Accessibility Statement Skip Navigation
  • Resources
  • Blog
  • Journalists
  • Webcasts
  • Data Privacy
  • Français
  • my CNW 
    • Login
    • Register
  • Client Login 
    • Online Member Centre
    • Next Gen Communications Cloud
    • Cision Communications Cloud®
  • Sign Up
  • Send a Release
Return to PR Newswire homepage
  • News
  • Products
  • Contact
When typing in this field, a list of search results will appear and be automatically updated as you type.

Searching for your content...

No results found. Please change your search terms and try again.
Advanced Search
  • News in Focus
      • Browse News Releases

      • All News Releases
      • All Public Company
      • News Releases Overview

      • Multimedia Gallery

      • All Multimedia
      • All Photos
      • All Videos
      • Multimedia Gallery Overview

      • Trending Topics

      • All Trending Topics
  • Business
      • Auto & Transportation

      • All Automotive & Transportation
      • Aerospace, Defense
      • Air Freight
      • Airlines & Aviation
      • Automotive
      • Maritime & Shipbuilding
      • Railroads and Intermodal Transportation
      • Supply Chain/Logistics
      • Transportation, Trucking & Railroad
      • Travel
      • Trucking and Road Transportation
      • Auto & Transportation Overview

      • View All Auto & Transportation

      • Business Technology

      • All Business Technology
      • Blockchain
      • Broadcast Tech
      • Computer & Electronics
      • Computer Hardware
      • Computer Software
      • Data Analytics
      • Electronic Commerce
      • Electronic Components
      • Electronic Design Automation
      • Financial Technology
      • High Tech Security
      • Internet Technology
      • Nanotechnology
      • Networks
      • Peripherals
      • Semiconductors
      • Business Technology Overview

      • View All Business Technology

      • Entertain­ment & Media

      • All Entertain­ment & Media
      • Advertising
      • Art
      • Books
      • Entertainment
      • Film and Motion Picture
      • Magazines
      • Music
      • Publishing & Information Services
      • Radio & Podcast
      • Television
      • Entertain­ment & Media Overview

      • View All Entertain­ment & Media

      • Financial Services & Investing

      • All Financial Services & Investing
      • Accounting News & Issues
      • Acquisitions, Mergers and Takeovers
      • Banking & Financial Services
      • Bankruptcy
      • Bond & Stock Ratings
      • Conference Call Announcements
      • Contracts
      • Cryptocurrency
      • Dividends
      • Earnings
      • Earnings Forecasts & Projections
      • Financing Agreements
      • Insurance
      • Investments Opinions
      • Joint Ventures
      • Mutual Funds
      • Private Placement
      • Real Estate
      • Restructuring & Recapitalization
      • Sales Reports
      • Shareholder Activism
      • Shareholder Meetings
      • Stock Offering
      • Stock Split
      • Venture Capital
      • Financial Services & Investing Overview

      • View All Financial Services & Investing

      • General Business

      • All General Business
      • Awards
      • Commercial Real Estate
      • Corporate Expansion
      • Earnings
      • Environmental, Social and Governance (ESG)
      • Human Resource & Workforce Management
      • Licensing
      • New Products & Services
      • Obituaries
      • Outsourcing Businesses
      • Personnel Announcements
      • Real Estate Transactions
      • Residential Real Estate
      • Small Business Services
      • Socially Responsible Investing
      • Surveys, Polls and Research
      • Trade Show News
      • General Business Overview

      • View All General Business

  • Science & Tech
      • Consumer Technology

      • All Consumer Technology
      • Artificial Intelligence
      • Blockchain
      • Cloud Computing/Internet of Things
      • Computer Electronics
      • Computer Hardware
      • Computer Software
      • Consumer Electronics
      • Cryptocurrency
      • Data Analytics
      • Electronic Commerce
      • Electronic Gaming
      • Financial Technology
      • Mobile Entertainment
      • Multimedia & Internet
      • Peripherals
      • Social Media
      • STEM (Science, Tech, Engineering, Math)
      • Supply Chain/Logistics
      • Wireless Communications
      • Consumer Technology Overview

