This is exactly the structure that Catalyst proposed to BCE as the means to maximize shareholder value rather than pursue the leveraged buyout from Teachers' and US private equity. BCE, intent on enriching management by going private, failed to disclose this Catalyst alternative to its shareholders, which is against security disclosure rules.
WTE to convert, issuing shares and a debt instrument, combined as unit
Westshore Terminals to convert to corporate structure from income fund
Tue Sep 14, 8:28 PM
The Canadian Press
VANCOUVER - Westshore Terminals Income Fund (TSX: WTE-UN.TO) said Tuesday that it plans to convert from an income fund to a corporate structure at the start of next year.
Under the plan, which requires unitholder approval, unitholders will receive a combination of shares and debt in exchange for their Units.
The shares will be issued by a newly formed public company, while the debt, in the amount of $5 per existing unit, will be issued in the form of notes that will mature in 2040.
The shares and debt will be separate, but will be listed and trade together as units.
Like many income trusts, Westshore is making the switch because of new tax rules taking full effect on Jan. 1, 2011, that eliminate tax advantages they previously enjoyed.
The fund also announced Tuesday that it would pay a distribution of 46 cents per unit to unitholders of record at Sept. 30.mes from Westshore's cash reserves.
For the third quarter, Westshore said it expects tonnage throughput will be approximately 6.3 million tonnes compared with 5.4 million tonnes for the same period in 2009.
Units in the fund closed up 15 cents at $20.12 on the Toronto Stock Exchange on Tuesday.
Wednesday, September 15, 2010
As Catalyst proposed to BCE, but BCE failed to disclose to its shareholders.
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2 comments:
Brent am I missing something here? As I watch the Income Trusts convert to corporations it seems the investors are getting screwed. If trusts don't convert, Flaherty rips you off with the 31.5% tax. Those Trusts that do (or plan to) convert to corporations have drastically reduced their dividends. So either way the investors get the shaft. Flaherty was going to take 31.5% but quite a few trusts have already taken over 40% or more from their shareholders. Some justice!
Good one with the hoover comment!
Can't say any of my dividends have increased since this ridiculous tax was proposed. Also a big mess to keep track of everything ... since income levels are at an all time low for our household - I am thinking maybe we should move some of our trusts that will not be converting to corps., into our TFSAs ... I like the idea of having easier access to our money ... gotta start saving somehow for strike 2013. Or pay off some bills from Strike 2010 - 5 months!
As far as I can tell, besides foreigners - Cdn private co.'s, and especially big pension plans seem to be benefiting at the expense of retail investors and of course Cdn tax payers.
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