Drive Products Income Fund

Drive Products Income Fund

March 25, 2010 10:39 ET

Board, Trustees and Management Continue Review of Future Options Available for Drive Products Income Fund

TORONTO, ONTARIO--(Marketwire - March 25, 2010) - The Board, Trustees and Management of Drive Products Income Fund (the "Fund") (TSX:DPI.UN) confirmed today that they continue to review all options available to the Fund at this time. In light of the federally proposed changes to the taxation of flow-through entities, the Board and Management of the Fund will continue to review such options, including:

  1. Converting to a corporation before December 31, 2011. The benefits of converting to a corporation include a simplified corporate structure, easier access to capital and greater comparability to corporate peers. The Federal Government's "Conversion Rules" will facilitate the transition of income trusts to taxable corporations without creating adverse tax consequences for the Fund or unitholders of the Fund. However, professional fees associated with the conversion could be significant and given the size of the Fund, may be an impediment to conversion.

  2. Continuing post-December 31, 2011 as a taxable trust. As noted above, the professional fees associated with the conversion could be significant. Given the size and market capitalization of the Fund, along with its recent business performance, it may be prudent to forgo these fees at this time and continue to operate as a trust.

  3. Merging with another public trust or corporation. A merger will be considered by the Board and Management if a potential transaction arises.

  4. Going Private Transaction. This option would entail the purchase of all of the public trust units by a private company. Management could participate in such a transaction either as purchaser or seller. The purchase price would be based on a valuation reviewed and approved by the Board. The Fund's capital structure consists of 6,889,365 public trust units and 6,360,418 Class B LP units. Each trust unit and Class B LP unit is entitled to one vote at all meetings of the unitholders of the Fund. Management currently controls 809,200 public trust units and all of the Class B LP units, or 54.1% of the Fund.

Forward-Looking Statements

This press release contains forward-looking statements relating to expected future events and financial and operating results of the Fund. These statements involve risks and uncertainties. Actual results may differ materially from those anticipated by such forward-looking statements for a variety of reasons, including market and general economic conditions and the risks and uncertainties detailed from time to time in the Fund's continuous disclosure documents filed with the Canadian securities regulatory authorities. The Fund disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by applicable law.

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