PRT Forest Regeneration Income Fund

PRT Forest Regeneration Income Fund

October 03, 2007 20:33 ET

Trustees of PRT Forest Regeneration Income Fund Announce Internalization of Management

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Oct. 3, 2007) - PRT Forest Regeneration Income Fund ("PRT" or the "Fund") (TSX:PRT.UN) announced today that it executed a definitive agreement providing for the internalization of its management through the acquisition of PRT Management Inc. ("PMI"), the Fund's external manager. The transaction will be completed by way of amalgamation of PMI with a newly-incorporated, wholly-owned subsidiary of the Fund's operating subsidiary (the "Amalgamation").

Consideration for the acquisition of PMI is $375,000 cash, subject to working capital and certain other adjustments, plus 14,000 units of the Fund ("Earn-Out Units"). The Earn-Out Units are issuable on the date the Trustees of the Fund recommend a transaction for the sale of the Fund, any of its subsidiaries, business or assets. The entitlement to the Earn-Out Units expires on January 1, 2010 if no such transaction is recommended by the Trustees by that date, unless the Trustees in their discretion determine that the Earn-Out Units shall be issuable in any event.

The Amalgamation, which is subject to PMI shareholder approval and acceptance of notice by the Toronto Stock Exchange, is expected to close on or about November 1, 2007. Approximately 72% of the shareholders of PMI have entered into agreements to vote in favour of the Amalgamation at the meeting of PMI shareholders convened to approve the Amalgamation.

Following the Amalgamation, the existing external management arrangements will be terminated, resulting in an internalized Fund management structure that more clearly aligns the fiduciary obligations of PRT's management team with the management and operation of the Fund's business.

Colin Dobell, Chairman of the Fund, stated, "We are pleased that the co-operative efforts of the Fund and PMI have enabled a transaction that streamlines the management of the Fund in a way that we believe will be of benefit to all Fund unitholders and employees."

Some cost savings in management will also be realized as a result of the Amalgamation, and employment arrangements with existing PMI employees will be unaffected by the Amalgamation.

CIBC World Markets is currently actively engaged in the Fund's strategic review process, including soliciting a possible sale of the Fund. In addition to providing enhanced governance, the internalization of PRT's management simplifies the management structure of the Fund for any potential buyer, thereby facilitating the current strategic process and simplifying discussions with potential buyers.

About PRT Forest Regeneration Income Fund

The Fund is an open ended, single purpose trust created to own all the common shares and subordinated notes of Pacific Regeneration Technologies Inc. PRT is the largest producer of container grown forest seedlings in North America, operating 15 nurseries in Canada and the USA. The Fund's units are listed for trading on the Toronto Stock Exchange under the symbol PRT.UN.

Forward-Looking Statements

This news release contains forward-looking statements or information within the meaning of applicable securities laws in Canada (collectively referred to as "forward-looking statements"). Statements, other than statements of historical fact, are forward-looking statements and include, without limitation, statements regarding the Fund's strategy, future operations, prospects and plans and objectives of the trustees or of management. The words "anticipates", "believes", "budgets", "could", "estimates", "expects", "may", "might", "plans", "should", "will", "would" and similar expressions are often intended to identify forward-looking statements, which include underlying assumptions, although not all forward-looking statements contain these identifying words. By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and other things contemplated by the forward-looking statements will not occur.

Forward-looking statements in this news release include, but are not limited to, statements about: the closing of the amalgamation with PMI, the Fund's potentially entering into a transaction designed to maximize or enhance unitholder value (a "potential transaction"), and the effect of the Amalgamation on the current strategic review process.

Forward-looking statements in this news release are based on the opinions and estimates of the trustees or of the other parties to which they are attributed at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. These factors include the inherent risks involved in the forest seedling business and in the ability of CIBC World Markets to assist the trustees in evaluating a range of strategic opportunities to maximize or enhance unitholder value. There are no assurances that a transaction will be consummated or that, if completed, such transaction will be accretive to unitholders. Risks applicable to the Fund and its operations are disclosed in the MD&A portion of the annual reports filed by the Fund with the relevant securities regulators.

Although the Fund has attempted to identify the forward-looking statements, the underlying assumptions, and the risks, uncertainties and other factors that could cause actual results or events to differ materially from those expressed or implied in the forward-looking statements, there may be other factors that cause actual results or events to differ from those expressed or implied in the forward-looking statements. The Fund undertakes no obligation to revise or update any forward-looking statements as a result of new information, future events or otherwise, after the date hereof, except as may be required by law.

Contact Information

  • PRT Forest Regeneration Income Fund
    Robert Miller
    VP Finance/CFO
    (866) 553-8733 ext. 227