National Policy 11-203 Process for Exemptive Relief Applications in Multiple Jurisdictions -- application for a decision that the issuer is not a reporting issuer under applicable securities laws -- issuer in default of its obligation to file and deliver its annual financial statements and related management's discussion and analysis -- requested relief granted.
Applicable Legislative Provisions
Securities Act, R.S.O. 1990, c. S.5, as am., s. 1(10)(a)(ii).
February 9, 2016
IN THE MATTER OF THE SECURITIES LEGISLATION OF ALBERTA, ONTARIO AND QUEBEC (THE JURISDICTIONS) AND IN THE MATTER OF THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS IN MULTIPLE JURISDICTIONS AND IN THE MATTER OF GENTERRA CAPITAL INC. (THE FILER)
The securities regulatory authority or regulator in each of the Jurisdictions (the Decision Maker) has received an application from the Filer for a decision under the securities legislation of the Jurisdictions (the Legislation) that the Filer is not a reporting issuer in the Jurisdictions (the Exemptive Relief Sought).
Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a coordinated review application):
(a) the Ontario Securities Commission is the principal regulator for this application, and
(b) the decision is the decision of the principal regulator and evidences the decision of each other Decision Maker.
Terms defined in National Instrument 14-101 Definitions have the same meaning if used in this decision, unless otherwise defined.
This decision is based on the following facts represented by the Filer:
1. The Filer is a company amalgamated under the Business Corporations Act (Ontario) and has its head and registered office in Toronto, Ontario.
2. The Filer is a reporting issuer in each of the Jurisdictions.
3. The authorized capital of the Filer consists of an unlimited number of Common Shares, an unlimited number of Class A Preference Shares and an unlimited number of Class B Preference Shares. At the close of business on October 25, 2015, there were 8,314,358 Common Shares, 326,000 Class A Preference Shares and 8,703,016 Class B Preference Shares issued and outstanding.
4. Pursuant to a plan of arrangement under the Business Corporations Act (Ontario) (the Arrangement) completed on October 26, 2015 between the Filer and Gencan Capital Inc. (Gencan), the holders of Common Shares of the Filer, other than those holders who were, for the purposes of voting on the Arrangement, "interested parties" within the meaning of Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions (MI 61-101) or otherwise required to be excluded for the purposes of a vote on the Arrangement under the requirements of MI 61-101, exchanged the Common Shares of the Filer held by them for either cash or cash and shares of Gencan.
5. On November 30, 2015, the Filer redeemed all of the issued and outstanding Class B Preference Shares of the Filer in accordance with the terms and conditions attaching to such shares. As a result, there are no Class B Preference Shares issued and outstanding.
6. All of the Class A Preference Shares are held by one shareholder.
7. As a result of the Arrangement, Gencan became a reporting issuer and the Filer became wholly-owned, directly and indirectly, by its current control group comprised of its Chairman, Fred A. Litwin, and members of his family.
8. The Common Shares of the Filer, which traded under the symbol "GIC" on the TSX Venture Exchange, were delisted effective at the close of trading on October 28, 2015.
9. The Filer has no other outstanding securities, including debt securities, aside from the Common Shares and the Class A Preference Shares.
10. The outstanding securities of the Filer, including debt securities, are beneficially owned, directly or indirectly, by fewer than 15 securityholders in each of the jurisdictions of Canada and fewer than 51 securityholders in total worldwide.
11. No securities of the Filer, including debt securities, are traded in Canada or another country on a "marketplace" as defined in National Instrument 21-101 Marketplace Operation or any other facility for bringing together buyers and sellers of securities where trading data is publicly reported.
12. The Filer has no intention to seek a public financing by way of an offering of its securities.
13. Pursuant to British Columbia Instrument 11-502 Voluntary Surrender of Reporting Issuer Status, the Filer voluntarily surrendered its reporting issuer status on January 19, 2016 and the British Columbia Securities Commission confirmed its non-reporting status in British Columbia effective January 29, 2016.
14. The Filer is not in default of any requirement of securities legislation in any Jurisdiction, except for the obligation to file in the Jurisdictions its annual financial statements and related management's discussion and analysis for the year ended September 30, 2015, as required under National Instrument 51-102 Continuous Disclosure Obligations, and the related certification of such financial statements and management's discussion and analysis, as required under National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings (collectively, the Filings), all of which became due on January 29, 2016.
15. The Filer is not eligible to use the simplified procedure under CSA Staff Notice 12-307 Applications for a Decision that an Issuer is not a Reporting Issuer because it is in default of its obligation to file the Filings.
16. The Filer is applying for a decision that it is not a reporting issuer in all of the jurisdictions of Canada in which it is currently a reporting issuer.
17. Upon the granting of the Exemptive Relief Sought, the Filer will no longer be a reporting issuer or the equivalent thereof in any jurisdiction of Canada.
Each of the Decision Makers is satisfied that the decision meets the test set out in the Legislation for the Decision Maker to make the decision.
The decision of the Decision Makers under the Legislation is that the Exemptive Relief Sought is granted.