Pembina Pipeline Income Fund investors approve corporate conversion
CALGARY, May 7 /CNW/ - The Pembina Pipeline Income Fund ("Pembina" or "the Fund") held its annual general and special meeting in Calgary today at which Unitholders voted overwhelmingly in favour of a resolution recommended by the Board of Directors to convert the Fund into a dividend-paying corporate structure.
"Today's meeting marks an important milestone in our company's history," said Bob Michaleski, President and Chief Executive Officer. "The steps we took this afternoon to convert our income trust to a corporation are critically important to the implementation of Pembina's strategic plan. By voting to support corporate conversion, our investors showed their confidence in our ability to generate long-term value by building our company through operational excellence and growth."
The decision to convert to a corporate entity results from a Government of Canada decision in 2006 that introduced legislation designed to change the taxation of income trusts. By converting to a corporation, Pembina can avoid the imposition of specified-investment flow through ("SIFT") tax applicable beginning in 2011. Pembina also expects conversion will provide greater access to capital markets, improved liquidity and greater flexibility to pursue growth and expansion.
Pembina's plan to convert to a corporation is subject to final approval by the Court of Queen's Bench of Alberta, scheduled for May 10, 2010 (the "Final Order") and receipt of all necessary regulatory approvals. If the Final Order is obtained on May 10, 2010 in form and substance satisfactory to Pembina and all other conditions set forth in the arrangement agreement are satisfied or waived, Pembina could complete the conversion as early as July 1, 2010. The Board of Directors has the discretion to delay implementation of the arrangement to not later than December 31, 2010 if it believes such delay is in the best interests of investors.
Under the conversion, Unitholders will exchange each Pembina trust unit they hold for one common share of Pembina Pipeline Corporation.
Also at the meeting, investors elected the following individuals to Pembina's Board of Directors: Allan Edgeworth, Randall Findlay, Lorne Gordon (Chairman of the Board), Myron Kanik, Bob Michaleski (Director and President and Chief Executive Officer), Leslie O'Donoghue and Robert Taylor. The biographies of Pembina's Board members and further details about the Company's corporate governance practices are available on www.pembina.com.
Pembina Pipeline Income Fund's wholly-owned subsidiary, Pembina Pipeline Corporation, transports crude oil and natural gas liquids produced in Western Canada, owns and operates oil sands pipelines and has a growing presence in the midstream and natural gas gathering and processing industries. Pembina's trust units (PIF.UN) and convertible debentures (PIF.DB.B) are traded on the TSX.
This news release contains certain forward-looking information and statements that are based on Pembina's current expectations, estimates, projections and assumptions in light of its experience and its perception of historical trends. In this news release, such forward-looking information and statements can be identified by terminology such as "expects", "plan", "will", "could", "believes" and similar expressions.
In particular, this news release includes financial outlook regarding the planned conversion of Pembina to a corporate form not later than December 31, 2010. These forward-looking statements are based on certain assumptions including: that favourable growth parameters continue to exist in respect of current and future growth projects (including the ability to finance such projects on favourable terms); there will be no changes to current tax laws governing the taxation of SIFT entities, the treatment of cash distributions from such entities, and the conversion of SIFT entities into corporations; and that Pembina's businesses will continue to achieve sustainable financial results.
These forward-looking statements are not guarantees of future performance and are subject to a number of known and unknown risks and uncertainties detailed from time to time in the Fund's public disclosure documents including, among other things, those detailed under the heading "Risk Factors" in the Fund's management's discussion and analysis for the year ended December 31, 2009, and the Fund's Information Circular dated April 1, 2010 which can be found at www.sedar.com.
For further information: Patti Lewis, (403) 231-7554 or toll free at 1-888-428-3222, e-mail: [email protected]