Patriot Capital Funding Modifies Previously Declared Final Dividend and Sets New Record Date
November 03 2009 - 5:36AM
Business Wire
Patriot Capital Funding, Inc. (NasdaqGS: PCAP) today announced
that its board of directors has modified the previously declared
final dividend by determining that payment of the final dividend
will not be contingent upon the closing of Patriot Capital
Funding’s merger with Prospect Capital Corporation. In connection
with this determination, the board of directors also set a new
record date of November 6, 2009 for the final dividend. Patriot
Capital Funding shareholders of record at the close of business on
November 6, 2009 will be paid the final dividend upon the earlier
to occur of (i) the date of the consummation of Patriot Capital
Funding’s merger with Prospect Capital (which is anticipated to be
on or around December 2, 2009) or (ii) December 28, 2009. Assuming
all conditions to closing of the merger are satisfied and the
merger occurs, the shares received in connection with the final
dividend will be converted into the merger consideration in
accordance with the merger agreement with Prospect Capital.
The final dividend will be in an amount equal to Patriot Capital
Funding’s undistributed net ordinary income and capital gains
through the date on which the final dividend is paid to Patriot
Capital Funding shareholders. It is currently estimated that the
amount of the final dividend will be $0.38 per share assuming that
the payment date is December 2, 2009. The actual amount of the
final dividend may be more or less than the estimated amount and
will be determined immediately prior to the date on which the final
dividend is paid to Patriot Capital Funding shareholders.
The final dividend is necessary to preserve Patriot Capital
Funding’s favorable regulated investment company tax treatment.
Specifically, Patriot Capital Funding generally must distribute to
its shareholders annually at least 90% of its “investment company
taxable income,” which is generally its net ordinary income plus
the excess, if any, of realized net short-term capital gains over
realized net long-term capital losses, in order to maintain its
qualification as a regulated investment company for
U.S. federal income tax purposes. As a regulated investment
company, Patriot Capital Funding generally is not required to pay
corporate-level federal income taxes on any income that it
distributes to its shareholders as distributions. Patriot Capital
Funding, however, must pay U.S. federal income tax at the regular
corporate rates on any income or capital gains not distributed to
its shareholders in a timely manner. In addition, because Patriot
Capital Funding’s existence will terminate upon the closing of the
merger, it is required pursuant to the terms of the merger
agreement with Prospect Capital to declare a final dividend to its
shareholders, which together with all its previous dividends, will
have the effect of distributing to Patriot Capital Funding
shareholders all of its regulated investment company taxable income
and net capital gains (if any) through the closing date of the
merger in order to satisfy the annual regulated investment company
distribution requirements and eliminate its liability for federal
income tax for the short taxable year ending on the closing date of
the merger with Prospect Capital.
In accordance with a recent IRS revenue procedure, the dividend
will be payable up to 10% in cash and at least 90% in newly issued
shares of Patriot Capital Funding’s common stock. Each shareholder
will have the right to elect to receive such dividend in cash or
common stock through an election form that will be subsequently
distributed to Patriot Capital Funding shareholders of record at
the close of business on November 6, 2009, although no more than
10% of the total dividend paid to all shareholders will be paid in
cash. If the total portion of the dividend to be paid to
shareholders electing to receive cash exceeds 10% of the total
dividend, each such shareholder electing to receive cash will
receive an allocable portion of the total cash to be distributed
and the remaining portion of the distribution to be paid to each
such shareholder will be paid in common stock.
Also, Patriot Capital Funding previously terminated its dividend
reinvestment plan. As a result, the dividend reinvestment plan will
not apply to the final dividend.
About Patriot Capital Funding, Inc.
Patriot Capital Funding, Inc. (www.patcapfunding.com) is a
specialty finance company providing customized financing solutions
primarily to private equity sponsors focused on making investments
in small- to mid-sized companies.
Forward-Looking Statements
This press release may contain certain forward-looking
statements, including statements with regard to the estimated
amount of the final dividend and the proposed merger transaction
between Patriot Capital Funding and Prospect Capital. Words such as
“believes,” “expects,” “projects,” and “future” or similar
expressions are intended to identify forward-looking statements.
These forward-looking statements are subject to risks and
uncertainties, including that the actual amount of the final
dividend may be materially different than the estimated amount of
the final dividend and that Patriot Capital’s merger with Prospect
Capital may not be consummated, and other factors enumerated in the
filings Patriot Capital Funding makes with the SEC. Patriot Capital
Funding undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise.
Additional Information and Where to Find It
This communication may be deemed to be solicitation material in
respect of the proposed merger transaction involving Patriot
Capital Funding and Prospect Capital. In connection with the
proposed merger, Prospect Capital has filed with the SEC a
registration statement on Form N-14 containing a proxy
statement/prospectus for the shareholders of Patriot Capital
Funding, and each of Patriot Capital Funding and Prospect Capital
may be filing other documents with the SEC regarding the proposed
merger transaction. The definitive proxy statement/prospectus has
been mailed to shareholders of Patriot Capital Funding.
BEFORE MAKING ANY VOTING OR INVESTMENT DECISION, PATRIOT
CAPITAL FUNDING’S SHAREHOLDERS AND INVESTORS ARE URGED TO READ THE
DEFINITIVE PROXY STATEMENT/PROSPECTUS AND OTHER DOCUMENTS FILED
WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY, BECAUSE THEY CONTAIN
IMPORTANT INFORMATION ABOUT THE PROPOSED MERGER. Investors and
shareholders may obtain, without charge, a copy of the definitive
proxy statement/prospectus, as well as other relevant documents
containing important information about Patriot Capital Funding and
Prospect Capital at the SEC’s website (http://www.sec.gov). Patriot
Capital Funding’s shareholders also may obtain, without charge, a
copy of the definitive proxy statement/prospectus and other
relevant documents by directing a request by mail or telephone to
Patriot Capital Funding, 274 Riverside Avenue, Westport,
Connecticut, (203) 429-2700.
Patriot Capital Funding and its directors and executive officers
and other persons may be deemed to be participants in the
solicitation of proxies from Patriot Capital Funding’s shareholders
with respect to the proposed merger. Information about Patriot
Capital Funding’s directors and executive officers and their
ownership of Patriot Capital Funding’s common stock is set forth in
the definitive proxy statement/prospectus for Patriot Capital
Funding’s special meeting of shareholders, which was filed with the
SEC on Schedule 14A on October 26, 2009. Shareholders may
obtain additional information regarding the interests of Patriot
Capital Funding and its directors and executive officers in the
proposed merger, which may be different than those of Patriot
Capital Funding’s shareholders generally, by reading the definitive
proxy statement/prospectus and other relevant documents regarding
the proposed merger.
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