      • View All Consumer Technology

      • Energy & Natural Resources

      • All Energy
      • Alternative Energies
      • Chemical
      • Electrical Utilities
      • Gas
      • General Manufacturing
      • Mining
      • Mining & Metals
      • Oil & Energy
      • Oil and Gas Discoveries
      • Utilities
      • Water Utilities
      • Energy & Natural Resources Overview

      • View All Energy & Natural Resources

      • Environ­ment

      • All Environ­ment
      • Conservation & Recycling
      • Environmental Issues
      • Environmental Policy
      • Environmental Products & Services
      • Green Technology
      • Natural Disasters
      • Environ­ment Overview

      • View All Environ­ment

      • Heavy Industry & Manufacturing

      • All Heavy Industry & Manufacturing
      • Aerospace & Defense
      • Agriculture
      • Chemical
      • Construction & Building
      • General Manufacturing
      • HVAC (Heating, Ventilation and Air-Conditioning)
      • Machinery
      • Machine Tools, Metalworking and Metallurgy
      • Mining
      • Mining & Metals
      • Paper, Forest Products & Containers
      • Precious Metals
      • Textiles
      • Tobacco
      • Heavy Industry & Manufacturing Overview

      • View All Heavy Industry & Manufacturing

      • Telecomm­unications

      • All Telecomm­unications
      • Carriers and Services
      • Mobile Entertainment
      • Networks
      • Peripherals
      • Telecommunications Equipment
      • Telecommunications Industry
      • VoIP (Voice over Internet Protocol)
      • Wireless Communications
      • Telecomm­unications Overview

      • View All Telecomm­unications

  • Lifestyle & Health
      • Consumer Products & Retail

      • All Consumer Products & Retail
      • Animals & Pets
      • Beers, Wines and Spirits
      • Beverages
      • Bridal Services
      • Cannabis
      • Cosmetics and Personal Care
      • Fashion
      • Food & Beverages
      • Furniture and Furnishings
      • Home Improvement
      • Household, Consumer & Cosmetics
      • Household Products
      • Jewelry
      • Non-Alcoholic Beverages
      • Office Products
      • Organic Food
      • Product Recalls
      • Restaurants
      • Retail
      • Supermarkets
      • Toys
      • Consumer Products & Retail Overview

      • View All Consumer Products & Retail

      • Entertain­ment & Media

      • All Entertain­ment & Media
      • Advertising
      • Art
      • Books
      • Entertainment
      • Film and Motion Picture
      • Magazines
      • Music
      • Publishing & Information Services
      • Radio & Podcast
      • Television
      • Entertain­ment & Media Overview

      • View All Entertain­ment & Media

      • Health

      • All Health
      • Biometrics
      • Biotechnology
      • Clinical Trials & Medical Discoveries
      • Dentistry
      • FDA Approval
      • Fitness/Wellness
      • Health Care & Hospitals
      • Health Insurance
      • Infection Control
      • International Medical Approval
      • Medical Equipment
      • Medical Pharmaceuticals
      • Mental Health
      • Pharmaceuticals
      • Supplementary Medicine
      • Health Overview

      • View All Health

      • Sports

      • All Sports
      • General Sports
      • Outdoors, Camping & Hiking
      • Sporting Events
      • Sports Equipment & Accessories
      • Sports Overview

      • View All Sports

      • Travel

      • All Travel
      • Amusement Parks and Tourist Attractions
      • Gambling & Casinos
      • Hotels and Resorts
      • Leisure & Tourism
      • Outdoors, Camping & Hiking
      • Passenger Aviation
      • Travel Industry
      • Travel Overview

      • View All Travel

  • Policy & Public Interest
      • Policy & Public Interest

      • All Policy & Public Interest
      • Advocacy Group Opinion
      • Animal Welfare
      • Canadian Federal Government
      • Canadian Municipal Government
      • Canadian Provincial Government
      • Corporate Social Responsibility
      • Domestic Policy
      • Economic News, Trends, Analysis
      • Education
      • Environmental
      • European Government
      • FDA Approval
      • Federal and State Legislation
      • Federal Executive Branch & Agency
      • Foreign Policy & International Affairs
      • Homeland Security
      • Labor & Union
      • Legal Issues
      • Natural Disasters
      • Not For Profit
      • Patent Law
      • Public Safety
      • Trade Policy
      • Policy & Public Interest Overview

