/NOT FOR DISTRIBUTION IN THE UNITED STATES OR OVER UNITED STATES WIRE SERVICES/
TORONTO, May 26, 2016 /CNW/ - MCAN Mortgage Corporation
("MCAN") (TSX:MKP) today announced that MCAP Corporation ("MCAP")
has filed a preliminary prospectus with the securities regulatory
authorities in each of the provinces and territories
of Canada with respect to a proposed initial public
offering (the "Offering") of common shares (the "Common Shares") by
MCAP and a secondary offering ("Secondary Offering") of Common
Shares by MCAN and another shareholder of MCAP. A copy of the
preliminary prospectus will be available on SEDAR
(www.sedar.com).
As at March 31, 2016 MCAN
indirectly owned 4.3 million partnership units, or approximately
14.7% of MCAP Commercial LP ("MCAP LP"), representing an investment
in MCAP LP by MCAN of $44.3
million. Prior to completion of the Offering, the units
in MCAP LP will be exchanged for Common Shares, some of which will
be sold pursuant to the Secondary Offering.
Although the number of Common Shares to be sold pursuant to the
Secondary Offering has not yet been determined, MCAN currently
expects to sell less than 25% of its holdings in MCAP, subject to
market conditions. MCAN expects to realize a gain on the sale
pursuant to the Secondary Offering which will increase its
regulatory capital.
MCAN currently accounts for its investment in MCAP using the
equity basis of accounting, under IAS 28 Investment in Associates
and Joint Ventures, which historically has meant that MCAN recorded
its proportionate share of income from MCAP in its consolidated
results.
Following the Offering, in addition to any cash received by MCAN
resulting from the proceeds received from the Secondary Offering,
MCAN expects to recognize its investment in the Common Shares
of MCAP at the fair market value thereof. The investment
carried at fair market value compared to the original carrying
value (for the same proportion of units) is anticipated to result
in a gain that will be recorded upon completion of the
Offering.
The preliminary prospectus is still subject to completion or
amendment, and has not yet become final for the purpose of a
distribution of securities to the public. This press release
shall not constitute an offer to sell or the solicitation of an
offer to buy, nor shall there be any sale or acceptance of an offer
to buy these securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to the time a receipt
for the final prospectus or other authorization is obtained from
the securities commission or similar authority in such
jurisdiction. This press release is not an offer of securities
for sale in the United States, and
the securities may not be offered or sold in the United States absent registration or an
exemption from registration. The securities have not been and
will not be registered under the United Sates Securities Act of
1933.
Forward-Looking Information
This press release may contain forward-looking statements.
These forward-looking statements can generally be identified as
such because of the context of the statements and often include
words such as MCAN "believes", "anticipates", "expects", "plans",
"estimates" or words of a similar nature. These statements
are based on current expectations, and are subject to a number of
risks and uncertainties that may cause actual results to differ
materially from those contemplated by the forward-looking
statements. Some of the factors that could cause such differences
include legislative or regulatory developments, competition,
technology change, global market activity, interest rates, changes
in government and economic policy and general economic conditions
in geographic areas where MCAN operates. Reference is made to
the risk factors disclosed in MCAN's Annual Information Form dated
February 26, 2016 which are
incorporated herein by reference. These and other factors
should be considered carefully and undue reliance should not be
placed on MCAN's forward-looking statements. Subject to
applicable securities law requirements, MCAN does not undertake to
update any forward-looking statements.
SOURCE MCAN Mortgage Corporation