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Stone Investment Group Announces Meeting Details in Connection With Plan of Arrangement and Additional Voting Support – GlobeNewswire

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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:

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  1. SSAL will use cash to be advanced by Starlight Capital in the amount of $800 per Debenture to complete the purchase of the Deposited Debentures;
  2. Starlight Capital will acquire all of the Shares in exchange for $0.01 per Share payable in cash pursuant to the Plan of Arrangement; and
  3. SIG will pay, pursuant to the terms and conditions of the trust indenture governing the Debentures (the “Indenture“), the principal amount owing in respect of the Remaining Debentures, plus accrued and unpaid interest thereon, including any additional interest, to complete the repayment of the Remaining Debentures.

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.

Information Circular

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:

  • On SIG’s website at www.stoneco.com; or
  • Under SIG’s SEDAR profile at www.sedar.com.

Any questions or requests for further information regarding voting at the Meeting should be directed to the Corporation at info@stoneco.com.

Regulatory Notice

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
Richard Stone
CEO & CIO
416 867 2525
richards@stoneco.com
www.stoneco.com

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.

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FP Answers: What is a 'behavioural edge' in investing and how does it affect returns? – Financial Post

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Temperament is the unsung hero of investing success

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By Julie Cazzin with Felix Narhi

Q: What is a “behavioural edge” in investing? How does it potentially enhance returns? How can an investor develop it? — Giovanni

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FP Answers: Giovanni, the term behavioural edge is just another way of saying “temperament,” which refers to the habitual way a person behaves in each situation. For example, one person may be easygoing and relaxed while another is more likely to be impatient and assertive.

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Temperament is the unsung hero of investing success. Gaining insight about our innate emotional temperament and learning how to work with it gives investors an edge.

The common misconception is that you need a high level of intelligence to be a successful investor. No doubt, that can be helpful, but based on many years in the industry, I’ve seen it is not always the most important differentiator.

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Once someone has at least an average level of intelligence, it is temperament that often provides the investing edge in leading to better returns over the long term. “Investing is not a business where the guy with the 160 IQ beats the guy with the 130 IQ,” famed investor Warren Buffett has pointed out.

Having the right temperament can potentially enhance investment returns in several ways. An investor who is very reactive to external events is likely to fare poorly over the long term because, quite simply, the world is full of uncertainty and always will be. Markets are highly reactive, abetted by algorithmic trading and automatic rebalancing by exchange-traded funds. Individual investors should not be.

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Research shows that investors who trade frequently or try to time the market underperform. On the other hand, those investors who can remain calm and patient throughout market cycles do better because markets historically trend upwards. Hands down, being calm, cool and collected is the right temperament for an investor to have.

The concept of “homo economicus” — or economic man — describes a hypothetical person who consistently makes rational decisions. In real life, our decisions are coloured by our formative experiences, moods, external circumstances, what we ate for lunch and a host of other factors. These influences drive our behaviours, but they often operate below conscious awareness (even artificial-intelligence apps “hallucinate”).

Given that behaviour is some combination of cognitive and emotional inputs, an investor can create an edge by developing a disciplined investment process that overrides temperament, especially during highly volatile periods.

The term “active patience” means being clear about your investment principles and what you are looking for, and practicing active patience until the right opportunity arises.

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In contrast, regular patience is making an investment decision and sticking with it no matter what, even if it was the wrong decision. The latter approach is unlikely to bring financial success, which is the major goal of investing.

Active patience is what Buffett would call the “fat pitch,” which occurs when the market (occasionally) presents a very attractive opportunity. It is easy to spot a great opportunity and take full advantage of it when an investor has clear principles on what they are looking for.

Can we change our temperament? Recent studies show that personality traits and moods are subject to change, sometimes within the hour, so temperament may not be as fixed as we’ve been led to believe.

Becoming a better investor starts with self-knowledge — and lots of practice. The behavioural traits associated with good investment outcomes are patience, discipline, emotional control and risk awareness. It so happens, these qualities lead to good life outcomes, too. A calm temperament is the bedrock of making sound investment decisions.

Every investor must determine for themselves how to achieve greater equanimity and there is no shortage of books, videos and TikTok tutorials on that evergreen topic. I would also add the importance of staying humble.

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    FP Answers: Is it time to increase risk in my retirement portfolio?

