Dominion Citrus Income Fund
TSX : DOM.UN

Dominion Citrus Income Fund

May 12, 2016 08:01 ET

Dominion Citrus Income Fund Announces Trustees' Unanimous Approval of Proposed Purchase of Assets by Paul Scarafile

TORONTO, ONTARIO--(Marketwired - May 12, 2016) - Dominion Citrus Income Fund (TSX:DOM.UN) (the "Fund") announces today that its Board of Trustees has unanimously approved the proposal (the "Scarafile Proposal") by Paul Scarafile, CEO of Dominion Citrus Limited (the "Company" or "DCL"), or his nominee, to acquire all of the assets of the Fund for an aggregate purchase price of $10,805,070 (see previously issued press releases dated January 12, 2016 and February 26, 2016). The Trustees have reviewed and considered all of the options available to them in respect of the unpaid $19,258,000 Participating Notes owed by the Company to the Fund, including restructuring of the Participating Notes and remedies of foreclosure and liquidation, have reviewed the latest inputs on valuation from Klein Farber Corporate Finance Inc. ("Klein Farber"), and have determined that, in their reasonable best judgment, the Scarafile Proposal represents the best alternative for the unitholders of the Fund (the "Unitholders"). The Scarafile Proposal is conditional upon the successful negotiation and execution and delivery of an agreement between the parties (the "Definitive Agreement"). The Trustees have indicated that all substantive terms of the Definitive Agreement have been fully negotiated and the Trustees anticipate that it will be signed by all parties in the next few days, following which it will be posted on SEDAR at www.sedar.com under the Fund's profile.

The Fund expects to call a Special Meeting of Unitholders as soon as practicable to approve the Scarafile Proposal. In such case, an Information Circular would be provided to Unitholders, which Circular would include the details of the Scarafile Proposal, the Definitive Agreement, or a summary thereof, and the Klein Farber valuation.

If the Scarafile Proposal is approved by the Unitholders and completed, the Fund would cease to have any active business operations and its assets would consist solely of cash or promissory notes due from Paul Scarafile, or his nominee, in the aggregate amount of approximately $10,000,000. The Fund at that time would have no net liabilities. The current intention of the Trustees would be that the Fund distribute its assets to Unitholders as part of a winding up of the Fund.

While the Trustees believe it is in the best interests of the Fund to enter into the Scarafile Proposal, there can be no assurance the transaction will close in the manner specified herein or at all.

About Dominion

The Fund is a publicly traded, unincorporated, open-ended limited purpose income trust. On January 1, 2006, all of the common shares of DCL were exchanged for trust units of the Fund. The trust units are listed on the TSX under the symbol DOM.UN. The Fund's website may be accessed at www.dominioncitrus.com.

DCL is a diversified food company supplying fresh produce to a wide variety of customers in retail, foodservice and food distribution businesses. DCL provides procurement, processing, repacking, sorting, grading, warehousing and distribution services to its major domestic markets being Ontario and Québec. Dominion also supplies products to customers in the United States.

Cautionary Statement Regarding Forward Looking Information and Statements

Certain statements contained in this press release contain "forward-looking information" pursuant to Canadian securities laws ("forward-looking statements"). Forward-looking statements relate to future events or the Fund's or DCL's future performance. All statements other than statements of historical fact are forward-looking statements. The use of any of the words "anticipate", "plan", "contemplate", "continue", "estimate", "expect", "intend", "propose", "might", "may", "will", "shall", "project", "should", "could", "would", "believe", "predict", "forecast", "pursue", "potential" and "capable" and similar expressions are intended to identify forward-looking statements. These forward-looking statements may be affected by the risks and uncertainties in the Fund's and DCL's businesses, including those described in the Fund's and DCL's most recent annual information form filed on SEDAR at www.sedar.com. The forward-looking statements in this press release include statements about the completion of the Definitive Agreement, the Klein Farber valuation, the proposed meeting of Unitholders, the approval by the Unitholders of the Scarafile Proposal and the proposed winding up of the Fund and the distribution of its assets to the Unitholders. The Scarafile Proposal is still subject to completion of the Agreement and of satisfactory due diligence and to approval of the Unitholders. Any forward-looking statements speak only as of the date of this press release, and the Fund and DCL assume no obligation to update or revise any forward-looking statement to reflect events or circumstances arising after the date of this press release except as required by applicable securities laws.

No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein.

Contact Information

  • Peter McLaughlin
    Chairman Board of Trustees
    Dominion Citrus Income Fund
    416-802-2367