FP Newspapers Inc.
TSX : FP

July 19, 2011 18:34 ET

FP Newspapers Inc. Announces Monthly Dividend-July 2011 and Winnipeg Pension Update

WINNIPEG, MANITOBA--(Marketwire - July 19, 2011) - FP Newspapers Inc. (TSX:FP) today announced a cash dividend of $0.05 per share, payable on August 31, 2011 to shareholders of record at the close of business on July 29, 2011.

All dividends paid by the Company in 2011 and subsequent years, unless stated otherwise, are designated to be eligible dividends pursuant to subsection 89(14) of the Income Tax Act (Canada) and any applicable provincial legislation pertaining to eligible dividends. Holders of shares who are non-residents of Canada will be required to pay all withholding taxes payable in respect of the dividend.

An actuarial funding valuation report on the defined benefit pension plan covering the majority of Winnipeg employees is in the process of being finalized for filing with the Manitoba Pension Commission prior to September 30, 2011. The report is showing required solvency deficiency payments starting in 2011 of $1.5 million per year which is an increase of $1.2 million from the solvency deficiency payments made in 2010 of $0.3 million. The increased solvency deficiency is primarily the result of three factors; lower than expected investment returns since the last funding valuation study on December 31, 2007, declining bond yields which increase the present value of plan obligations and an increase in the average age of active employees covered under the plan. Under Manitoba pension regulations, solvency deficiencies must be funded over a five year period, unless pension solvency relief is being requested from plan members, which extends this payment period to 10 years. Winnipeg management will be sending the required disclosures to plan members in order to seek an extension for the solvency deficiency payments which is obtained if fewer than one-third of current plan members, former plan members and any other persons entitled to benefits under the plan object to the proposal. The deadline for receiving objections is August 22, 2011.

FP Newspapers Inc. owns securities entitling it to 49% of the distributable cash of FP Canadian Newspapers Limited Partnership. FP Canadian Newspapers Limited Partnership owns the Winnipeg Free Press, the Brandon Sun, and their related businesses, as well as the Canstar Community News division, the publisher of eight community and special interest newspapers in the Winnipeg region, and the Carillon in Steinbach with its related commercial printing operations. The Winnipeg Free Press publishes six days a week for delivery to subscribers and single copy sales, serving Winnipeg and Manitoba with an average Monday through Saturday circulation of approximately 123,300 copies. On Sundays the Winnipeg Free Press publishes a newspaper sold through single-copy retail outlets and vending boxes. The Brandon Sun publishes seven days a week, serving the region with an average circulation of approximately 15,000 copies. Canstar Community News publishes weekly with an average circulation of approximately 200,000 copies. The businesses employ approximately 570 people in Winnipeg, Brandon and Steinbach. Further information can be found at www.fpnewspapers.com, and in the disclosure documents filed by FP Newspapers Inc. with the securities regulatory authorities, available at www.sedar.com.

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