Dominion Citrus Limited
TSX : DMN
TSX : DMN.PR.A

Dominion Citrus Limited

November 14, 2005 18:32 ET

Dominion Citrus Limited Announces Proposed Income Trust Conversion and Schedules Special Meetings of Shareholders

TORONTO, ONTARIO--(CCNMatthews - Nov. 14, 2005) - Dominion Citrus Limited (TSX:DMN)(TSX:DMN.PR.A) ("Dominion", the "Company") announced today that its Board of Directors has unanimously approved a plan to convert the Company into a publicly traded income trust to be called the "Dominion Citrus Income Fund" (the "Trust"). The Board (the members of which are also expected to be the initial trustees of the new Trust) approved an initial distribution policy for the Trust pursuant to which the initial distribution is expected to be set at approximately $0.12 per unit. Distributions will be paid on a monthly basis commencing the first full calendar month following closing of the conversion, although there can be no assurance that the initial distribution rate will be maintained at this level over time.

The income trust conversion will be undertaken through a plan of arrangement under the Business Corporations Act (Ontario) (the "Arrangement") and will be subject to a number of conditions, including the approval of the Ontario Superior Court of Justice, the approval of two-thirds of the votes cast by common shareholders at a special meeting expected to be held on December 22, 2005, and the receipt of all required regulatory approvals including that of The Toronto Stock Exchange. While there can be no assurance that these conditions will be satisfied, assuming that they are, it is expected that the closing of the proposed transaction will occur on or about January 1, 2006.

Immediately preceding the Company's planned special meeting of common shareholders, the Company plans to hold a meeting of its Series A preference shareholders to authorize an amendment to the provisions attaching to such shares to permit an optional conversion into Units of the Trust at a conversion rate of 1.607143 Units of the Trust for each Series A Preference Share. The completion of the Arrangement is not conditional upon the approval of these proposed amendments to the Series A preference shares. In addition, holders of the Company's outstanding Series A Debentures have approved an amendment to the terms thereof to permit an optional conversion into Units of the Trust at 771.684 Units per $1,000 principal amount of Series A Debentures held to replace the existing common share conversion right. The conversion of all outstanding Series A Preference Shares and Series A Debentures would result in the issuance of up to an additional 5,445,715 Units of the Trust. In addition, the terms of all outstanding options granted pursuant to the Company's existing employee stock option plan will be amended to provide that such options may be exercised by the holders thereof into units of the Trust. These amendments are also subject to the receipt of all necessary regulatory and Toronto Stock Exchange approvals and shall become effective after the effective date of the Arrangement.

The Board of Directors has unanimously concluded that the Arrangement is in the best interests of Dominion and its shareholders and recommends that both its common and preferred shareholders approve these transactions respectively. A management information circular will be distributed to shareholders in advance of the meetings of shareholders and filed on www.sedar.com. Such information circular will contain the full particulars of the transaction, the calculation of the Trust's anticipated distributable cash and voting procedure.

The Board of Directors has received an opinion from Canaccord Capital Corporation, a registered member of the Investment Dealers' Association of Canada, that as at the date thereof and subject to the assumptions, limitations and qualifications contained therein, the consideration to be received by common shareholders pursuant to the Arrangement is fair, from a financial point of view, to such shareholders. The fairness opinion should be read in its entirety and a copy thereof will be reproduced in the management information circular.

The conversion will be a taxable transaction. Generally, shareholders will be deemed to have disposed of their shares, resulting in either a capital gain or a capital loss, for tax purposes. The management information circular will contain more detailed disclosure concerning the tax consequences of the conversion, however shareholders are urged to consult their own financial and tax advisors with respect to their specific tax consequences.

About Dominion

Dominion is a diversified food company supplying fresh produce, premium juices and maple syrup to a wide variety of customers in retail, foodservice and food distribution businesses. The Company provides procurement, processing, repacking, sorting, grading, warehousing and distribution services to over 400 customers, with its major domestic markets being Ontario and Quebec. The Company also supplies products to customers in the United States and Europe. The website may be accessed at www.dominioncitrus.com.

Caution regarding Forward-Looking Statements

This release contains statements, which, to the extent that they are not a recitation of historical fact, may constitute "forward-looking statements". Forward-looking statements may include financial and other projections, as well as statements regarding our future plans, objectives or performance, or our underlying assumptions. The words "estimate", "anticipate", "believe", "expect", "intend" or other similar expressions of future or conditional verbs such as "will", "should", "would" and "could" are intended to identify forward-looking statements. Persons reading this press release are cautioned that such statements are only expectations, and that our actual results or performance may be materially different.

Forward-looking information involves certain risks, assumptions, uncertainties and other factors, which may cause actual future results to differ materially from those expressed or implied in any forward-looking statements. Readers are also directed to the Management Information Circular which outlines risks and uncertainties.

Readers should not place undue reliance on these forward-looking statements when making decisions, and should consider the date onto which the statements were made. Except as required by applicable security law, management disclaims any intention or obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Contact Information

  • Dominion Citrus Limited
    E. A. Atkinson
    VP Finance, CFO & Corporate Secretary
    (416) 242-8341 ext. 249
    or
    Dominion Citrus Limited
    J. L. Lavergne
    President & CEO
    (416) 242-8341 ext. 250