Energy Split Corp. II Inc. Announces Capital Yield Shareholders and ROC Preferred Shareholders Approve Reorganization



    TORONTO, Oct. 23 /CNW/ - Energy Split Corp. II Inc. (the "Company")
announced today that holders of its Capital Yield Shares and holders of its
ROC Preferred Shares have approved amendments to the articles of the Company
extending the termination date of the Company for an additional three years to
December 16, 2010.
    Holders of Capital Yield Shares will be able to continue to enjoy the
benefits of leveraged tax efficient distributions from a fixed portfolio of
selected oil and gas royalty trusts listed on the Toronto Stock Exchange which
is held by an underlying fund while deferring the recognition of any capital
gains or losses that would otherwise be realized on the redemption of their
Capital Yield Shares.
    Holders of ROC Preferred Shares will be able to continue to enjoy
quarterly fixed cumulative preferential tax efficient distributions on the ROC
Preferred Shares for an additional three years at an increased rate equal to
the greater of (i) 5.00% and (ii) the Government of Canada three year bond
rate as at November 9, 2007 plus 0.75%, rounded down to the nearest 0.05%. The
Company will announce the actual rate on the ROC Preferred Share on
November 9, 2007.
    Under the reorganization, holders of Capital Yield Shares and holders of
ROC Preferred Shares have the right to retract their shares pursuant to the
additional special retraction right (the "Special Retraction Right"). This
will enable holders to redeem their Capital Yield Shares or ROC Preferred
Shares on the terms that would have applied had the Company redeemed all
Capital Yield Shares and ROC Preferred Shares as originally contemplated.
Holders of the Capital Yield Shares and holders of the ROC Preferred Shares
who wish to exercise the Special Retraction Right must give notice of the
retraction on or prior to November 16, 2007.
    The reorganization will only be implemented if a minimum of 1,280,000
Capital Yield Shares remain issued and outstanding following exercise of the
Special Retraction Right by holders on or before November 16, 2007. If this
condition is not satisfied, the Company will redeem the Capital Yield Shares
and the ROC Preferred Shares on December 16, 2007 as originally contemplated.
    If the reorganization is implemented the ratio of Capital Yield Shares to
ROC Preferred Shares will continue to be two-to-one and the asset coverage on
the ROC Preferred Shares will be set at approximately 2.2 times to extend the
current Pfd-2(low) rating. In order to achieve this, the Company may redeem
ROC Preferred Shares which are not surrendered for retraction pursuant to the
Special Retraction Right. The reorganization is not conditional on the rating
being maintained.

    Capital Yield Shares and ROC Preferred Shares of Energy Split Corp. II
Inc. are listed for trading on the Toronto Stock Exchange under the symbols EN
and EN.PR.A respectively.

    %SEDAR: 00021250E




For further information:

For further information: Investor Relations, Energy Split Corp. II Inc.,
(416) 945-4777, E-mail: mc_energysplit2@scotiacapital.com, Web site:
www.scotiamanagedcompanies.com

Organization Profile

ENERGY SPLIT CORP. II INC.

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