Nalcap seeks liquidation of Equity Preservation

At the meeting, Nalcap intends to propose that an independent accountant be appointed to liquidate the assets of the company and to distribute the proceeds to shareholders.

“We have been concerned for some time about excessive and questionable expenditures incurred by Equity Preservation’s management and its failu re to provide a reasonable return to investors,” Smith said.

“The company’s share price is standing at such a significant discount to the underlying asset value that shareholders’ best interests can only be se rved by li quidation,” he added.

Equity Preservation shares are currently trading at about 80 cents , which repre sents about a 50% discount to net asset value. The latest financial report by Equity Preservation shows revenues of $93,896 and expenses of $1.14 mil lion.

Nalcap is also seeking to cancel the management agreement between Equity Preservation and Burrard Adelaide La Montagne Management Ltd. Burrard Adelaide owns a bout 3% of Equity Preservation and the two companies have several common directo rs.

Equity Preservation’s President Peter Bradshaw said Nalcap’s proposal is motivated by its aspiration to acquire about $37 million in put options .

Earlier this year Nalcap offered to purchase two classes of put options for 85 cents and $1 per option respectively. However, management of Equity Preservation recommended against acceptance of the offer. (According to Equity Preservation, the put options are like an insurance policy in that shareholders have the righ t to receive, in the future, up to $4 for each share.) Also last year, Equity Preservation retained Merrill Lynch Canada to

conduct a global auction to sell its assets, but no formal offers were announced.

]]>