      • View All Policy & Public Interest

  • People & Culture
      • People & Culture

      • All People & Culture
      • Aboriginal, First Nations & Native American
      • African American
      • Asian American
      • Children
      • Diversity, Equity & Inclusion
      • Hispanic
      • Lesbian, Gay & Bisexual
      • Men's Interest
      • People with Disabilities
      • Religion
      • Senior Citizens
      • Veterans
      • Women
      • People & Culture Overview

      • View All People & Culture

  • Advanced Search
  • Overview
  • Multichannel Amplification
  • Monitoring
  • Distribution
  • Multimedia
  • Guaranteed Paid Placement
  • AI Tools
  • IR
  • Become a Client
  • Request a Demo
  • Editorial Bureaus
  • Partnerships
  • General Enquiries
  • Media
  • Worldwide Offices
  • Hamburger menu
  • Cision Canada
  • Send a Release
  • FR
    • Phone

    • 877-269-7890 from 8 AM - 10 PM ET

    • ALL CONTACT INFO
    • Contact Cision

      877-269-7890
      from 8 AM - 10 PM ET

  • Send a Release
  • Sign Up
  • Resources
  • Blog
  • Journalists
  • Webcasts
  • GDPR
  • News in Focus
    • Browse All News
    • Multimedia Gallery
    • Trending Topics
  • Business
    • Auto & Transportation
    • Business Technology
    • Entertain­ment & Media
    • Financial Services & Investing
    • General Business
  • Science & Tech
    • Consumer Technology
    • Energy & Natural Resources
    • Environ­ment
    • Heavy Industry & Manufacturing
    • Telecomm­unications
  • Lifestyle & Health
    • Consumer Products & Retail
    • Entertain­ment & Media
    • Health
    • Sports
    • Travel
  • Policy & Public Interest
    • Policy & Public Interest
  • People & Culture
    • People & Culture
  • Send a Release
  • Sign Up
  • Resources
  • Blog
  • Journalists
  • Webcasts
  • GDPR
  • Overview
  • Multichannel Amplification
  • Monitoring
  • Distribution
  • Multimedia
  • Guaranteed Paid Placement
  • AI Tools
  • IR
  • Send a Release
  • Sign Up
  • Resources
  • Blog
  • Journalists
  • Webcasts
  • GDPR
  • Become a Client
  • Request a Demo
  • Editorial Bureaus
  • Partnerships
  • General Enquiries
  • Media
  • Worldwide Offices
  • Send a Release
  • Sign Up
  • Resources
  • Blog
  • Journalists
  • Webcasts
  • GDPR

Cargojet Income Fund Announces Intention to Convert to a Corporation


News provided by

Cargojet Inc.

Feb 26, 2010, 16:45 ET

Share this article

Share toX

Share this article

Share toX

TORONTO, Feb. 26 /CNW/ - Cargojet Income Fund (the "Fund") (TSX: CJT.UN) announced today its intention to proceed with a conversion of the Fund from an income trust to a growth-oriented, dividend paying corporation ("New Cargojet"), which will continue the business of the Fund and its subsidiaries and affiliates as a leading Canadian provider of time sensitive overnight air cargo services. It is contemplated that the proposed conversion be completed by way of a statutory plan of arrangement (the "Arrangement") under Section 182 of the Business Corporations Act (Ontario). It is anticipated that a management information circular will be mailed to voting unitholders in mid-April 2010, in connection with the conversion and other matters to be considered at the annual and special meeting (the "Meeting") of holders of trust units and special voting units of the Fund ("Voting Unitholders") to be held on May 18, 2010. The conversion is currently expected to be completed on or about December 31, 2010.

Background to and Reasons for the Arrangement

On October 31, 2006, the Minister of Finance (Canada) (the "Minister") announced the federal government's proposal to apply a tax at the trust level on distributions of certain income from, among other entities, certain publicly traded mutual fund trusts at a rate of tax comparable to the combined federal and provincial corporate tax rate and to treat such distributions as dividends to unitholders. The Minister announced that existing trusts would have a four-year transition period and generally would not be subject to the new rules until 2011, provided such trusts experienced only "normal growth" and no "undue expansion" before then. The announcement had an immediate impact on the Canadian capital markets and resulted in a significant decline in trading prices for publicly traded income trusts.

