TRIMAC INCOME FUND ANNOUNCES CONVERSION

Oct 07, 2010, 19:37 ET from Trimac Income Fund

CALGARY, Oct 7 /PRNewswire-FirstCall/ - Trimac Income Fund (TSX Symbol TMA.UN) announced today that the board of directors of Trimac Transportation Services Inc. (TTSI), as administrator of the Fund, has approved a process for the conversion of the Fund from a trust structure to a corporation by way of arrangement under the Alberta Business Corporations Act. Under the arrangement, proposed to become effective on or about January 1, 2011, it is expected that Units of the Fund will be exchanged for Class A Common Shares of a new corporation, to be known as Trimac Transportation Ltd. (New Trimac), on a one for one basis and that the exchangeable shares in TTSI will be exchanged into Class A Common Shares or Class B Convertible Voting Shares of New Trimac based upon the exchange ratio in effect on the effective date of the arrangement. Holders of the exchangeable shares are currently entitled to exchange the shares for Units based upon the exchange ratio from time to time in effect. The proportionate economic interest in Trimac Transportation Services Limited Partnership (Trimac) held by the holders of such exchangeable shares and unitholders of the Fund will not be affected by the conversion.

The board of directors of TTSI assessed the viability of maintaining the Fund's current trust structure in view of the change to the income tax treatment of specified investment flow-through trusts which will become effective on January 1, 2011 and concluded that it would be in the best interests of the Fund, its unitholders and the holders of the exchangeable shares to convert the Fund from an income trust structure to a corporation.

Subsequent to conversion, it is anticipated that New Trimac will pay an annual dividend on the Class A Common Shares of $0.25, payable on a quarterly basis. Any decision to declare and pay dividends in the future will be made at the discretion of the board of directors of New Trimac and will depend on, among other things, New Trimac's results of operations, financial condition, cash flows, its current and anticipated capital requirements and solvency tests imposed by the Alberta Business Corporations Act as well as other factors that the board of directors deems relevant.

The Class B Convertible Voting Shares are convertible into Class A Common Shares based on the conversion ratio from time to time in effect; are entitled to one vote per share at all meetings of shareholders; are not entitled to dividends but on payment of a dividend on Class A Common Shares, the conversion ratio will be adjusted in lieu of the dividend.

Unitholders and holders of exchangeable security voting rights of the Fund will be asked to approve the conversion at a special meeting of the Fund to be held on or about December 10, 2010. In addition, the conversion will be conditional on the approval of the Alberta Court of Queen's Bench, the listing of the Class A Common Shares of New Trimac on the Toronto Stock Exchange (TSX) and other customary conditions to this type of transaction. Full details of the proposed conversion will be contained in the Information Circular of the Fund for the special meeting, which the Fund expects to circulate on or about November 16, 2010.

Forward-Looking Statements

This news release contains forward-looking statements.  The statements relate to future events or future performance and reflect management's current expectations and assumptions.  The words "anticipate", "expect", "believe" and "may", or similar words, are used to identify such forward-looking information. In particular, but without limitation, this news release contains forward-looking statements relating to: the timing of the effective date of the conversion, the satisfaction of conditions for completion of the conversion, including but not limited to conditions for listing the New Trimac Class A Common Shares on the TSX, and the potential for payment of dividends by New Trimac following completion of the conversion. 

The forward-looking statements included in this news release reflect management's current beliefs and are based on information currently available to management of the Fund, in particular, forward-looking statements relating to the potential payment of dividends by New Trimac are based on: the financial and operating attributes of the Fund and Trimac as of the date hereof, the anticipated operating and financial results of New Trimac after the effective date, the views of management and the board of directors of TTSI regarding the benefits associated with conversion, and the views of management and the board of directors of TTSI regarding current and anticipated business conditions.

Although management believes the expectations represented in such forward-looking statements are reasonable, there is no assurance that such expectations will prove to be correct.  By their very nature, forward-looking statements involve inherent risks and uncertainties (both general and specific) and the risk that expectations represented in such forward-looking statements will not be achieved.  Undue reliance should not be placed on forward-looking statements as a number of important factors could cause the actual results to differ materially from the beliefs, plans, expectations, anticipations, estimates and intentions expressed in the forward-looking statements.  These factors include, among other things: changes in laws and regulations affecting the Fund and Trimac, changes in taxation of the Fund or Trimac, general business conditions and economic conditions of the markets in which Trimac operates, the failure of the unitholders  and holders of exchangeable security voting rights to approve of the plan of arrangement, the failure of the parties to the proposed conversion of the Fund from a trust structure to a corporation by way of plan of arrangement to satisfy the conditions thereof, the inability to meet TSX listing requirements, and the inability to obtain the approval of the Alberta Court of Queen's Bench for the conversion. The foregoing list is not exhaustive.

Additional information on the foregoing factors and other factors which may affect the Fund's operation or financial results and those of Trimac are included under the "Risk Factors" in the Fund's current Annual Information Form as may be updated in the Fund's annual and interim management's discussion and analysis filed subsequent to the current Annual Information Form, which are or will be filed with securities regulators and which are available on SEDAR at www.sedar.com. The forward-looking statements contained herein are made as of the date of this news release and the Fund undertakes no obligation to publicly update such forward-looking statements to reflect new information, subsequent events or otherwise, unless so required by applicable securities laws. The forward-looking statements contained in this news release are expressly qualified in their entirety by the foregoing cautionary statement.

Information Concerning the Fund

The Fund is an unincorporated, open-ended limited purpose trust created for the purpose of acquiring and holding an indirect interest in Trimac. 

Trimac is Canada's largest provider of bulk trucking services with operations from coast to coast.  In addition, through its National Tank Services division, Trimac performs repairs, maintenance and tank-trailer cleaning services for both the Trimac fleet and for third party commercial customers. Trimac also provides third party transportation logistics services in Canada and the United States through its wholly owned subsidiary Bulk Plus Logistics.  Trust units of Trimac Income Fund are traded on the Toronto Stock Exchange under the symbol TMA.UN.


SOURCE Trimac Income Fund