Declares distribution of $0.065 per Fund Unit for June
OTTAWA, June 14 /CNW/ - OFI Income Fund (OFB.un) announced today that the
Board of Trustees has approved a cash distribution for the month of June 2007
of $ 0.065 per Fund unit covering the period of June 1, 2007 to June 30, 2007,
which will be paid on July 16, 2007 to unitholders of record at the close of
business on June 29, 2007.
With softer housing market conditions in the US, the Fund has experienced
a combination of decrease in demand and erosion in pricing. This, coupled with
potential further weakening in economic conditions has resulted in a decision
to take a more conservative approach to distribution levels at this time.
Although this represents a significant reduction in our distribution level
($0.039 per Fund unit per month), we feel that this is a prudent level, based
upon the current business outlook and cost assumptions. The Board of Trustees
will continue to review the performance of the Fund's operations on an
on-going basis with a continued view of preserving and maximizing unitholder
value over the short and long term.
As reported in our first quarter of 2007, the slowdown in the
construction industry had started affecting Fund results. The resulting
weakened demand for OFI products is consistent with the reported slowdown in
the U.S. housing market and reported results from other companies in the
construction sector. Although the number of OFI customers has increased and
cost-cutting measures have been put into place, it will take a few months for
the results of these actions to be fully realized.
The Fund will be monitoring its cash distribution capacity on a
month-to-month basis in the light of evolving housing market conditions and
the measures it is undertaking to compensate for them. To the extent that
there is no further weakening of market conditions, and while the outlook
cannot be guaranteed, the Fund is hopeful that distributions can be sustained
at this reduced level, prior to a restoration to the earlier rate.
No distributions to Class B Subordinated Exchangeable L.P. unitholders
have been made so far in 2007. With the Fund's unique subordination feature,
until September 2009 distributions to Fund unitholders have priority over the
Class B Subordinated Exchangeable L.P. until the cumulative aggregate of the
announced Base Distribution to Fund unitholders is restored.
About OFI Income Fund
OFI income Fund is an unincorporated, open-ended trust established under
the laws of the Province of Ontario, created to indirectly acquire and hold
interest in the outstanding limited partnership units of OFI L.P. ("LP
Since 1980, OFI has been manufacturing and distributing a broad range of
fibreglass insulation products including ceiling tiles designed for thermal
and acoustical applications. OFI products are destined for the residential as
well as non-residential/industrial markets in Canada, the US and overseas. OFI
manufactures under a low-cost operating structure and has been profitable for
the past 23 years.
For further information:
For further information: Catherine Skarzenski, Executive Vice-President
and Chief Financial Officer, Tel: (613) 247-7116, Fax: (613) 736-7281,