General Donlee Income Fund Announces Substantial Issuer Bid for its Units



    TORONTO, Feb. 25 /CNW/ - General Donlee Income Fund (the "Fund",
TSX-GDI.UN, TSX-GDI.DB) announced a substantial issuer bid (the "Offer") today
pursuant to which the Fund will offer to purchase for cancellation up to
1,171,253 of its outstanding units ("Units") from unitholders ("Unitholders")
at a price of $8.75 per Unit. If more than 1,171,253 Units are tendered to the
Offer, the Fund will purchase the Units on a pro rata basis according to the
number of Units deposited, or deemed to be deposited under the terms of the
Offer, by the depositing Unitholders with fractions rounded down to the
nearest whole Unit. The Offer is not conditional on any minimum number of
Units being deposited. The purchase of Units will be financed from existing
cash and is not expected to effect the Fund's monthly distributions to
Unitholders.
    As of February 22, 2008, there were 7,808,354 Units outstanding and,
accordingly, the Offer is for 15% of the outstanding Units. The Offer is
subject to various conditions typical of transactions of this nature,
including obtaining regulatory exemption rulings. It is anticipated that the
offer to purchase and issuer bid circular and other related documents (the
"Offer Documents"), containing the terms of the Offer and the instructions for
tendering Units will be mailed to Unitholders and filed with applicable
securities regulators on or about February 27, 2008. The Offer will remain
open for acceptance for at least 35 days after the date of commencement,
unless withdrawn or extended by the Fund.
    The trustees of the Fund believe that the purchase of Units under the
Offer represents an effective use of the Fund's financial resources and is in
the best interests of its Unitholders as the recent trading price range of the
Units is not fully reflective of the value of the Fund's business and future
prospects. The repurchase of Units is not expected to preclude the Fund from
pursuing its foreseeable business opportunities or the future growth of its
business.
    In accordance with applicable securities laws, the Fund will suspend
purchases of its convertible debentures pursuant to its normal course issuer
bid announced on January 24, 2008 until after the expiry of the Offer.
    Neither the Fund nor its Board of Trustees makes any recommendation to
Unitholders as to whether to tender or refrain from tendering their Units to
the Offer. Unitholders are strongly encouraged to review the Offer Documents
carefully and to consult with their financial and tax advisors prior to making
any decision with respect to the Offer.

    The Fund is a trust established to hold the securities of General Donlee
Limited, which is a leading diversified manufacturer of precision-machined
products for the military, commercial and general aerospace industries and
also is a specialist in the manufacture of precision-machined products for the
industrial products and power generation industries.

    Certain forward-looking statements contained in this news release are
based on information, currently available to management, but are subject to a
number of uncertainties and risks that could cause actual results to differ
materially from the results discussed in the forward-looking statements. These
uncertainties and risks include, but are not limited to: dependence on
commercial aircraft sales and defence procurement, power generation sales and
sales to the industrial sector, production rates, timing of deliveries,
dependence on key customers, dependence on third party suppliers and
manufacturers, competition, product liability and warranty claims,
environmental and other government regulation, quality certification
requirements, hedging effects, interest and foreign exchange rates, leverage
and restrictive debt covenants, continued availability of credit facilities,
insurance availability and coverage, regulatory requirements, reliance on key
personnel and our skilled workforce, changes in accounting policies, the
ability to obtain orders and domestic and international economic conditions.

    Further information can be found in the disclosure documents filed by the
Fund with the securities regulatory authorities, available at www.sedar.com.
or through the Fund's website at www.generaldonlee.com.

    %SEDAR: 00017571E




For further information:

For further information: Gerald Thain, Chief Financial Officer, General
Donlee Income Fund, Telephone: (416) 743-4417, Fax: (416) 746-8998,
gthain@donleeprecision.com

Organization Profile

GENERAL DONLEE INCOME FUND

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