Tortoise MLP Fund, Inc. (NTG) Announces Terms of Rights Offering
Tortoise MLP Fund, Inc. (NYSE: NTG) (the “Company”) today announced that
its Board of Directors (the “Board”) has approved the terms of the
issuance of transferable rights (“Rights”) to the holders of the
Company’s common stock (par value $0.001 per share) (“Common Stock”), as
of the record date, June 19, 2018 (the “Record Date”). Holders of these
Rights are entitled to subscribe for additional shares of Common Stock
(the “Offer”) at a discount to market price (subject to a sales load).
After considering a number of factors, including potential benefits and
costs, the Board and Tortoise Capital Advisors, L.L.C., the Company’s
investment adviser (“Tortoise” or the “Adviser”), have determined that
it is in the best interests of both the Company and its stockholders to
conduct the Offer and increase the assets of the Company available to
take advantage of existing and future investment opportunities that may
be or may become available, consistent with the Company’s investment
objective to seek high total return with an emphasis on current income.
The Adviser believes this is an optimal time to raise additional assets
for the Company based on a number of factors, including the following
potential benefits:
-
Opportunities for incremental investments in midstream companies with
strong fundamentals that the Adviser believes are undervalued
-
Investment opportunities in active private placement market, including
private investment in public equity (PIPE) deals, where the Adviser
believes the Company can invest at a discount
-
Enhances long-term total return potential of the Company’s net asset
value
-
Positive impact to total expense ratio by spreading fixed costs over
larger capital base
-
Reduction in the Company’s deferred tax liability per share, enhancing
tax efficiency
-
Opportunity to reduce leverage ratio and enhance asset coverage levels
-
Potential for increased trading volume and liquidity of NTG
“We think this is a great opportunity for the Company and its
stockholders,” said Brad Adams, CEO of the Company. “We believe the
midstream energy market is currently undervalued and this offering will
provide the Company with capital to pursue attractive investment
opportunities to seek to enhance the Company’s total return to
stockholders. This offering provides existing stockholders the ability
to participate in this opportunity at a discount to current market
price.”
The Company expects to maintain its current distribution level following
the Offer. Additionally, the Company expects to declare a regular
quarterly distribution payable on or about August 31, 2018 with a record
date on or about July 3, 2018 which will not be payable with respect to
Common Stock that is issued pursuant to the Offer as it will occur after
such record date. As such, shares issued pursuant to the Offer will be
entitled to receive the quarterly dividend expected to be payable in
November.
Certain key terms of the Offer include:
-
Holders of Common Stock on the Record Date (“Record Date
Stockholders”) will receive one Right for each outstanding share of
Common Stock owned on the Record Date. The Rights entitle the holders
to purchase one new share of Common Stock for every 3 Rights held
(1-for-3); however, any Record Date Stockholder who owns fewer than
three shares of Common Stock as of the Record Date will be entitled to
subscribe for one share of Common Stock. Fractional shares of Common
Stock will not be issued.
-
The subscription price per share of Common Stock (the “Subscription
Price”) will be determined on the expiration date of the Offer, which
is currently expected to be July 18, 2018, unless extended by the
Company (the “Expiration Date”), and will be equal to 90% of the
average of the last reported sales price of a share of Common Stock of
the Company on the New York Stock Exchange (the “NYSE”) on the
Expiration Date and each of the four (4) immediately preceding trading
days (the “Formula Price”). If, however, the Formula Price is less
than 90% of the Company’s NAV per share of Common Stock at the close
of trading on the NYSE on the Expiration Date, the Subscription Price
will be 90% of the Company’s NAV per share of Common Stock at the
close of trading on the NYSE on that day. The estimated Subscription
Price has not yet been determined by the Company.
-
Record Date Stockholders who fully exercise all Rights issued to them
can subscribe, subject to certain limitations and allotment, for any
additional shares of Common Stock which were not subscribed for by
other holders of Rights at a discount to the market price. Investors
who are not Record Date Stockholders but who otherwise acquire Rights,
are not entitled to subscribe for any additional shares of Common
Stock.
