Covington Fund I Inc. today announced it has entered into an agreement with Birch Hill Equity Partners for the bloc sale of the venture holdings component of the fund’s investment portfolio.

Today’s announcement follows the fund’s decision last June that now is a logical and appropriate time to begin winding up proceedings and to prepare for a return of capital to the fund’s investors. The cash sale price is $41 million subject to normal adjustments.

After completing an evaluation of alternative options and proposals, the board determined that this transaction with Birch Hill was superior to either an orderly liquidation or a sale to any other interested party. This transaction is the first of its type in Canada.

Covington says the asset sale provides a number of benefits to the fund’s shareholders; including greater certainty of the value of the fund than if the assets were sold individually, and the speed with which the transaction could be completed. This reduced time frame is expected to result in lower operating and transaction expenses during the winding-up period and will permit the fund to distribute the proceeds of the wind-up to shareholders sooner.

The sale is subject to the approval of the fund’s shareholders at a meeting be held on November 9

The sale requires the approval of at least 66 2/3% of the votes. If the proposed transaction and wind-up of the fund are approved by shareholders, it is expected that capital will be returned to Covington Fund I shareholders approximately 12 to 18 months earlier than initially anticipated.