Business
Cathedral Energy Services announces intent to convert to a corporation and provides operations update
/NOT FOR DISSEMINATION IN THE UNITED STATES OF AMERICA/ CALGARY, Aug. 19 /CNW/ - Cathedral Energy...
About this update from Act Energy Technologies Ltd.
[{"type":"text","content":"\n\n\n\n/NOT FOR DISSEMINATION IN THE UNITED STATES OF AMERICA/\n\n\nCALGARY, Aug. 19 /CNW/ - Cathedral Energy Services Income Trust (the\n"Trust"/"Cathedral" - TSX: CET.UN) is pleased to announce its intention to\nconvert from an income trust to a growth-oriented corporation pursuant to a\nstatutory plan of arrangement (the "Conversion"). The Trust expects to\ncomplete the Conversion prior to December 31, 2009.\n\n\nOn October 31, 2006, the Minister of Finance (Canada) announced the\nSpecified Investment Flow-Through Trust income and distribution tax (the "SIFT\nTax") which effectively eliminates the public income trust structure effective\nJanuary 1, 2011. These new tax laws provide for a tax-free conversion if such\na conversion occurs before 2013. Over the past year the Trust has been\ninvestigating and considering various restructuring alternatives available to\nit and the Trust's strategic objectives which include ensuring the Trust has\nthe most appropriate structure for its long-term viability and sustainability.\nWith due regard to the SIFT Tax becoming effective in 2011, the Trust's\nstrategic objectives and the current industry environment, the Trust believes\nthat it is in its best interests to proceed with the Conversion at this time.\n\n\nRationale and Benefits for the Conversion\n\nManagement and the Trustees believe that the Conversion provides a number\nof compelling and strategic benefits, including the expectation that the\nConversion:\n\n- will result in paying a dividend to shareholders with a view to\n sustainability while at the same time delivering returns through\n capital appreciation;\n\n- will result in Cathedral's financial and operational performance to\n be directly valued relative to its corporate peers;\n\n- may result in greater access to capital and the removal of the\n "normal growth" and "undue expansion restrictions" in the SIFT Tax\n that potentially limited the Trust's ability to consider strategic\n acquisitions;\n\n- will remove the Trust from the uncertainty that exists in the income\n trust marketplace regarding conversion to a corporation;\n\n- will provide for a tax deferred rollover for unitholders of the Trust\n based upon the recently enacted rules for SIFT conversions who are\n resident in Canada;\n\n- will result in Can...