EVEREADY INCOME FUND
TSX : EIS.UN

EVEREADY INCOME FUND

March 13, 2008 08:00 ET

Eveready Income Fund Announces 2008 Q1 Distribution

EDMONTON, ALBERTA--(Marketwire - March 13, 2008) - Eveready Income Fund ("Eveready") (TSX:EIS.UN) announces that the board of trustees of Eveready has declared an "in-kind" distribution of $0.18 per Fund Unit for the first quarter of 2008 ($0.72 per Fund Unit on an annualized basis). The distribution will be made on or about April 15, 2008 to unitholders of record as of the close of business on March 31, 2008. Distributions settled "in-kind" means that unitholders will receive additional Fund Units instead of cash. "In-kind" Fund Units will be issued at a deemed price equal to the volume-weighted average price of all Fund Units traded on the Toronto Stock Exchange on the ten trading days preceding March 31, 2008, such date being the applicable record date for the "in kind" distribution. Once the number of Fund Units and the deemed price at which those Fund Units will be issued pursuant to the "in-kind" distribution is determined, a press release will be issued advising of these facts.

This quarterly "in kind" distribution is Eveready's first distribution since announcing in January 2008 that it had amended its distribution policy to maximize the retention of operating cash flow to re-invest in growth. Eveready has replaced its former monthly cash distribution of $0.06 per Fund Unit ($0.72 per Fund Unit on an annualized basis) with a quarterly "in-kind" distribution of $0.18 per Fund Unit ($0.72 per Fund Unit on an annualized basis).

Holders of rollover limited partnership units of subsidiaries of Eveready Income Fund that are the economic equivalent of Fund Units will continue to receive the equivalent economic treatment as holders of Fund Units, including the payment of any corresponding distribution to such unitholders with "in kind" Fund Units. Fractions of Fund Units will not be issued but instead will be paid in cash.

Unitholders are reminded that, in conjunction with implementing the new distribution policy, Eveready has cancelled its Distribution Reinvestment Plan.

Investors are cautioned that quarterly distributions are always subject to approval of Eveready's board of trustees and may be increased, decreased or suspended by the board of trustees at any time. Also, at the discretion of Eveready's board of trustees, quarterly distributions may be payable in cash and/or via the distribution of "in kind" Fund Units.

Canadian Tax Treatment of "In-kind" Distributions

The following information is based on Eveready's understanding of the Income Tax Act (Canada) and is provided as general information only. This information is not exhaustive of all possible income tax considerations under the Income Tax Act (Canada) or other applicable legislation and is not intended to be legal or tax advice to any particular holder of Fund Units. Unitholders or potential unitholders should consult their own legal, business and/or tax advisors as to the tax implications of holding Fund Units in their particular circumstances.

In general, an "in-kind" distribution of Fund Units to a Canadian resident will be treated as income for income tax purposes (and is subject to Canadian income tax). Each Fund Unit received will have a cost base to the unitholder of an amount equal to the fair market value of the Fund Unit at the time of the distribution. If a unitholder holds his or her Fund Units in an RRSP, RRIF, DPSP, or RESP, no amount is required to be reported by the unitholder as income. An "in-kind" distribution to a U.S. resident is subject to Canadian withholding tax of 15%. Taxable U.S. resident unitholders may be able to claim a foreign tax credit for the Canadian withholding tax. Non-resident unitholders should consult their own legal, business, and/or tax advisors as to the tax implications of holding Fund units in their particular circumstances.

Adjustment to the Conversion Price of the Debentures

Eveready currently has an aggregate principal amount of $50,000,000 of 7% convertible unsecured subordinated debentures ("Debentures") outstanding. The Debentures trade on the Toronto Stock Exchange under the symbol "EIS.DB". The Debentures are convertible, at the holder's option, into Fund Units of Eveready. The initial conversion price for the Debentures was $8.50 per Fund Unit (the "Conversion Price"). However, the Conversion Price is subject to adjustment upon the occurrence of certain events including events such as an "in-kind" distribution of Fund Units. The purpose of the adjustment is to prevent dilution to the holders of Debentures arising from such events. Once the number of Fund Units and the deemed price at which those Fund Units will be issued pursuant to the "in-kind" distribution is determined, a press release will be issued advising of the resulting adjustment to the Conversion Price.

About Eveready

Eveready is a growth oriented income fund that provides industrial and oilfield maintenance and production services to the energy, resource, and industrial sectors. Operating from over 75 locations in Canada, the United States, and internationally, Eveready currently employs over 2,500 employees and operates a service fleet of over 1,000 trucks. Eveready is a leading provider of infrastructure services in Alberta's fast growing oil sands sector. The Fund Units of Eveready trade on the Toronto Stock Exchange under the trading symbol "EIS.UN".

Contact Information

  • Eveready Income Fund
    Rod Marlin
    President & CEO
    (780) 451-6075
    (780) 451-2142 (FAX)
    or
    Eveready Income Fund
    Darren Stevenson
    CFO
    (780) 451-6075
    (780) 451-2142 (FAX)
    Website: www.evereadyincomefund.com