TORONTO, ONTARIO — (Marketwire) — 02/28/13 — Dominion Citrus Income Fund (the “Fund”) (TSX: DOM.UN) and Dominion Citrus Limited (TSX: DMN.PR.A) (the “Company”) (collectively, “Dominion Citrus”) today announced that their respective boards (the “Boards”) have approved, on a without prejudice basis, the terms of a proposed settlement (the “Settlement”) with a significant holder of outstanding Series A Preference Shares of the Company (the “Preference Shares”). The Company intends to seek the approval of the holders of Preference Shares by way of special resolution (the “Settlement Resolution”) so as to incorporate the terms of the Settlement into the articles of the Preference Shares and make the terms of the Settlement binding upon all holders. The Settlement will have the effect of eliminating the current cash retraction date of April 1, 2013 applicable to the Preference Shares, waiving a portion of the accrued dividends, future dividend rights and substituting repayment of the cash retraction amount over a six (6) year period at which time the Preference Shares shall be redeemed.
Jason Fielden, the President and Chief Executive Officer of Dominion Citrus said, “Addressing this significant liability in a fair and responsible manner that protects the rights of the holders of Preference Shares will allow Dominion Citrus to continue to implement its plans to profitably grow its business for the benefit of all stakeholders.”
It is anticipated that, following the Meeting, in the event that the Settlement Resolution is approved, the Company will make voluntary application to delist the Preference Shares from the TSX, thereby realizing additional cost savings.
The Units of the Fund shall continue to be listed and posted for trading on the TSX.
The Boards have had the benefit of advice from a special committee of directors of the Company and trustees of the Fund consisting of Jason Fielden, Eric Skillins and Paul Scarafile, which was constituted to review the various options available to the Company in dealing with this matter, to negotiate with the significant holder of the Preference Shares and its counsel and receive the advice of external legal and financial advisors.
The Directors of the Company (with R. Peter McLaughlin abstaining because of his interest in the Settlement as a holder of Preference Shares) unanimously recommend that Preference Shareholders vote in favour of the approval of the Settlement Resolution at the upcoming special meeting.
Key Terms of Proposed Settlement
The Settlement Agreement will be filed by the Company on . Certain key features of the Settlement to be implemented by the Settlement Resolution are:
Caution regarding Forward-Looking Statements
This release contains statements, which, to the extent that they are not a recitation of historical fact, may constitute “forward-looking statements”. Forward-looking statements may include financial and other projections, as well as statements regarding our future plans, objectives or performance, or our underlying assumptions. The words “estimate”, “anticipate”, “believe”, “expect”, “intend” or other similar expressions of future or conditional verbs such as “will”, “should”, “would” and “could” are intended to identify forward-looking statements. Persons reading this press release are cautioned that such statements are only expectations, and that our actual results or performance may be materially different. Forward-looking information involves certain risks, assumptions, uncertainties and other factors which may cause actual future results to differ materially from those expressed or implied in any forward-looking statements. In particular and without limitation, there is no assurance that the Settlement will be implemented on the terms proposed herein or at all as such implementation is uncertain and subject to a number of risks, many of which are beyond the control of the Company or the Fund. The Company and the Fund may suffer material adverse consequences in the event that the Settlement is not implemented.
Readers should not place undue reliance on these forward-looking statements when making decisions, and should consider the date onto which the statements were made. Except as required under applicable securities law, management disclaims any intention or obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
About Dominion Citrus
The Fund is a publicly traded, unincorporated, open-ended limited purpose income trust. On January 1, 2006, all of the common shares of the Company were exchanged for trust units of the Fund. The trust units are listed on the TSX under the symbol DOM.UN. The Series A preference shares of the Company are listed on the TSX under the symbol DMN.PR.A.
Dominion Citrus is a diversified food company supplying fresh produce to a wide variety of customers in retail, foodservice and food distribution businesses. Dominion provides procurement, processing, repacking, sorting, grading, warehousing and distribution services to its major domestic markets being Ontario and Quebec. Dominion also supplies products to customers in the United States. Dominion Citrus- website may be accessed at .
Contacts:
Dominion Citrus Ltd.
Jason Fielden
President & CEO
416-242-8341 x 250