- The Trustees own less than 0.01% and have no plan to eliminate
the discount to NAV
- A Trustee earns up to USD$87,600
each year from funds run by the Trust's management, making them
beholden to management to keep their lucrative fees
- Management collected over USD$1.7
million in 2014 while unitholders suffered an average
discount to NAV of 5.7%
- Polar urges unitholders to vote the BLUE proxy to amend
unit redemption features and elect five highly-qualified
independent Trustees
TORONTO, April 9, 2015 /PRNewswire/ Polar Securities Inc.
("Polar") is calling on fellow unitholders of Central GoldTrust
("CGT" or the "Trust") (TSX:GTU-U; NYSE MKT:GTU) to unlock over
USD$65 million in value by voting
their BLUE proxy in support of Polar's proposed unit
redemption feature and its five highly-qualified independent
Trustees at the annual and special meeting of the Trust to be held
on May 1, 2015 (the "Meeting").
Polar is proposing to amend the unit redemption
features of CGT's units ("Units") to benefit ALL
unitholders, regardless of the size of their holdings. Unitholders
should expect to accrue at least USD$3,364 of additional value for each 1,000
Units held.
"The incumbent Trustees of CGT, led by Chairman,
President & CEO Stefan Spicer,
appear completely incapable of resolving the persistent discount of
the trading price of Units to their net asset value. Mr. Spicer
earns his fees on the basis of the NAV of the fund, which,
unfortunately, makes him indifferent to the discount," observed
Paul Sabourin, CIO of Polar, from
his office in Toronto.
"The Trustees continue to sit idly by as
unitholders alone bear the burden of over USD$65 million in tangible value that is locked
in the Trust. We believe that Mr. Spicer's trustees have a
fundamental misunderstanding of how the market will react to a
physical unit redemption feature," continued Mr. Sabourin. "We have
come forward with a proven solution and, based on conversations to
date, we are confident fellow unitholders are supportive."
CENTRAL GOLDTRUST HAS A PROBLEM THAT NEEDS TO
BE SOLVED
- Over the past 3 years, the trading prices of the Units
underperformed the returns of gold by 8.9%.
- Units have consistently traded at a discount to NAV for the
past 2 years, and over the past year the average discount has been
6.2%.
- Polar is confident that an effective redemption feature will
resolve the underperformance
THE TRUSTEES ARE MISLEADING
UNITHOLDERS
- The Trustees have attempted to obscure, mislead and confuse
unitholders in an attempt to preserve their entitlements - their
significant management and trustee fees.
- Mr. Spicer and the Trustees highlight a potential 10% increase
in the Trust's management expense ratio. This equates to just
0.036% of the NAV which is overwhelmed by the current 8.5% discount
to NAV. Put another way, per 1,000 units, the Trustees believe that
saving $16 justifies rejecting
Polar's proposal that should add at least $3,364 in value to your units.
- The Trustees have raised tax as a "material" issue for certain
U.S. unitholders that have made QEF elections. The Trustees are
trying to scare you. Using the Trustees' own numbers, if
redemptions for 10% of the outstanding Units were to occur, this
would represent only 0.89% of the NAV, versus the 8.5% discount to
NAV. Any potential tax is mostly a timing issue: your cost base
will go up, reducing your future tax liabilities.
MR. SPICER AND THE TRUSTEES ARE NOT ALIGNED
WITH UNITHOLDERS
- Despite the Trust's stated bullish outlook on gold, all the
Trustees combined own just 2,600 Units or just 0.01% of the Units.
Over the last 5 years, the Trustees have earned over USD$600,000 in fees from the Trust and own just
USD$105,950 in CGT Units.
- Polar is one of the largest holders of CGT and owns over 1
million Units or approximately 5.7% - Polar is aligned with all
unitholders.
- Management continues to collect fees on the NAV and not the
market price of the Units, so they are indifferent to the
discount.
THE TRUSTEES APPEAR TO WORK FOR MR. SPICER -
NOT UNITHOLDERS
- All but one of the Trustees serve on other boards Chaired by
Mr. Spicer and earn up to USD$87,600
each year from these boards.
- Management received over $1.7
million in 2014 alone, while the Units traded at an average
discount to NAV of 5.7%.
THE BOARD HAS NO SOLUTION FOR THE NAV
DISCOUNT
- Despite hiring 4 or more separate outside advisors, all at
unitholder expense, CGT provides NO alternate plan to fix the
pervasive trading discount.
- The Trustees are incapable of unlocking value at CGT as none of
the independent Trustees have capital markets expertise, and very
little public board experience, other than serving on Mr. Spicer's
boards.
BREAK OUT OF THE GOLDTRUST VALUE TRAP - VOTE
BLUE FOR CHANGE
Fellow unitholders, we need your support to
unlock over $65 million of unitholder
value. Vote the BLUE proxy today in favour of Polar's
redemption proposal and for Polar's five highly qualified and
independent nominees.
If you have any questions or need assistance in voting your
BLUE proxy, please contact Shorecrest Group Ltd. at
1-888-637-5789 (toll free within North
America) or 647-931-7454 (collect calls accepted), or by
email at contact@shorecrestgroup.com.
POLAR SECURITIES INC.
Established in 1991, Polar, based in
Toronto, Canada, is registered as
an Investment Dealer, Investment Fund Manager and Futures
Commission Merchant with the Ontario Securities Commission and is a
member of the Investment Industry Regulatory Organization of
Canada. Polar acts as the
investment manager for certain investment funds and manages over
CAD$2 billion of client funds.
Polar's investment philosophy focuses on capital preservation and
low volatility. During its tenure, Polar has invested in more than
10 Canadian precious metals funds and more than 75 Canadian
closed-end products and has extensive expertise in structuring,
managing and investing in complex investment products.
SOURCE Polar Securities Inc.