7/13/2012 4:44:00 PM
NEWS BRIEFS
Tree Island Fund Seeks Corporate Status
Tree Island Wire Income Fund obtained board approval to convert the fund from an income trust to a corporation. The proposed reorganization is subject to Unitholder and other approvals and will be undertaken pursuant to a plan of arrangement with an expected effective date prior to January 1, 2013.
“The proposed structural changes will not deter Tree Island’s objective of returning to profitability, but are necessary for taxation strategies,” stated trustee chairman Amar Doman. “Since becoming a public company in November 2002, the income fund structure has become a less desirable form of business enterprise.
“Our new corporate structure should result in an improved and simplified structure for the company and our investors.”
The trustees and fund management said conversion benefits include:
A simplified tax and legal structure, comparable to the majority of public companies operating in Canada, providing among other things the benefit of reduced internal and external administrative costs;
A tax efficient conversion of the fund into a corporation if completed before January 1, 2013;
Resolves issues relating to the potential non-compliance with foreign ownership limitations; and
Provides better access to global capital markets in order to maximize returns to shareholders.
Following the conversion, the board of directors of the resulting public corporation will be comprised of the current members of the Board of Trustees and senior management will remain in place.
Unitholders must approve the proposed conversion plan at the fund’s special meeting scheduled for September 13, 2012.
In June Tree Island renewed its senior banking facility increasing it from $35 million to $40 million.
Higher sales volumes and selling prices produced a 13% increase in revenues to $44 million during the opening quarter of 2012.
For 2011 full-year revenue rose to $150 million, while gross profit improved to $10.5 million. Sales volumes climbed 11% to 110,314 tons.
Launched on November 12, 2002, the fund holds a 100% ownership interest in Richmond, BC-based Tree Island Industries Ltd., which produces fasteners and other wire products. ©2012 GlobalFastenerNews.com
Related Stories:
• STOCKS: Fastenal In the Blue-Black
• FDI: Fastener Demand and Confidence “Fading”
Related Links:
Share: