Noranda Income Fund Announces Changes to Trust Indenture to Mitigate Tax Consequences for Unitholders; Approves 2011 In-Kind Distribution
(firmenpresse) - SALABERRY-DE-VALLEYFIELD, QUEBEC -- (Marketwire) -- 12/13/11 -- Noranda Income Fund (the "Fund") (TSX: NIF.UN) announced today that it has amended its trust indenture to mitigate tax consequences for taxable unitholders and has approved a special distribution of $0.58 per priority unit of the Fund (the "Priority Units") payable on December 31, 2011 to holders of record on December 31, 2011 pursuant to the Fund's trust indenture.
The distribution will be paid "in-kind" by the distribution of additional Priority Units (the "In-Kind Distribution"), and will be settled on December 31, 2011. Immediately following the In-Kind Distribution, the Priority Units will be automatically consolidated such that there will be no net increase in the aggregate number of Priority Units outstanding. As a result, a Canadian resident unitholder will hold, after the automatic consolidation, the same number of Priority Units held by such unitholder immediately prior to the In-Kind Distribution.
This is the second such In-Kind Distribution by the Fund. While the Fund is required, under its trust indenture, to make a distribution of its 2011 taxable income, there are two changes in the 2011 In-Kind Distribution which are expected to improve the tax consequences for investors holding their units in a taxable investment account, compared to the Fund's 2010 In-Kind Distribution:
Therefore, while the 2010 In-Kind Distribution was treated as taxable income for unitholders, the 2011 In-Kind Distribution will generally be treated as a taxable dividend from a Canadian corporation. Accordingly, Canadian resident unitholders will generally be subject to a lower tax rate on the 2011 In-Kind Distribution than the rate that was applicable to unitholders on the 2010 In-Kind Distribution.
Non-resident unitholders will be subject to applicable Canadian withholding tax on the In-Kind Distribution. Unless alternative arrangements are made, this withholding tax obligation may be satisfied by the intermediary through whom a non-resident unitholder holds their Priority Units withholding from such distribution a sufficient number of Priority Units, which units will then be sold by the intermediary on behalf of the non-resident unitholder to satisfy such unitholder's withholding tax liability. The effect of such withholding would be that non-resident holders of Priority Units may experience a net decline in the number of Priority Units they hold immediately following the automatic consolidation discussed above, as compared to the amount held immediately prior to the In-Kind Distribution.
The brief comments above on the tax implications of the In-Kind Distribution are provided as general information only. They are not intended to be legal or tax advice to any unitholder and are not exhaustive of all possible income tax considerations. All unitholders should consult their own legal, business and tax advisors about the tax implications of the In-Kind Distribution. Further general information regarding the In-Kind Distribution, consolidation process and resulting income tax treatment for holders of Priority Units is located on the Fund's website at: .
The issuance of Priority Units pursuant to the In-Kind Distribution is subject to the final approval of the Toronto Stock Exchange.
Noranda Income Fund is an income trust whose units trade on the Toronto Stock Exchange under the symbol "NIF.UN". The Noranda Income Fund owns the CEZinc processing facility and ancillary assets (the "CEZinc processing facility") located in Salaberry-de-Valleyfield, Quebec. The CEZinc processing facility is the second-largest zinc processing facility in North America and the largest zinc processing facility in eastern North America, where the majority of zinc customers are located. It produces refined zinc metal and various byproducts from zinc concentrates purchased from mining operations. The CEZ processing facility is operated and managed by Canadian Electrolytic Zinc Limited.
Further information about the Noranda Income Fund can be found at .
Contacts:
Financial information:
Michael Boone, Vice President & Chief Financial Officer of
Canadian Electrolytic Zinc Limited,
Noranda Income Fund's Manager
416-775-1561
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Datum: 13.12.2011 - 21:07 Uhr
Sprache: Deutsch
News-ID 96675
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SALABERRY-DE-VALLEYFIELD, QUEBEC
Kategorie:
Mining & Metals
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