ENERPLUS ANNOUNCES PLAN TO CONVERT TO CORPORATION
September 30 2010 - 7:00AM
PR Newswire (Canada)
CALGARY, Sept. 30 /CNW/ -- CALGARY, Sept. 30 /CNW/ - 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/ %CIK: 0001126874 Investor Relations Department at
Enerplus at 1-800-319-6462 or email investorrelations@enerplus.com
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