economy and allow people to take control of their money from bankers and politicians,” his campaign said in a press release.
Since then, the value of Bitcoin and other cryptocurrencies has plunged, exposing Poilievre to criticism from opponents who say encouraging Canadians to invest in something so volatile is reckless.
The value of the Purpose Bitcoin ETF has fallen nearly 40 per cent over the past six months.
The Conflict of Interest Code for Members of the House of Commons requires MPs to report assets and liabilities in excess of $10,000. But it does not require them to reveal the value of their assets or when they were acquired.
Poilievre’s campaign said his holdings in Bitcoin were right around the disclosure threshold.
In his disclosure, Poilievre also reported holding exchange-traded funds based on the stock indexes of Singapore and Switzerland. His campaign said he was required under the conflict-of-interest Code to publicly disclose these ETFs, but not his holdings in a Canadian stock index fund.
“Mr. Poilievre’s largest investment by far is in Canadian Index Fund that tracks the TSX,” the campaign said.
The co-founder of ethics advocacy group Democracy Watch said MPs should be prevented from holding assets like Bitcoin.
“It’s clearly unethical for MPs or party leadership candidates to advocate for changes that will help businesses they are invested in, and the best way to stop this is to prohibit MPs from having investments,” Duff Conacher, said in an email.
During last week’s leadership debate in Edmonton, Poilievre was challenged over his past comments on Bitcoin. He should not be encouraging investment in “magic internet money,” said Brampton, Ont., mayor and leadership candidate Patrick Brown.
“People can make their own investment decisions,” Poilievre said in response to a question from Leslyn Lewis, an Ontario Conservative MP and leadership candidate.
“I simply said they should be free to decide whether they want to use Bitcoin. I don’t want to be like communist China and ban Bitcoin or other technologies.”
Canadian investors are already free to invest in cryptocurrencies. Indeed, Poilievre is not the only MP with investments in crypto. At least seven others declared Bitcoin or other digital currency assets in their disclosures, including:
Ben Lobb (Conservative, Ontario): Bitcoin.
Chandra Arya (Liberal, Ontario): Stock options of Coinbase Global Inc.
Taleeb Noormohamed (Liberal, BC): Bitcoin, Ethereum, Stacks and Coinbase Global Inc.
Joël Lightbound (Liberal, Quebec): Purpose Bitcoin ETF, Purpose Ether ETF, Bitcoin and Solana.
Scot Davidson (Conservative, Ontario): Evolve Cryptocurrencies ETF, held by spouse.
Tony Van Bynen (Liberal, Ontario): Ethereum.
Terry Beech (Liberal, BC): Ethereum.
Calgary is on pace to shatter all previous venture capital investment records in the city and the province.
Alberta attracted $466 million worth of investment in the first quarter of 2022, $433 million of which was in Calgary, according to the Canadian Venture Capital and Private Equity Association Q1 report on Tuesday. In all of 2021, there was $561 million worth of venture capital investment in Alberta, $500 million of which was in Calgary.
“We knew it was going to be a significant quarter for the province of Alberta, but we weren’t expecting this much activity this fast in 2022,” said Economy, Jobs and Innovation Minister Doug Schweitzer. “It really is a testament to the growth of the industry and also the maturity of the industry in Alberta.”
In 2020, the province had a record year of venture capital growth over 12 months at about $450 million worth of investment.
Kim Furlong, CEO of CVCA, credited investments made by the province years ago to make Alberta’s risk-tolerant environment more appealing to startups and investors.
The numbers were boosted across the board due to record investment in Canada, but Calgary is starting to take a bigger piece of the pie. Calgary still trails Toronto ($2.19 billion), Montreal ($928 million) and Vancouver ($454 million) in total dollars, but it is closing the gap, especially in Western Canada.
Over the past several years, Calgary has seen rapid growth in the startup sector and venture capital investment, setting records every year.
Brett Colvin, CEO of Calgary startup Goodlawyer, said there has been a dramatic shift in the approach to the sector. When he was originally looking at launching his company he was considering Toronto, Montreal or Vancouver, but three years ago the environment began to change in his hometown.
“There is this palpable energy within government, business and the wider community that startups and technology will be key drivers to our city’s future and long-term success,” he said. “Fundamentally, the attitudes have shifted and the opportunity — that it seems like a lot of people are in agreement with — for the long-term success of our city lies in startups, lies in tech. It’s an incredible time to be a startup founder in Calgary.”