  2. Two of the world's most famous value investors, Warren Buffett and Benjamin Graham, right.

    FP Answers: What exactly is value investing? A beginner’s guide

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In investing, as in life, the learning never stops. Staying open to new information and having the courage to challenge our own and others’ beliefs and habitual behaviours are the keys to future success.

Felix Narhi is chief investment officer and portfolio manager at PenderFund Capital Management Ltd.

Bookmark our website and support our journalism: Don’t miss the business news you need to know — add financialpost.com to your bookmarks and sign up for our newsletters here.

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Lenders Rally After India’s Central Bank Eases Investment Curbs – BNN Bloomberg

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(Bloomberg) — Indian banks and shadow lenders rose Thursday after the country’s central bank eased capital requirements for a unique type of investment, a move that may free up more funds for loans.

The gains came after the Reserve Bank of India issued Wednesday modified rules on lenders’ required provisions for exposure to alternative investment funds, or AIFs, that invest in the lenders’ borrowers. Under the new policy, a lender needs to set aside capital only for the amount the AIF invested in the debtor company, and not the entire investment of the lender in the AIF.

Shares of Piramal Enterprises Ltd., which reported among the biggest provisions for such investments, closed 1% higher after rising as much as 6% during the day. A gauge of financial services firms climbed 1%, the most since March 1.

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Lenders led the rally in the broader market, with the NSE Nifty 50 Index registering its best day since beginning of the month.

The RBI’s softening stance came after industry players raised concerns over clarity and uniformity after it announced in December restrictions on lenders’ exposure to AIFs that hold stakes in their borrowers. The latest move will likely help firms including Piramal, HDFC Bank Ltd. and IIFL Finance Ltd. reverse some of their relevant provisions made previously, according to analysts at Citigroup Inc. and Jefferies Financial Group Inc.

Read more: India’s Crackdown on Financial Risks Puts Industry on Watch

“Select private banks and NBFCs like Piramal had provided for their entire AIF exposure during 3Q and could see some write-backs in 4Q if they decide to reverse the excess provision,” Jefferies analyst Bhaskar Basu wrote in a note.

Regulators introduced a flurry of new rules last year to prevent a buildup of financial stress at a time when India’s economy remained resilient in the face of rising interest rates, slowing global growth and unabated geopolitical tensions.

©2024 Bloomberg L.P.

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What is Islamic halal investment and why is it on the rise?

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The global Islamic halal economy is set to reach a market value of $7.7 trillion by 2025, more than double the $3.2 trillion it reached in 2015 and significantly higher than the $5.7 trillion it was valued at less than three years ago in 2021, according to industry experts.

A report by the General Council for Islamic Banks and Financial Institutions revealed last year that the global Islamic funds market has grown by more than 300 percent over the past decade, with nearly $200bn now under management globally.

The statistics depict a rise in both demand for halal – or “sharia compliant” – investments and opportunities.

Investing is permitted under Islam, but certain aspects of investment practice – such as charging or paying interest – are not. This has traditionally meant a lack of opportunities for Muslim savers and investors in the past.

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What is halal investment?

Halal is an Arabic term meaning “permitted” and stipulating that:

  • Transactions cannot involve “riba” (interest).
  • Investments must not be made in “haram” (unlawful) assets or commodities such as pork products, alcohol or military equipment, among others.
  • Investments cannot be made based on “gharar”, which has been described as “highly uncertain transactions or transactions that run contrary to the idea of certainty and transparency in business”.

“Halal investment is basically managing your money and finances in line with your faith,” Omar Shaikh, director of Islamic Finance Council UK (UKIFC), told Al Jazeera. “Muslims believe that earning money in a way which is halal is better than earning money (even if that is more) in a way that is harmful to society and against the morals of the religion.”

Umar Munshi, co-founder and managing director of Islamic finance group Ethis, said sharia compliance is key, but institutions and investors looking for ethical investments need to go even further to ensure a business is completely ethical.

“The actions of a business must not have a negative impact on society or the environment,” Munshi told Al Jazeera. “So it’s not only compliant, but refraining from having a negative impact. Investing in a tobacco company, for example, may be sharia compliant, but it’s not good for society.”

How does halal investment work?

One example of halal investment is Islamic business financing, which works using new models of profit-sharing, sharia-compliant insurance and sukuk, an Islamic financial certificate that represents a share of ownership.

