Tortoise Announces Proposed Merger of NDP and TTP with Strategy Change to Focus on the Global Energy Evolution
November 11 2020 - 5:28PM
Business Wire
Tortoise announced today that following a strategic review of
the funds, the Board of Directors has approved a proposal to merge
Tortoise Energy Independence Fund, Inc. (NDP) with and into
Tortoise Pipeline & Energy Fund, Inc. (TTP). The newly combined
fund will have an investment strategy to invest in those companies
the team believes are in a position to benefit from the energy
evolution taking place across the globe, and be renamed The
Tortoise Energy Evolution Infrastructure Fund.
“We believe that merging these two funds is in the best interest
of stockholders as it provides the opportunity to participate in
the global energy evolution that is underway,” said Brad Adams, CEO
of Tortoise’s closed-end funds. “The strategy will give the
portfolio exposure to what the investment team believes are the
best growth and value opportunities in renewables and midstream
energy companies globally. We anticipate the fund will deliver a
strong total return profile with an attractive yield and lower
overall volatility, which we think is a great combination.”
The fund will invest in global stocks that operate essential
renewable and power infrastructure such as solar and wind
generation as well as energy infrastructure like liquefied natural
gas (LNG) export facilities. These sectors are transitioning the
energy sector toward solar, wind, and natural gas and away from
coal, accelerating the reduction of global CO2 emissions.
“Tortoise’s long history of investing in energy infrastructure,
including renewables and power as well as midstream energy
infrastructure, positions us well to invest in the energy
evolution,“ said Rob Thummel, Senior Portfolio Manager. The future
of energy is driven by the need to meet growing global energy
demand while simultaneously reducing CO2 emissions. We think the
combination of renewable energy sources with power infrastructure,
which includes low-carbon natural gas used domestically and
exported across the globe and utilities in transition that are
transforming their businesses to create a greener electric grid, is
the most pragmatic way to accomplish this goal.”
On completion of the proposed
merger, the adviser intends to recommend that the Board of
Directors increase the quarterly distribution to $0.1925 per share,
an increase of 20.3%, beginning the fiscal 2nd quarter of 2021. In
addition, the adviser has agreed to lower its management fee 0.10%
to 1.00% of average managed assets. The reduced management fee, and
other expected cost savings, are estimated to be approximately
$400,000 annually, or $0.10 per pro forma share. In addition to the
estimated costs savings, the proposed merger may provide improved
liquidity, long-term distribution growth potential, as well as a
modest leverage profile.
“This strategic shift is aligned with our ongoing effort to
narrow the discounts at which these closed-end funds are trading,”
said Adams. “Our research suggests that funds with exposure to
renewables and power infrastructure have been trading closer to net
asset value.” In addition, the Board is committed to the repurchase
programs approved for certain closed-end funds and has authorized
the extension of TTP’s current repurchase program through the first
quarter of 2021.
The Board of Directors and Tortoise believe that the proposed
merger is in the best interests of stockholders of each fund.
Details regarding the factors considered by the Board of Directors
in connection with the merger proposal will be contained in proxy
materials that will be sent to stockholders of each fund. For more
information, an FAQ document and video are available here.
Tortoise Capital Advisors, L.L.C. is the adviser to the
funds.
For additional information on these funds, please visit
cef.tortoiseecofin.com.
About Tortoise
Tortoise focuses on energy and power infrastructure and the
transition to cleaner energy. Tortoise’s solid track record of
energy value chain investment experience and research dates back
more than 20 years. As one of the earliest investors in midstream
energy, Tortoise believes it is well-positioned to be at the
forefront of the global energy evolution that is underway. With a
steady wins approach and a long-term perspective, Tortoise strives
to make a positive impact on clients and communities. For
additional information, please visit www.TortoiseEcofin.com.
Important Information About the Proposed Merger and Where to
Find It:
More information on the proposed merger will be contained in the
proxy materials expected to be filed in the coming weeks. TTP plans
to file in the near future with the Securities and Exchange
Commission (SEC) a joint proxy statement/prospectus on Form N-14 8C
with respect to the merger, and each fund expects to mail a
definitive joint proxy statement/prospectus to each of its
stockholders that will contain information about the proposed
merger following a review period with the SEC. Stockholders are
urged to read the definitive joint proxy statement/prospectus
carefully and in its entirety when available as it will contain
important information about the proposed merger. When filed
with the SEC, the joint proxy statement/prospectus and other
documents filed by the funds will be available for free at the
SEC’s Web site, http://www.sec.gov and on the funds’ website at
cef.tortoiseecofin.com. Stockholders can also obtain copies of the
definitive joint proxy statement/prospectus, when available, for
free by dialing (866) 362-9331.
The funds, Tortoise Capital Advisors and certain of their
respective directors, officers and affiliates may be deemed under
the rules of the SEC to be participants in the solicitation of
proxies from stockholders in connection with the proposed merger
discussed herein. Information about the directors and officers of
the funds may be found in their respective annual reports and proxy
statements previously filed with the SEC.
Cautionary Statement Regarding Forward-Looking
Statements
This press release contains certain statements that may include
“forward-looking statements” within the meaning of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. All statements, other than statements of
historical fact, included herein are "forward-looking statements."
Although the funds and Tortoise Capital Advisors believe that the
expectations reflected in these forward-looking statements are
reasonable, they do involve assumptions, risks and uncertainties,
and these expectations may prove to be incorrect. Actual results
could differ materially from those anticipated in these
forward-looking statements as a result of a variety of factors,
including those discussed in the fund’s reports that are filed with
the Securities and Exchange Commission. You should not place undue
reliance on these forward-looking statements, which speak only as
of the date of this press release. Other than as required by law,
the funds and Tortoise Capital Advisors do not assume a duty to
update this forward-looking statement.
Safe Harbor Statement
This press release shall not constitute an offer to sell or a
solicitation to buy, nor shall there be any sale of these
securities in any state or jurisdiction in which such offer or
solicitation or sale would be unlawful prior to registration or
qualification under the laws of such state or jurisdiction.
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version on businesswire.com: https://www.businesswire.com/news/home/20201111005902/en/
Maggie Zastrow (913) 981-1020 info@tortoiseadvisors.com.
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