-
If sufficient shares of Common Stock are available, all Record Date
Stockholders’ over-subscription requests will be honored in full. If
these requests exceed available shares of Common Stock, they will be
allocated pro rata among Record Date Stockholders based on the number
of Rights originally issued to them by the Company.
-
Rights are transferable and are expected to be admitted for trading on
the NYSE under the symbol “NTG RT” during the course of the Offer.
The Offer will be made pursuant to the Company’s effective shelf
registration statement on file with the Securities and Exchange
Commission (“SEC”) and only by means of a prospectus supplement and
accompanying prospectus. The Company expects to mail subscription
certificates evidencing the Rights and a copy of the prospectus
supplement and accompanying prospectus for the Offer to Record Date
Stockholders within the United States shortly following the Record Date.
To exercise their Rights, common stockholders who hold their Common
Stock through a broker, custodian or trust company should contact such
entity to forward their instructions to either exercise or sell their
Rights on their behalf. Common stockholders who do not hold Common Stock
through a broker, custodian, or trust company should forward their
instructions to either exercise or sell their Rights by completing the
subscription certificate and delivering it to the subscription agent for
the Offer, together with their payment, at one of the locations
indicated on the subscription certificate or in the prospectus
supplement.
The information in this press release is not complete and is subject
to change. This document is not an offer to sell any securities
and is not soliciting an offer to buy any securities in any jurisdiction
where the offer or sale is not permitted. This document is not an
offering, which can only be made by a prospectus. Investors should
consider the Company's investment objectives, risks, charges and
expenses carefully before investing. The Company's prospectus supplement
and accompanying prospectus will contain this and additional information
about the Company and additional information about the Offer, and should
be read carefully before investing. For further information regarding
the Offer, or to obtain a prospectus supplement and the accompanying
prospectus, when available, please contact the Company's information
agent:
AST Fund Solutions, LLC
55 Challenger Road, Suite 201
Ridgefield
Park, NJ 07660
(866) 751-6315
About Tortoise MLP Fund, Inc.
Tortoise MLP Fund, Inc. (NYSE: NTG) owns a portfolio of master limited
partnership (MLP) investments in the energy infrastructure sector, with
an emphasis on natural gas infrastructure MLPs. Tortoise MLP Fund,
Inc.’s investment objective is to provide its stockholders a high level
of total return with an emphasis on current distributions.
About Tortoise
Tortoise specializes in essential assets and income. Tortoise invests in
assets and services that serve essential needs in society and can also
serve essential client needs, such as diversification and income.
Tortoise’s energy investing expertise across the energy value chain,
including infrastructure and MLPs, dates back more than 15 years.
Through a variety of investment vehicles, Tortoise provides access to a
wide range of client solutions, focused on their evolving needs. For
more information, please visit www.tortoiseadvisors.com.
Tortoise Capital Advisors, L.L.C. (the “Adviser”) is the Adviser to the
Tortoise MLP Fund, Inc.
Safe harbor statement
This press release shall not constitute an offer to sell or a
solicitation to buy, nor shall there be any sale of these securities in
any state or jurisdiction in which such offer or solicitation or sale
would be unlawful prior to registration or qualification under the laws
of such state or jurisdiction.
Forward-looking statement
This press release contains certain statements that may include
“forward-looking statements” within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934. All statements, other than statements of historical fact, included
herein are “forward-looking statements.” Although the Company and
Tortoise Capital Advisors believe the expectations reflected in these
forward-looking statements are reasonable, they do involve assumptions,
risks and uncertainties, and these expectations may prove to be
incorrect. Actual results could differ materially from those anticipated
in these forward-looking statements as a result of a variety of factors,
including those discussed in the Company’s reports that are filed with
the Securities and Exchange Commission. You should not place undue
reliance on these forward-looking statements, which speak only as of the
date of this press release. Other than as required by law, the Company
and Tortoise Capital Advisors do not assume a duty to update any
forward-looking statement.
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