February 13, 2008 / 12:57 PM / in 10 years

Coventree's profit drops, still aims to wind down

TORONTO (Reuters) - Coventree Inc COF.TO, a structured finance firm that was battered last year by Canada’s crumbling asset-back commercial paper (ABCP) market, repeated late on Tuesday it aims to wind down operations as it reported a big drop in first-quarter earnings.

“It is expected that the company will seek an orderly windup of its operations and ... the distribution to shareholders of any remaining funds after setting aside appropriate amounts to cover the company’s expected future costs and liabilities,” Coventree said in a statement.

Excluding variable interest entities (VIEs) such as the Coventree-sponsored ABCP conduits, the Toronto-based company earned a net $3.1 million in the three months ended December 31, down from $6.1 million in the same period a year ago.

Including VIEs, the comparable figure from a year ago is $45.2 million.

Revenue excluding VIEs was $11 million in the period, down from $21.8 million in the year-earlier period.

Earlier this month, Conventree said it lost a competition to become the administrator and asset manager of restructured ABCP in Canada, and would therefore likely have to wind down operations.

Reporting by Jonathan Spicer

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