Alinda Capital Partners LLC to acquire assets of UE Waterheater Income Fund; UE unitholders to receive C$23.00 per unit



    /NOT FOR DISTRIBUTION IN THE UNITED STATES OR OVER UNITED STATES WIRE
    SERVICES./

    TORONTO, April 16 /CNW/ - UE Waterheater Income Fund (the "Fund" or "UE")
(TSX: UWH.UN) and Alinda Capital Partners LLC ("Alinda") today announced that
UE has entered into a definitive agreement with affiliates of Alinda providing
for the acquisition by Alinda of all of the assets of UE for a total
acquisition cost of approximately C$1.74 billion including the previously
announced VOXCOM Income Fund transaction. Immediately after completion of the
acquisition, the units of UE will be redeemed for $23.00 per unit in cash.
That value represents a 46% premium to the April 13, 2007 closing price and a
50% premium to the previous 30-day weighted average trading price for the UE
units.
    The Board of Directors of the administrator of UE having received a
fairness opinion from Genuity Capital Markets, has unanimously approved, and
resolved to recommend that the Fund's unitholders approve, the proposed
transaction.
    The transaction is subject to the approval of the Fund unitholders, the
receipt of regulatory approvals and other customary closing conditions. In
connection with the transaction, it is anticipated that Alinda will assume the
Fund's liabilities, UE will redeem or repay its Senior Secured Notes and the
Fund will be wound up on closing. A circular describing the proposed
transaction will be mailed to Fund unitholders for a unitholder meeting
(anticipated to be held in June, 2007) to consider the transaction. Closing of
the transaction is scheduled to occur shortly thereafter. UE unitholders will
continue to receive distributions for all months ending prior to the month in
which closing of the transaction occurs.
    "Since its inception, UE Waterheater Income Fund, through the efforts of
its many dedicated employees, has delivered great value to its investors and
customers. Under Alinda's ownership, Union Energy LP will be able to access
additional resources to further develop and grow the business," says Roger
Rossi, President and CEO, UE Waterheater Income Fund.
    "The Board of Directors unanimously supports this transaction which
offers unitholders a significant premium over the historical trading price of
the units of UE Waterheater Income Fund" says Patrick Lavelle, Chairman of the
Board. "This premium value is a clear endorsement of the excellent quality of
the business and services that the management and employees have been able to
build at UE Waterheater."
    "As a well established business with a long operating history, a
reputation for customer service excellence, a strong management team and
dedicated employees, this is an excellent strategic fit for us," said Chris
Beale, Managing Partner of Alinda. "Union Energy currently serves 1.3 million
residential and commercial rental water heater and security customers in
Ontario, Quebec and British Columbia and with its pending acquisition of
VOXCOM will have a customer base across Canada with excellent prospects for
growth. This transaction will be seamless to customers, who will continue to
receive the same high quality service."
    Genuity Capital Markets is acting as exclusive financial advisor, and
Borden Ladner Gervais LLP is acting as legal advisor, to UE in connection with
the transaction.
    RBC Capital Markets is acting as exclusive financial advisor, and Torys
LLP is acting as legal advisor, to Alinda in connection with the transaction.
    In connection with this release, the Fund will hold a conference call to
discuss this transaction and the previously announced VOXCOM Income Fund
transaction. Details to access the conference call will follow shortly.

    Forward Looking Statements

    This release includes certain forward-looking statements including,
    without limitation, statements concerning the value of any redemption of
    Fund units, the projected costs and plans and objectives of management
    for future operations. Forward-looking statements generally can be
    identified by the use of forward-looking terminology such as "may",
    "will", "expect", "intend", "estimate", "anticipate", "believe",
    "should", "plans" or "continue" or the negative thereof or variations
    thereon or similar terminology. Although the Fund believes that the
    expectations reflected in such forward-looking statements are reasonable,
    it can give no assurance that such expectations will provide to be
    correct. These forward-looking statements are subject to a number of
    risks and uncertainties. Actual results could differ materially from
    those anticipated in these forward-looking statements.

    About UE Waterheater Income Fund

    UE Waterheater Income Fund is an unincorporated, open-ended, limited
purpose trust established under the laws of Ontario, that indirectly holds,
through the UE Waterheater Operating Trust, the water heater rental business
of Union Energy Limited Partnership (Union Energy LP) and its related
commercial activities as well as the security monitoring business. Each Unit
of the Fund represents an indirect ownership interest in Union Energy LP,
which operates the Union Energy business.
    Union Energy LP's main business is the rental and service of a portfolio
of more than one million residential water heaters in Ontario which is
Canada's second largest portfolio of rental water heaters in a program that
was initiated in the 1960s. In addition, Union Energy LP has related
commercial activities that complement the water heater rental business, being
the retail sale, rental, service and maintenance, and financing of heating,
ventilation and air conditioning equipment as well as electronic security
system sales, installation, rental, service, monitoring, and related
commercial activities. The businesses operate under the Union Energy, Reliance
Home Comfort, Reliance Protectron Security Systems, UEI Financial and Reliance
Commercial Solutions brand names.
    For more information on the UE Waterheater Income Fund, visit the web
site at www.ueincomefund.com.

    About Alinda Capital Partners LLC

    Alinda Capital Partners LLC is a privately-held investment firm
specializing in investments in infrastructure assets that provide essential
services to communities, businesses and governments. Last month, Alinda, along
with GE Energy Financial Services, acquired Kinder Morgan Retail, the US
natural gas retail distribution business of Kinder Morgan, Inc., for
approximately US$710 million. The main assets of Kinder Morgan Retail are
three regulated gas utilities in Colorado, Nebraska and Wyoming. Last October,
Alinda acquired the concession to operate the Detroit-Windsor Tunnel. For more
information, visit www.alinda.com.





For further information:

For further information: Media, Jennifer Garland, (416) 490-4968,
jgarland@reliancecomfort.com; Investment Community, Catherine David Nolan,
Chief Financial Officer, (416) 499-7098, cdavidnolan@reliancecomfort.com;
Chris Beale, Alinda Capital Partners LLC, (212) 838-6403

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UE WATERHEATER INCOME FUND

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