(MENAFN- ProactiveInvestors) Natural resource lender Marret Resource () said it is suspending its monthly dividend payments until further notice citing the "material deterioration" in commodity prices and related securities in the last few months particularly in the energy and metals sectors.
The company emphasized that the move is not tied to the income generation of its portfolio but rather is a result of not being able to satisfy the corporate law requirements applicable to the dividend payment program.
The portfolio currently yields 6.7 percent Marret said and it has no debt as well as $85 million in assets comprised largely of publically-traded high yield bonds and publically-traded equities.
About 44 percent of its portfolio is exposed to the energy sector according to the company's statement. As a result its shares continue to trade at a significant discount to net asset value it said.
Marret's shares traded at a discount of 30.3 percent based on the net asset value per share of $4.8053 and closing price of $3.35 on the TSX on November 27. The company believes part of the discount reflects its investment in Cline Mining and the uncertainty surrounding the coal miner given the continued drop in the price of coal.
"The continuing decline in the price of coal and other coal properties available for sale and competing with Cline for potential buyers has made it difficult to dispose of Cline's coal mine at a favourable price and in a timely manner" Marret said.
"Cline has sufficient liquidity to continue for at least two more years and Cline is looking at various avenues including surplus equipment sales to extend this period."
The company said it is dealing with the significant trading discount and is considering a number of alternatives to provide shareholders with liquidity. It anticipates it will make a proposal with regards to this in the near term.
Marret invests in public and private debt securities and makes term loans to issuers in a broad range of natural resource sectors including energy base and precious metals as well as other commodities.
Shares were down 4.6 percent at C$3.10 in Toronto as 2:45pm ET.
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