Business
Badger Income Fund Proposes Internal Reorganization
Badger Income Fund Proposes Internal Reorganization.
About this update from Badger Infrastructure Solutions Ltd
[{"type":"text","content":"\n\n\n\n\nTSX-BAD.UN\n\nCALGARY, Oct. 26 /CNW/ - Badger Income Fund (the \"Fund\") is pleased to\nannounce that it intends to hold a special meeting of its unitholders to seek\ntheir approval to a proposal for an internal reorganization to convert the\norganizational structure of the Fund to the more modern trust-on-partnership\nstructure. This structure has been adopted by a number of other income trusts\nand will achieve greater efficiencies.\nCompletion of the internal reorganization is subject to the receipt of\nthe approval of at least 66 2/3% of the votes cast by the unitholders of the\nFund at a special meeting of unitholders currently anticipated to be held on\nor about December 20, 2006. It is intended that the reorganization will be\naccomplished by way of a \"Plan of Arrangement\" under the Business Corporations\nAct (Alberta) and therefore is also subject to the approval of the Court of\nQueen's Bench of Alberta. The reorganization will also be conditional upon\nreceipt of a satisfactory advance tax ruling (the \"Advance Tax Ruling\") from\nthe Canada Revenue Agency, which Advance Tax Ruling has been applied for by\nthe Fund, as well as consents from third parties and other regulatory\napprovals, which the Fund expects to receive in due course.\nAs stated earlier, the purpose of the proposed internal reorganization is\nto convert the organizational structure of the Fund to the more modern\ntrust-on-partnership structure. Badger Daylighting Limited Partnership\n(\"Badger LP\"), an indirect subsidiary of the Fund, is expected to generate\nsignificant operating profits and the current organizational structure, in\nwhich Badger Daylighting Inc. (\"BDI\") owns approximately 71% of the\noutstanding limited partnership units of Badger LP, creates the potential for\ntaxation in BDI which would result in reduced cash flow for distribution to\nholders of units of the Fund. Management of the Fund believes that the more\nmodern trust-on-partnership structure, whereby the Fund would own 100% of the\noutstanding limited partnership units of Badger LP (i.e. a 99.9% limited\npartnership interest in Badger LP), resulting in increased cash flow to\nholders of units of the Fund, would be better received by the capital markets\nand would therefore be in the best interests of the Fund and its Unitholders.\nManagement of the Fund believes...