What happens to my preference shares upon delisting?
The preference shares remain outstanding with the same dividend and other relative rights, preferences, limitations and restrictions as prior to the delisting. American Stock Transfer & Trust Company LLC (“AST”) will continue to act as the transfer agent for the preference shares.
Can the preference shares be traded after they are delisted?
Yes, the preference shares may be transferred in private resale transactions or over-the-counter transactions subject to applicable securities laws. Investors that hold preference shares in direct registered book-entry form can download AST’s transfer of stock ownership packet at:
Investors that hold preference shares in street name should contact their broker-dealer to ascertain such broker-dealer’s requirements with respect to private resale transactions or over-the-counter transactions.
Will the preference shares be quoted on the pink sheets and trade over the counter?
The preference shares may be quoted in the pink sheets only if at least one SEC-registered broker-dealer that is a member of the Financial Industry Regulatory Authority (FINRA) requests to initiate quotes for the preference shares on such quotation service, and such request is approved by FINRA. The Company has not made any arrangements with any market makers to do so, and no assurances can be made that any market makers will seek to initiate quotes for the preference shares in the pink sheets or in any other quotation service or that any over the counter trading market for the preference shares will develop.
If the preference shares do not trade over the counter, how should the preference shares be valued for fund accounting purposes?
Holders of preference shares should consult their own advisors for guidance as to valuation and fund accounting matters.
Is the Company offering a direct sale option for small holders?
Will the preference shares be redeemed? At what price?
In general, the preference shares may be redeemed at the option of the Company at a redemption price equal to $25 per preference share, plus declared and unpaid dividends, if any, to, but excluding, the date of redemption, with accumulation of any undeclared dividends on and after June 30, 2019. The Company is exploring options to lower its cost of capital including, potentially, subject to applicable capital requirements, incurring indebtedness and using the proceeds thereof to redeem the preference shares.
How will holders of preference shares be paid dividends?
Holders of preference shares will receive dividends in the same manner as prior to the delisting. The Company will deposit an amount sufficient to pay dividends that have been declared with AST, the transfer agent for the preference shares, and AST will distribute dividends to the holders of record of the preference shares, including DTC. DTC in turn will distribute dividends as appropriate to its broker-dealer participants.
Will dividends on the preference shares still be qualified dividends?
Following the delisting of the preference shares, dividends paid on the preference shares to non-corporate U.S. holders will no longer constitute “qualified dividend income” (as defined in the Internal Revenue Code of 1986, as amended), and thus will be taxable at full ordinary income rates. Holders of preference shares should consult their own tax advisors regarding the tax consequences of the delisting to them.
Are the preference shares private securities?
Yes. The Company’s obligation in respect of the preference shares to file periodic and current reports with the SEC on Forms 10-K, 10-Q and 8-K has been suspended.
What financial and other information about the Company will be made available going forward?
Upon written request of any holder of preference shares that intends to sell (each a “seller”) preference shares to accredited investors in a private resale transaction that meets the requirements of Section 4(a)(7) of the Securities Act of 1933, as amended, the Company will make available to such seller and the prospective purchasers designated by the seller, such information about the Company as may be reasonably required the transaction to meet the requirements of Section 4(a)(7).
The Company also intends to provide or make available to holders of preference shares certain annual and quarterly financial information about the Company. Such information will be mailed (which may include email) to holders of record or made available on the Company’s website or distributed via other means determined by the Company.