TORONTO, Nov. 14, 2011 /CNW/ - Clearwater Capital Management Inc.
("Clearwater"), a significant holder of priority units of Noranda
Income Fund (the "Fund") and a holder of the 6.875% senior secured
notes due 2016 (the "Notes") of the Noranda Operating Trust (the
"Trust"), on behalf of its managed accounts, welcomes the Fund's
announcement on Friday, November 11, 2011 concerning the formation of
an independent committee of the Trust's board to determine the
availability of funds for distribution to unitholders.
Mr. Roland Keiper, President of Clearwater, commented, "Clearwater fully
supports use of an independent committee, receiving independent advice,
to make determinations concerning unitholder distributions. That
process, which is responsive to concerns Clearwater has expressed,
should on a go-forward basis help address the conflicts of interest
arising from the multiple roles and interests of Xstrata Canada. We expect that the process disclosed by the Fund will be managed in a
rigorous and transparent manner."
Mr. Keiper further stated, "The Fund has experienced an increase in
EBITDA in 2011 over 2010 and has also experienced an increase in each
quarter in 2011. As a result of these developments, and having recently
completed long term financings, the Fund is in a stable financial
position, and its commitment to reduce the outstanding amount of senior
secured notes at a rate of $15 million per year or a total of $90
million by December 2016 will further improve the Fund's financial
We expect that the review will confirm the long term viability of the
Fund's processing facility given its attractive location close to
large, long standing customers, ready rail access to domestic zinc
concentrate supply and water access to off-shore zinc concentrate
supply, low cost electricity supply, a supportive Provincial
government, and a stable labour force. As such we believe a bona fide
independent effort to locate zinc concentrate supply will be successful
in coming years as new mines are developed and existing mines expanded
that may provide zinc concentrate as a primary product or by-product,
and that there is no need whatsoever to build additional notional
reserves in the circumstances.
We are therefore confident the independent committee will support an
increase in the distribution to priority unitholders and distribute
excess cash, as generated, up to an amount equal to the base monthly
distribution rate of $0.08333 per unit."
SOURCE Clearwater Capital Management Inc.
For further information:
Clearwater Capital Management Inc.
Contact 416 642 5700.