On December 15, 2006, the Minister released further guidance concerning the proposed tax changes, including guidance respecting "normal growth" for the purposes of this proposal, as well as the Finance Department's confirmation that it would not recommend any extension of the four year transition period. Bill C-52, the Budget Implementation Act, 2007, which received royal assent on June 22, 2007, contained rules relating to the tax treatment of specified investment flow-through trusts or partnerships, which are designed, among other things, to implement the proposal.

Following the October 31, 2006 announcement, management considered the potential impact and significance of the proposed tax changes to the Fund, and conducted a series of detailed analysis concerning the strategic direction of the Fund. In connection with this process, management considered a broad range of strategic alternatives, including without limitation, new corporate structures and acquisition opportunities.

The Trustees of the Fund formally discussed a potential conversion of the Fund from an income trust structure to a corporate structure, at which time management reviewed with the Trustees the proposed conversion and dividend policy for New Cargojet, and ultimately approved a proposal to convert the Fund from an income trust to a growth-oriented, dividend paying corporation.

The Arrangement

Pursuant to the Arrangement, it is anticipated that the holders of units of the Fund and Class B limited partnership units of Cargojet Holdings Limited Partnership will become the holders of common voting shares of New Cargojet on the basis of one common voting share for each Fund unit or Class B limited partnership unit so transferred. In order to comply with the Canadian ownership restrictions under the Canada Transportation Act, immediately upon the issuance of common voting shares to Voting Unitholders that are non-Canadian (as defined therein), it is anticipated that the common voting shares of non-Canadians will be converted into variable voting shares in accordance with the proposed Articles of New Cargojet. The restrictions on voting are expected to be similar to the current restrictions on voting set out in the Fund's declaration of trust.

New Cargojet will assume all of the covenants and obligations of the Fund in respect of the outstanding convertible debentures of the Fund.

It is anticipated that the board of directors of New Cargojet will initially be comprised of the current Trustees and directors of Cargojet GP Inc., being Terence Francis, Paul Godfrey, John Webster, Ajay Virmani and Dan Mills. The senior management of New Cargojet will be comprised of the current members of senior management of Cargojet GP Inc.

The conversion is subject to approval of more than two-thirds (66 2/3%) of the votes cast by Voting Unitholders, either in person or by proxy, at the Meeting. The conversion is also subject to the approval of the Ontario Superior Court of Justice and receipt of all necessary regulatory approvals. The Fund will apply to the Toronto Stock Exchange for the substitutional listing of the securities of New Cargojet, subject to New Cargojet satisfying the requirements of the Toronto Stock Exchange.

Effect on Distributions

The Fund is currently paying a monthly distribution at the rate of $0.042 per Fund unit. If the conversion is approved and becomes effective, the Fund expects to continue to pay a monthly distribution of $0.042 per Fund unit to holders of record on the last business day of each month up to but excluding the month in which the conversion becomes effective. However, any future distribution payments will be determined by the Board of Trustees in light of financial performance and anticipated business needs at the time a distribution is declared. If the Arrangement is not approved at the Meeting, the Board of Trustees will assess matters at that time to determine the Fund's course of action regarding any future distributions on the Fund units.

The board of directors of New Cargojet is expected to adopt a dividend policy upon completion of the conversion. However, any dividend payments will be determined by the board of directors of New Cargojet in light of New Cargojet's financial performance and its current and anticipated business needs at that time.

Annual General Meeting

The Annual and Special meeting of Unitholders of Cargojet Income Fund will be held at the TSX Gallery, the Exchange Tower, 130 King Street West, Toronto, Ontario on Tuesday, May 18, 2010. Registration will begin at 3:00p.m. followed by the meeting at 3:30p.m. EST.

Cargojet is Canada's leading provider of time sensitive overnight air cargo services. Cargojet operates its network across North America, transporting approximately 750,000 pounds of time sensitive air cargo each business night, utilizing a fleet of forty-one all cargo aircraft.

