TORONTO, ONTARIO--(Marketwired - March 28, 2014) - The board of trustees (the "Trustees") of Dominion Citrus Income Fund ("DCIF" or the "Trust") (TSX:DOM.UN) announces that the Trust has commenced a strategic review process with a view to maximizing unit holder value pursuant to which it will open discussions with third parties to solicit interest in one or a number of alternatives, including but not limited to:
- Purchasing from the Trust all or a portion of its Participating Notes of Dominion Citrus Limited ("DCL");
- Purchasing from the Trust its common share ownership in DCL; or,
- Providing financing for the Trust to pursue a going private transaction.
The Trustees have thoughtfully considered the existing structure of the Trust and concluded that it is a costly and inefficient set up designed for the period when Income Trusts were common in Canada and before changes in legislation that limited their usefulness. Given the units of the Trust trade infrequently and do not pay current distributions, the Trustees have concluded that it is not in the best interests of the unit holders to continue in the current form indefinitely. The Trust has no sources of income while interest is deferred but the Trust continues to incur expenses including listing, audit, custodial fees, Trustees fees and legal advice, among others.
The Trust holds three assets:
- 100% of the common shares of DCL
- 100% of the Participating Notes of DCL; and,
- An agreement with DCL pursuant to which the Trust has the option of purchasing from DCL all of the shares of Dominion Farm Produce Ltd., a wholly owned subsidiary of DCL.
The Trustees believe that a strategic review might surface third parties able to assist in a restructuring of the Trust to reduce costs, or provide sponsorship for the return to profitability of DCL.
There is no assurance that a strategic review will be successful or that any transaction will result. The Trust's on-going food distribution business will not be affected during this process.
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 Series A preference shares of DCL are listed on the TSX under the symbol DMN.PR.A.
Dominion is a diversified food company supplying fresh produce to a wide variety of customers in retail, foodservice and food distribution businesses. Dominion 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. The Fund's website may be accessed at www.dominioncitrus.com.
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 DCIF's or DCL's future performance, including the exercise of the Option, redemption of Notes and the ability of DCL to make interest payments. 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 DCIF's and DCL's business, including those described in DCIF's most recent annual information form filed on SEDAR at www.sedar.com. Any forward-looking statements speak only as of the date of this press release, and DCIF assumes 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.