November 14, 2008 08:00 ET

Eveready Income Fund Announces Meeting Date and Provides Additional Details on Conversion Into a Growth Oriented, Dividend Paying Corporation

EDMONTON, ALBERTA--(Marketwire - Nov. 14, 2008) - On September 11, 2008, Eveready Income Fund ("Eveready" or the "Fund") (TSX:EIS.UN) announced its intention to convert into a growth oriented, dividend paying corporation, subject to the receipt of all necessary unitholder, court and regulatory approvals. Eveready is pleased to announce further details with respect to the proposed conversion.

The Meeting

On December 11, 2008 at 2:00 p.m. (Edmonton time) at the Mayfield Inn and Suites located at 16615 - 109 Avenue in Edmonton, Alberta, Eveready will hold a special meeting (the "Meeting") of:

(a) holders ("Unitholders") of units ("Units") of Eveready Income Fund (the "Fund");

(b) holders ("Holdings LP Unitholders") of class B limited partnership units ("Holdings LP Units") of Eveready Holdings Limited Partnership; and

(c) holders ("Acquisition LP Unitholders") of class C limited partnership units ("Acquisition LP Units") of Acquisition Limited Partnership.

Collectively, the Units, Holdings LP Units and Acquisition LP Units are referred to herein as the "Eveready Securities" and the Unitholders, Holdings LP Unitholders and Acquisition LP Unitholders are referred to herein as the "Eveready Securityholders".

At the Meeting, Eveready Securityholders will be asked to consider, among other matters, the Fund's proposed conversion to a corporate structure by way of a plan of arrangement (the "Conversion") involving, among others, the Fund, Eveready Inc. ("Successor Corporation"), and the Eveready Securityholders.

A management information circular, providing further information with respect to the Conversion, will be mailed to Eveready Securityholders, and filed electronically on SEDAR at www.sedar.com on or about November 14, 2008. All summaries of, and references to, the Conversion in this press release are qualified in their entirety by reference to the complete text of the aforementioned management information circular. Investors are urged to carefully read the full text of that management information circular.

Effect of the Conversion

If approved, the Conversion will result in a reorganization of the Fund's income trust structure into a growth oriented, dividend paying corporation to be named Eveready Inc. ("Successor Corporation"), the Eveready Securityholders will own 100% of the shares of Successor Corporation (the "Shares") and Successor Corporation will own 100% of the Units.

Pursuant to the Conversion, Eveready Securityholders will receive one Share for each five Eveready Securities held, as at the effective date of the Conversion (the "Effective Date"). The Fund expects the Effective Date will be on or about December 31, 2008. It is not possible, however, to state with certainty when the Effective Date will occur.

Further, pursuant to the Conversion, Successor Corporation will assume all of the covenants and obligations of the Fund including the outstanding convertible debentures (the "Debentures") of the Fund. Upon completion of the Conversion, in which each five Eveready Securities are to be exchanged for one Share, the Debentures will be convertible at the holder's option into fully paid and non-assessable Shares at any time before the close of business on June 30, 2011 at a conversion price of $38.754 per Share (subject to adjustment in certain events).

The executive management and board of directors of Successor Corporation will be comprised of the current members of Management and the Board.

Certain Canadian Federal Income Tax Considerations

This summary is of a general nature only and should not be construed, nor is it intended to be, legal or tax advice or representations to any particular Eveready Securityholder. Accordingly, an Eveready Securityholder should consult with its own tax advisor for advice with respect to the income tax consequences to it in its particular circumstances.

An Eveready Securityholder resident in Canada for the purposes of the Income Tax Act (Canada) who holds Eveready Securities as capital property and disposes of them in exchange for Shares will generally realize a capital gain or capital loss equal to the amount by which the fair market value of the Shares received on the disposition of the Eveready Securities in exchange for Shares is greater or less than the aggregate of the adjusted cost base of the Eveready Securities disposed of and any reasonable costs incurred by the Eveready Securityholder in connection with the disposition.

Eveready Securityholders who wish to defer all or a portion of a capital gain on the disposition of their Eveready Securities must make a joint election with Successor Corporation under Section 85 of the Tax Act in respect of their Eveready Securities.

Non-resident Unitholders for whom Units are taxable Canadian property should consult their own tax advisors with respect to the tax consequences to them of the disposition of their Units in exchange for Shares.

Dividend Policy

Eveready reiterates its intention to declare a cash distribution of $0.04 per Unit ($0.16 per Unit on an annualized basis) for the fourth quarter of 2008. Upon completion of the Conversion, in which each five Eveready Securities are to be exchanged for one Share, it is anticipated that Successor Corporation will pay a quarterly dividend of $0.20 per Share ($0.80 per Share on an annualized basis) with the first quarterly dividend anticipated to be declared to Shareholders of record on March 31, 2009.

Recommendation of the Board

The Board, based upon its own investigations, has unanimously concluded that the Conversion is fair to Eveready Securityholders and is in the best interest of the Fund and Eveready Securityholders. As such, the Board recommends that Eveready Securityholders vote in favour of the resolution approving the Conversion and other related matters.

Approvals Required

The Conversion must be approved by not less than 66 2/3% of the votes cast by Eveready Securityholders voting together as a single class in person or by proxy at the Meeting. The Conversion is also subject to the approval of the Court of Queen's Bench of Alberta and receipt of all necessary regulatory approvals, including the approval of the Toronto Stock Exchange ("TSX").

The TSX has conditionally approved the substitutional listing of the Shares to be issued pursuant to the Conversion, subject to Successor Corporation fulfilling the requirements of the TSX.

The TSX has also conditionally approved the substitutional listing of the Debentures to be assumed by Successor Corporation pursuant to the Conversion and has further conditionally approved the additional listing of the Shares to be reserved for issuance on conversion, on redemption or maturity of the Debentures, subject in each case to Successor Corporation fulfilling the requirements of the TSX.

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 79 locations in Canada, the United States, and internationally, Eveready currently employs over 2,800 employees and operates a service fleet of over 2,400 truck and trailer units. Eveready is a leading provider of infrastructure services in Alberta's oil sands sector. The Units trade on the TSX under the trading symbol "EIS.UN" and the Debentures trade on the TSX under the trading symbol "EIS.DB".

Forward-looking Statements

This press release contains forward-looking statements subject to various risk factors and uncertainties, which may cause the actual results, performances or achievements of Eveready to be materially different from any future results, performances or achievements expressed or implied by such forward-looking statements. Such factors include, but are not limited to, the need for applicable approvals from Eveready Securityholders, the TSX and the Court, the receipt of various third party consents including Eveready's lenders, fluctuations in the market for oil and gas and related products and services, political and economic conditions, the demand for services provided by Eveready, industry competition and Eveready's ability to attract and retain both customers and key personnel.

Further, investors are cautioned that quarterly distributions or dividends are always subject to approval of Eveready's board of trustees, or the board of directors of Successor Corporation after giving effect to the Conversion, and may be increased, decreased or suspended by such board at any time.

Contact Information

  • Eveready Income Fund
    Rod Marlin
    President & CEO
    (780) 451-6075
    (780) 451-2142 (FAX)
    Eveready Income Fund
    Jason Vandenberg
    (780) 451-6075
    (780) 451-2142 (FAX)
    Website: www.evereadyincomefund.com