FP Newspapers Income Fund

FP Newspapers Income Fund

December 14, 2010 18:19 ET

FP Newspapers Income Fund Announces Monthly and Final Distributions and Corporate Conversion

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Dec. 14, 2010) - FP Newspapers Income Fund (TSX:FP.UN) (the "Fund") today announced a distribution of $0.06 per unit for the month of December 2010 to Unitholders of record at the close of business on December 31, 2010. The distribution will be paid in cash on or before January 10, 2011. 

The Fund's Declaration of Trust requires it to distribute all of its taxable income to its Unitholders prior to the end of its taxation year. Accordingly, the Fund also announced a special distribution in the amount of $0.34 per unit to Unitholders of record at the close of business on December 31, 2010. The special distribution will be paid on December 31, 2010 by way of the issuance of additional Fund units, based on the market price per unit on that date. Immediately after the special distribution, the number of outstanding units will automatically be consolidated so that each Unitholder will hold exactly the same number of units after the consolidation as that Unitholder held immediately prior to the special distribution. 

In general, taxable Canadian residents who hold units will be required to include in income the amount of the special distribution of units to the extent it constitutes net income of the Fund, and the amount of the special distribution will be added to the adjusted cost base of the units held. Unitholders who are non-residents of Canada are required to pay all withholding taxes payable in respect of distributions by the Fund. The payment of the December cash distribution of $0.06 is being accelerated to facilitate the payment of such withholding taxes. Comments on the tax implications of the special unit distribution are provided as general information only. They are not intended to be legal or tax advice to any Unitholder. All Unitholders should consult legal, business and tax advisors about the implications of the special distribution of units. 

The Fund also confirmed today that effective December 31, 2010, it will convert to a corporate structure under a plan of arrangement previously approved by the Fund's Unitholders and the British Columbia Supreme Court. The arrangement, which will take effect after the special distribution and consolidation of units, will result in the reorganization of the Fund's income trust structure into a publicly-traded corporation, FP Newspapers Inc. ("FPI"). Unitholders of the Fund will receive, for each unit held, one common share of FPI.

FPI plans to begin paying a monthly dividend of $0.05 per share, starting in January 2011. The amount of any dividends payable by FPI will be at the discretion of its board of directors, and may vary depending on, among other things, FPI's earnings, the capital and financing costs of FP Canadian Newspapers Limited Partnership, financial requirements, growth opportunities, the satisfaction of solvency tests imposed by corporate law for the declaration and payment of dividends, and other conditions existing from time to time. 

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. 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 126,500 copies. On Sundays the Winnipeg Free Press publishes a tabloid size 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 15,200 copies. Canstar Community News publishes weekly with an average circulation of approximately 200,000 copies. Based in Winnipeg, the businesses employ approximately 550 people in Winnipeg and Brandon. Further information can be found at www.fpnewspapers.com, and in the disclosure documents filed by FP Newspapers Income Fund with the securities regulatory authorities available at www.sedar.com.

Contact Information

  • FP Newspapers Income Fund
    Daniel Koshowski
    Vice President, Finance and Administration
    (204) 697-7425
    (204) 632-0281 (FAX)