Still, he would like to see the return of the Alberta Investor Tax Credit, which he said was critical to early-stage investment for his company. The credit was phased out by the government beginning in 2019.
Schweitzer pointed to other initiatives the province has put its weight behind to stimulate growth, acting on the advice of the Innovation Capital Working Group. These moves include injecting $175 million into the Alberta Enterprise Corp. to increase liquidity in the sector and attract outside investment, efforts to improve the talent pool and improve mentorship through accelerator projects.
Edmonton was the beneficiary of just $18 million in venture capital investment in the first quarter. Schweitzer said Calgary began its pursuit of these dollars and startups before the provincial capital. He pointed to organizations such as Calgary Economic Development pushing this mission, noting Innovate Edmonton is attempting to do the same.
Furlong, however, warned there are some signs of potential slowdown in the next few quarters due to factors such as inflation and wage pressures, geopolitical pressures including the Russian invasion of Ukraine, and an overheated market. She said it is important for people to continue pushing for growth in the sector.
“Let’s celebrate the success that we saw,” she said. “Regardless of what’s on the horizon, let’s stay the course, because the types of companies and what it produces — jobs, exports — the talent that it attracts, all of it put together is essential for us thinking about how we transform Canada into an innovative economy.”
(Bloomberg) — US and European businesses are reconsidering their investments in China after the lockdown in Shanghai and restrictions in other cities caused major disruption to their operations.
The American and European Union chambers of commerce in separate briefings said their members are rethinking their supply chains and whether to expand investment in the face of China’s zero tolerance approach to combating Covid-19.
“The Covid lockdowns this year and the restrictions over the past two years are going to mean that three, four, five years from now, we will most likely see investment decline,” Michael Hart, president of the American Chamber of Commerce in China, said Tuesday in Beijing.
While this doesn’t mean an immediate shift outside of China, Hart said that many firms that source from China are asking where else they can get supplies, and whether they should be building or sourcing from somewhere else.
The outlook is shared by European companies. Many members of the European Union Chamber of Commerce in China are putting investment plans on pause and starting to consider whether to leave the country, the business group’s representatives said at a briefing Monday. Uncertainties about a potential next wave of outbreaks are taking a heavy toll on business confidence, they said.
“Uncertainty is really the keyword, because there’s no view, no outlook about how long this could last, and what will be next after Shanghai,” said Massimo Bagnasco, vice president of the European chamber.
Read More: China Vows to Ease Supply Chain Woes in Foreign Chamber Meeting
Profits of foreign firms in China are falling, and companies have become increasingly vocal about the impact on their businesses from Covid lockdowns and restrictions. Earlier this month, more than half of US firms said they were reducing or delaying investment plans and expected lower revenue due to the economic fallout from extended lockdowns, which have clogged the world’s biggest port, closed highways and shuttered factories and businesses.
And last week, respondents to a survey by the German Chamber of Commerce in China reported that nearly 30% of their foreign employees had plans to leave China because of Covid. The chamber surveyed 460 companies.
The restrictions that began in March in Shanghai and elsewhere come on top of existing travel controls, which have made it hard for employees of foreign firms to travel to China or visit headquarters overseas.
The travel restrictions have left AmCham “very concerned” about US and other foreign investment into China, Hart said at a press conference to launch the chamber’s 2022 White Paper.
China usually ranks among the top three destinations for investment among AmCham’s member companies, but “it is falling in preference,” Hart said, adding that if people can’t travel to the country, it will “decline as an investment destination.”
European businesses continue to face challenges including lost production days, labor shortages and supply chain and logistics disruptions due to lockdown measures. The pressure to leave China will rise significantly if the obstacles don’t improve by the end of the year, said Joerg Wuttke, president of the chamber.
The economy is also unlikely to rebound this time around as sharply as it did in 2020 because of ongoing headwinds from the crackdown on the technology sector, a persistent property market slump, and capital flowing out of China as the China-US interest rate differential diminishes, according to Wuttke.
Read more: China’s Covid Exit Hinges on Seniors Who Don’t Want Vaccines
Wuttke urged China to accelerate its vaccination efforts, as the vaccine uptake among those older than 65 has slowed in recent months.
“You cannot hold an economy hostage by 150-to-160 million people that are insufficiently vaccinated,” he said. “This has to change, it can’t go on forever.”
(Updates with details about a survey by the German chamber of commerce in paragraph eight.)
©2022 Bloomberg L.P.
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