Sterling Shoes Income Fund
TSX : SSI.UN
TSX : SSI.DB

Sterling Shoes Income Fund

May 19, 2010 19:04 ET

Sterling Shoes Income Fund Announces Calling of Meeting to Convert to a Corporation

VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 19, 2010) -

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR DISSEMINATION IN THE U.S.

Sterling Shoes Income Fund (TSX:SSI.UN)(TSX:SSI.DB) (the "Fund") today announced that the Supreme Court of British Columbia has approved the calling of a meeting of its unitholders to approve its conversion from an income trust structure to a publicly traded corporation called "Sterling Shoes Inc." at its annual meeting scheduled for June 24, 2010. If approved by unitholders at the meeting and the Supreme Court of British Columbia, the conversion is expected to be completed on July 1, 2010.

In addition, unitholders will be asked to approve a post-conversion shareholder rights plan for Sterling Shoes Inc. If approved, the shareholder rights plan will ensure, to the extent possible, that shareholders of Sterling Shoes Inc. are treated fairly in the event that a take-over bid is made for Sterling Shoes Inc., and will provide the board of directors of Sterling Shoes Inc. sufficient time to evaluate unsolicited take-over bids and to explore, develop and pursue alternatives that could maximize shareholder value. The shareholder rights plan is substantially similar to other shareholder rights plans that have been adopted by a number of leading Canadian companies and ratified by their shareholders. Neither the Fund nor Sterling Shoes Inc. is aware of any specific take-over bid for the Fund or Sterling Shoes Inc. that has been made or is contemplated.

The proposed conversion transaction was announced by the Fund in its news release of April 22, 2010. Under the conversion transaction, the business of the Fund is to be conducted by a new corporation, Sterling Shoes Inc. Unitholders will receive one common share of Sterling Shoes Inc. for each unit of the Fund held by them. In addition, SSI Investments Ltd. will exchange its 20% indirect interest in the Fund for common shares of Sterling Shoes Inc., representing upon completion of the conversation transaction, 20% of the issued and outstanding shares of Sterling Shoes Inc.

The Fund also announced that management's nominees as trustees of the Fund include two new nominees: James M.I. Bruce and Steven P. Richardson in addition to the existing trustees: Richard T. Mahler, Allen R. Sello, Solomon Oshry, Q.C. and Mannie Druker. Mr. Bruce is an investment banker and has held senior investment banking positions with national investment dealers in Canada as well as serving as a director on a number of both public and private entities. Mr. Richardson was the Chief Financial Officer at Hudson's Bay Company, a national retail group of companies, from 2006 through to 2009 and has also held senior executive positions with, and served on the boards of directors of, several financial services institutions.

Detail of the conversion transaction and the shareholders rights plan and other information regarding the meeting are described in the Information Circular of the Fund to be sent to Unitholders on or about May 25, 2010 in connection with the conversion transaction and other matters to be considered at the meeting.

ABOUT STERLING SHOES

Sterling Shoes Income Fund is a leading Vancouver-based footwear retailer offering a broad selection of private label and brand name shoes and accessories in five Canadian provinces through its six separate retail banners: Sterling, Joneve, Shoe Warehouse, Freedman Shoes and Gia. Since 1987, Sterling Shoes has grown from five shopping mall locations to 160 stores (as at May 18, 2010) located in high-traffic, high-visibility locations within enclosed shopping malls, on high streets and in strip malls. The Fund currently employs over 1,300 employees. The Fund's units are listed on the Toronto Stock Exchange under the symbol SSI.UN. The Fund's convertible debentures are listed on the Toronto Stock Exchange under the symbol SSI.DB.

Contact Information

  • Sterling Shoes Income Fund
    Daniel Gumprich
    Chief Financial Officer
    (604) 270 6114
    (604) 278 7751 (FAX)