PFD.PR.A (Index Fund) to Redeem 38% of Holdings

A press release states:

JovFunds Management Inc., the manager of Charterhouse Preferred Share Index Corporation (the “Company”) (PFD.PR.A: TSX), announced today that the Company has received requests for redemption in respect of a total of 844,498 PSI Preferred Shares (“Shares”), representing approximately 38% of the outstanding Shares. Redeeming shareholders will be entitled to receive an amount equal to the net realized proceeds from that portion of the Index Portfolio that is sold to fund the redemption, together with any other net assets of the Company as at November 30, 2007. The redemption payment will be made on or before the tenth business day of the December, 2007.

I reviewed Charterhouse as part of my review of closed end funds.

Now … let’s work it out. 844,000 preferred shares outstanding … 38% are being redeemed … let’s say the NAV approximates the market price, say $20 …. that’s selling pressure of about maybe six to six-and-a-half million. Good thing it’s not a big fund!

Update: Oops! 844,000 preferred shares REPRESENTS 38% of the outstanding. So at $20, total selling pressure comes to about $16.9-million. This is much more serious!

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