CALGARY, Sept. 30 /PRNewswire-FirstCall/ - Enerplus
Resources Fund ("Enerplus") (TSX - ERF.un, NYSE - ERF) is pleased
to announce the proposed conversion of Enerplus from an income
trust to a corporation and will seek Unitholder approval for the
conversion at a special meeting of Unitholders to be held on
December 9, 2010. Subject to receipt
of all required Unitholder, stock exchange, Alberta Court of Queen's Bench and any other
required third party approvals, Enerplus expects the conversion
will become effective January 1,
2011. The record date for this meeting is October 25, 2010. A management information
circular and proxy statement outlining the details of the
conversion will be mailed in early November to all Unitholders as
of the record date in advance of the December 9, 2010 meeting date. To be implemented,
the conversion must be approved by not less than two-thirds of the
votes cast by Unitholders at the special meeting.
Enerplus is proposing this conversion as a result of certain
changes in Canadian federal tax legislation specifically related to
income trusts. While conversion to a corporation will not impact
the underlying oil and gas operations of Enerplus, it is expected
to simplify the underlying structure and remove uncertainty for
Enerplus that exists in the income trust marketplace today. The new
entity will be named "Enerplus Corporation".
Under the conversion, Enerplus Unitholders would exchange each
trust unit they hold for one common share of Enerplus Corporation.
Holders of exchangeable limited partnership units of Enerplus'
subsidiary, Enerplus Exchangeable Limited Partnership ("EELP
Exchangeable Units"), would receive 0.425 of a common share of
Enerplus Corporation for each EELP Exchangeable Unit, which is the
same exchange ratio for which EELP Exchangeable Units may currently
be exchanged into Enerplus Resources Fund trust units.
Enerplus expects to continue trading on both the Toronto Stock
Exchange and the New York Stock Exchange following the completion
of the corporate conversion and we intend to maintain our "ERF"
ticker symbols. The conversion will not trigger or accelerate any
payments under compensation plans or employment agreements for the
employees, executive or directors of Enerplus.
Enerplus expects the transaction to be considered a tax deferred
exchange for Canadian trust Unitholders. Holders of EELP
Exchangeable Units would be able to elect to have the transaction
effected in a tax-deferred manner. For U.S. investors, the exchange
should qualify as a tax deferred reorganization and as such no gain
or loss would be recognized. This information is not intended to
be, and should not be construed as tax advice and investors in both
Canada and the U.S. should consult
with financial advisors, legal counsel or accountants regarding the
tax consequences of the exchange and any subsequent dividend
payments received from Enerplus Corporation post conversion.
Enerplus intends that, following the conversion, Enerplus
Corporation would continue to pay dividends on a monthly basis. At
this time, Enerplus anticipates that it will maintain the monthly
dividend payment at the same rate of CDN$0.18 per common share per month, however the
actual amount of future dividends may vary depending upon commodity
prices, production volumes, capital spending and costs and cannot
provide any assurances with regard to future dividend payments.
Enerplus will utilize its available tax pools to mitigate our
Canadian cash tax obligations and does not expect to incur cash
taxes in Canada for three to five
years after conversion.
Enerplus also intends to continue to offer a monthly
distribution reinvestment plan for eligible Canadian shareholders
with respect to the payment of any dividends by Enerplus
Corporation following the conversion. Assuming the conversion is
approved, Enerplus plans to make this program available to U.S.
residents later in 2011.
Enerplus has also issued a Social Media Release through Canada
Newswire discussing its corporate conversion plans. This Social
Media Release includes a video message from Gordon J. Kerr, President and Chief Executive
Officer of Enerplus and can be found at
http://smr.newswire.ca/en/enerplus-resources-fund/enerplus-announces-plan-to-convert-to-corporation
Mr. Kerr's video message can also be viewed on our corporate
website at
http://www.enerplus.com/investor_information/corporate_conversion/corporate_conversion.shtml.
FORWARD-LOOKING INFORMATION AND STATEMENTS
This news release contains certain forward-looking information
and statements ("forward-looking information") within the meaning
of applicable securities laws. The use of any of the words
"expect", "anticipate", "continue", "estimate", "guidance",
"objective", "ongoing", "may", "will", "project", "should",
"believe", "plans", "intends", "budget", "strategy" and similar
expressions are intended to identify forward-looking information.
In particular, but without limiting the foregoing, this news
release contains forward-looking information pertaining to the
following: the conversion of Enerplus to a corporation and the
timing and tax effects thereof; the payment and amounts of future
dividends and the availability of a dividend reinvestment plan; the
amount of tax pools and time at which Canadian income taxes may be
paid; and the listing of the shares of Enerplus Corporation on
certain stock exchanges.
The forward-looking information contained in this news release
reflects several material factors and expectations and assumptions
of the Fund including, without limitation: the receipt of all
necessary unitholder, Court, stock exchange and other third party
approvals; the continuance of existing (and in certain
circumstances, the implementation of proposed) tax regimes; and the
availability of cash to pay dividends following the conversion from
a trust to a corporation. The Fund believes the material factors,
expectations and assumptions reflected in the forward-looking
information are reasonable but no assurance can be given that these
factors, expectations and assumptions will prove to be correct.
The forward-looking information included in this news release is
not a guarantee of future conditions or performance and should not
be unduly relied upon. Such information involves known and unknown
risks, uncertainties and other factors that may cause actual
results or events to differ materially from those anticipated in
such forward-looking information including, without limitation:
failure to receive all necessary unitholder, Court, stock exchange
and other third party approvals; changes in tax laws; changes in
commodity prices and acquisition and disposition activity that may
affect the amount of tax pools and the time at which income taxes
may be payable; insufficient cash to pay dividends; and certain
other risks detailed from time to time in the Fund's public
disclosure documents.
The forward-looking information contained in this news release
speak only as of the date of this news release, and none of
Enerplus or its subsidiaries assumes any obligation to publicly
update or revise them to reflect new events or circumstances,
except as may be required pursuant to applicable laws.
Gordon J. Kerr
President & Chief Executive Officer
Enerplus Resources Fund
/NOTE TO PHOTO EDITORS: A photo accompanying this release is
available at http://photos.newswire.ca. Images are free to
accredited members of the media/
SOURCE Enerplus Resources Fund
Copyright . 30 PR Newswire