Tree Island Wire Income Fund

Tree Island Wire Income Fund

November 17, 2006 16:12 ET

Tree Island Nets Cash Gain on Sale of California Property Purchase Option

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Nov. 17, 2006) - Tree Island Wire Income Fund (the "Fund") (TSX:TIL.UN) today announced that its subsidiary, Tree Island Wire (USA), has sold a purchase option on its leased Pomona, California manufacturing facility for an expected net after-tax cash gain of CDN $3,209,000. The transaction closed today, and the gain will be recorded as part of fourth quarter 2006 cash flow.

The Pomona facility houses Tree Island's stainless steel wire operations. Tree Island gained the option to purchase the Pomona property and buildings when it acquired Industrial Wire Products in August 2001. This option, which was set to expire this year, was sold to a third party for net proceeds of US $4,700,000 or approximately CDN$5,349,000. The after-tax cash gain is expected to be CDN $3,209,000.

Tree Island will continue to lease the Pomona facility, and today signed a ten-year agreement with the new owner. This replaces the previous lease agreement, which would have run until August 2011. The new lease is based on current market rates, which are higher than those specified in the previous lease. Over the next five years, the expected after-tax (based on current tax rates) impact of these higher lease payments will partially offset the CDN $3.2 million fourth quarter gain by a total of CDN $1,208,000.

Fund Profile

Tree Island Wire Income Fund was launched on November 12, 2002, with the completion of an Initial Public Offering. There are 21,918,400 units of the Fund outstanding, representing a 100% ownership interest in Tree Island.

The Fund's performance depends entirely on the performance of Tree Island.

Tree Island Profile

Headquartered in Richmond, British Columbia, Tree Island Industries produces wire products for a diverse range of construction, agricultural, manufacturing and industrial applications. Its products include bright wire, stainless steel wire and galvanized wire; a broad array of fasteners, including packaged, collated and bulk nails; stucco reinforcing products, engineered structural mesh, fencing and other fabricated wire products. The company markets these products under the Tree Island, K-Lath, Halsteel, TI Wire and Industrial Alloys brand names.

Forward-Looking Statements

This press release contains forward-looking statements based on assumptions considered reasonable at the time they were prepared. Any statements that are contained herein that are not statements of historical fact may be deemed to be forward-looking statements. These statements speak only to the conditions in existence as of the date of this press release, and the Fund maintains no obligation to update such statements.

Forward-looking statements, by their nature, necessarily involve risks and uncertainties that could cause actual results to differ materially from those contemplated by the statements. Such risks and uncertainties include, but are not limited to, risks associated with operations such as competition, dependence on the construction industry, supplies of raw materials, dependence on key personnel, labour relations, regulatory matters, environmental risks, the successful execution of acquisition and integration strategies, foreign exchange fluctuations, the effect of leverage and restrictive covenants in financing arrangements, product liability, the ability to obtain insurance, energy cost increases, the ability to fund necessary future capital investments, and changes in tax legislation.

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