Unlike with conventional bonds – a form of IOU that investors can buy in order to receive interest payments – sukuk investors receive partial ownership of a business and then receive profit payments, which are generated over time. These payments are made instead of interest in order to ensure sharia compliancy.

“Islamic finance as a sector is barely 30 years old, with the past 15 years seeing the most development,” Shaikh from UKIFC said. “It takes time to educate and create awareness and as this has happened, more banks have focused on servicing the demand for halal investing. This in turn helps to create more products, which then creates more demand.”

Stock markets used to be the traditional modes of investment for many [Marcin Nowak/Anadolu via Getty Images]

A Goldman Sachs report published in December 2022 estimated that by 2075, five of the world’s 10 largest economies – India, Indonesia, Nigeria, Pakistan and Egypt – will have Muslim populations amounting to more than 850 million people.

As the population rises, so does its demand for financial products. According to the State of the Global Islamic Economy Report 2023, published by research group DinarStandard, some $25.9bn was invested into sharia-compliant investments in the financial year 2022-23, marking a 128 percent year-on-year growth.

“In general, it [halal investment] is on the rise. People are a lot more educated and more aware of how their dollar impacts the socioeconomic landscape globally,” said Siddiq Farid, co-founder of SmartCrowd, a real estate investment platform based in Dubai.

“They are a lot more cautious, too, hence leading to more ethical investing, which halal investing is a big component of. It’s on the rise, particularly around the younger generation. The millennials, they are a lot more aware socially. People realise exactly where their money is going and how it’s being used.”

An increase in opportunities for halal investing and their ease of access are also cited as reasons driving the rise in demand.

Israel’s war on Gaza and its impact

More recently, the rise in demand for halal investments has received an additional boost as consumers boycott brands seen as supporting Israel and its war on Gaza.

The war, which has seen more than 32,000 Palestinians killed by Israeli attacks in Gaza, has “adjusted” the mindset of these investors, Farid said.

“Halal investment has been increasing steadily and it has accelerated further in the past six months, mostly among millennials and people under 40,” he said.

“But in the past, it’s more of these people just looking for something halal. As long as it’s not haram, it’s fine. Now, there’s more awareness of not only halal, but halal aligned with values and faith. All these boycott movements have got people much more aware that something may be halal, but you might not necessarily want to use it, be associated with it or invest in it.”

bds
The Boycott, Divestment and Sanctions (BDS) movement has made many people consider where their money goes before they spend or invest it, say experts [Martin Pope/SOPA Images/LightRocket via Getty Images]

How has technology contributed to the rise of halal investing?

FinTech Magazine reported in December last year that while Muslims make up nearly a quarter of the world’s population, barely one percent of financial assets qualify as sharia compliant. This is set to change, say experts, with the arrival of “fintech” – financial technology that can make investing much more accessible for ordinary consumers and individual investors.

“Muslims are generally not as well educated when it comes to investing, and this is partly due to a lack of available options for them as Muslims. Even basic information pertaining to sharia-compliant investments is often not available to most of the Muslim population,” said Ibrahim Khan, co-founder of the online financial platform Islamic Finance Guru, in an interview with FinTech Magazine.

However, the rise of social media has contributed to an increased awareness and significant growth in sharia-compliant finance. In addition, fintech has made halal investment options, which are often much more convenient and easy to use with a smartphone or laptop, more accessible.

Consultancy group McKinsey & Company published research in January this year showing that “revenues in the fintech industry are expected to grow almost three times faster than those in the traditional banking sector between 2023 and 2028”.

“Your phone is often physically the closest thing to you. Fintechs are able to start from this paradigm and build solutions that are efficient and enhance transparency and choice for retail customers. This is where a lot of the action is at. Many banks are now creating fintech-based solutions or acquiring fintech players,” said UKIFC’s Shaikh.

Munshi added the selling point for fintechs is the age of the target audience.

“The younger generation is more open to investing online,” said Munshi, whose company operates an online platform and community for alternative finance and investment opportunities.

The same research by McKinsey & Company showed that the fintech industry raised record capital in the second half of the 2010s. Venture capital funding grew from $19.4bn in 2015 to $33.3bn in 2020, a 17 percent year-over-year increase.

As of July 2023, publicly traded fintech companies had a combined market capitalisation of $550bn, double that of 2019, the research said.

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