Notice on Forward Looking Statements:

This news release contains certain forward-looking information within the meaning of applicable Canadian securities laws. All information other than statements of present or historical fact is forward-looking information. Forward-looking information is often, but not always, identified by the use of words such as "anticipate", "believe", "plan", "intend", "objective", "continuous", "ongoing", "estimate", "expect", "forecast", "may", "will", "achieve", "project", "schedule", "should", or similar words suggesting future outcomes. In particular, this news release contains forward-looking statements relating to:

    
    -   the benefits of the Arrangement;
    -   the treatment of Voting Unitholders under tax laws;
    -   the business strategy of New Cargojet;
    -   the business to be carried on by New Cargojet following completion of
        the Arrangement;
    -   the potential distributions to be paid by the Fund; and
    -   the potential for dividend payments to be made by New Cargojet.
    

Forward-looking information regarding the perceived benefits of the Arrangement are based upon the financial and operating attributes of the Fund as at the date hereof, anticipated operating and financial results from the date hereof to the effective date of the conversion, the views of management and the Board of Trustees respecting the benefits associated with the Arrangement and current and anticipated market conditions.

By its very nature, forward-looking information involves inherent risks and uncertainties (both general and specific) and risks that the anticipated results will not be achieved. Undue reliance should not be placed on forward looking information, as a number of important factors could cause the actual results to differ materially from the beliefs, plans, objectives, expectations and anticipations, estimates and intentions expressed in the forward-looking information, including those set out below and those detailed elsewhere in this news release:

    
    -   inability to meet TSX listing requirements;
    -   inability to obtain required consents, permits or approvals,
        including the approval of the court of the Arrangement and Voting
        Unitholders' approval of the Arrangement;
    -   failure to realize anticipated benefits of the Arrangement, including
        anticipated cost savings; and
    -   liabilities inherent in the air cargo industry.
    

Readers are cautioned that the foregoing list is not exhaustive.

The forward-looking information contained herein is expressly qualified in its entirety by this cautionary statement. The forward-looking information contained herein is made as of the date of this news release and the Fund undertakes no obligation to publicly update such forward-looking statements to reflect new information, subsequent events or otherwise unless so required by applicable securities laws.

%SEDAR: 00022068E

For further information: P. Dhillon, Vice President Marketing, Public & Government Relations, Tel: (905) 501-7373, [email protected]

Modal title

Organization Profile

Cargojet Inc.

    Also from this source

  • CARGOJET ANNOUNCES TIMING OF SECOND QUARTER CONFERENCE CALL

  • Cargojet extends Agreement with Amazon

  • Cargojet Announces Closing of $250 Million Offering of Investment Grade Senior Unsecured Notes

Contact Cision

  • 866-245-2317
    from 8 AM - 10 PM ET
  • Become a Client
  • Request a Demo
  • Editorial Bureaus
  • Partnerships
  • General Enquiries
  • Media

Products

  • Cision Communications Cloud®
  • Media Monitoring
  • Content Distribution
  • Multimedia Distribution
  • Measurement & Analytics
  • Investor Relations

About

  • About Cision Canada
  • About Cision
  • Media Partners
  • Careers
  • Accessibility Statement
  • APAC
  • APAC - Simplified Chinese
  • APAC - Traditional Chinese
  • Brazil
  • Canada
  • Czech
  • Denmark
  • Finland
  • France
  • Germany
  • India
  • Indonesia
  • Israel
  • Japan
  • Korea
  • Mexico
  • Middle East
  • Middle East - Arabic
  • Netherlands
  • Norway
  • Poland
  • Portugal
  • Russia
  • Slovakia
  • Spain
  • Sweden
  • United States
  • Vietnam

My Services

  • All News Releases
  • Online Member Centre
  • Next Gen Communications Cloud
  • Cision Communications Cloud®
  • my CNW

Do not sell or share my personal information:

  • Submit via [email protected] 
  • Call Privacy toll-free: 877-297-8921

Contact Cision

Products

About

My Services
  • All News Releases
  • Online Member Centre
  • Next Gen Communications Cloud
  • Cision Communications Cloud
  • my CNW
877-269-7890
from 8 AM - 10 PM ET
  • Terms of Use
  • Information Security Policy
  • Site Map
  • Cookie Settings
  • Accessibility Statement
Copyright © 2025 CNW Group Ltd. All Rights Reserved. A Cision company.