EDMONTON, Dec. 10 /CNW/ - K-Bro Linen Income Fund ("K-Bro") is pleased to announce that it has received a final order from the Alberta Court of Queen's Bench approving the plan of arrangement under the Business Corporations Act (Alberta) for the proposed conversion of K-Bro into a corporate entity named "K-Bro Linen Inc." Subject to satisfaction or waiver of certain closing conditions, the conversion is expected to take effect on January 1, 2011. The common shares of K-Bro Linen Inc. have been conditionally approved for trading on the Toronto Stock Exchange under the symbol "KBL".
K-Bro also announces a final cash distribution of 9.167 cents per unit of the Fund ("Units") for the period from December 1, 2010 to December 31, 2010, to be paid on December 31, 2010 to holders of record of Units on December 22, 2010.
K-Bro expects that K-Bro Linen Inc. will adopt a monthly dividend policy upon completion of the conversion. While K-Bro anticipates that K-Bro Linen Inc. will pay monthly dividends at the same rate of CDN$0.09167 per common share commencing February 15, 2011 for shareholders of record as of January 31, 2011 (with subsequent monthly dividends to be paid to shareholders of record as of the last business day of a calendar month during the fifteen days following the end of such month), the board of directors of K-Bro Linen Inc. will assess the final dividend payout level in light of the company's financial performance and its current and anticipated business needs at that time. As a corporation, K-Bro Linen Inc.'s dividend policy will be at the discretion of its board of directors. Future dividends, if any, will depend on the operations and assets of K-Bro Linen Inc. and will be subject to various factors, including, without limitation, the company's financial performance, fluctuations in its working capital, the sustainability of its margins, its capital expenditure requirements, obligations under its credit facilities, provisions of applicable law (including satisfying the dividend solvency test applicable to ABCA corporations) and other factors that the board of directors may deem relevant from time to time. There can be no guarantee that K-Bro Linen Inc. will maintain its dividend policy.
K-Bro is the largest owner and operator of laundry and linen processing facilities in Canada. K-Bro provides a comprehensive range of general linen and operating room linen processing, management and distribution services to healthcare institutions, hotels and other commercial accounts. K-Bro currently has seven processing plants in six Canadian cities: Quebec City, Toronto, Edmonton, Calgary, Vancouver and Victoria.
Additional information regarding K-Bro including the 2009 Annual Information Form and other required securities filings are available on our website at www.k-brolinen.com and on the Canadian Securities Administrators' website at www.sedar.com; the System for Electronic Document Analysis and Retrieval ("SEDAR").
This news release contains certain forward-looking information and statements ("forward-looking information") within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "guidance", "objective", "ongoing", "may", "will", "project", "should", "believe", "plans", "intends", "budget", "strategy" and similar expressions are intended to identify forward-looking information. In particular, but without limiting the foregoing, this news release contains forward-looking information pertaining to the following: the conversion of K-Bro to a corporation and the timing and tax effects thereof; the payment and amounts of future dividends; the time at which Canadian income taxes may be paid; and the listing of the shares of K-Bro Linen Inc. on the Toronto Stock Exchange.
The forward-looking information contained in this news release reflects several material factors and expectations and assumptions of K-Bro including, without limitation: the receipt of all necessary Unitholder, Court, stock exchange and other third party approvals; the continuance of existing (and in certain circumstances, the implementation of proposed) tax regimes; and the availability of cash to pay dividends following the conversion from a trust to a corporation. K-Bro believes the material factors, expectations and assumptions reflected in the forward-looking information are reasonable but no assurance can be given that these factors, expectations and assumptions will prove to be correct.
The forward-looking information included in this news release is not a guarantee of future conditions or performance and should not be unduly relied upon. Such information involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information including, without limitation: failure to receive all necessary Unitholder, Court, stock exchange and other third party approvals; changes in tax laws; acquisition and disposition activity that may affect the amount of tax pools and the time at which income taxes may be payable; insufficient cash to pay dividends; and certain other risks detailed from time to time in K-Bro's public disclosure documents.
The forward-looking information contained in this news release speak only as of the date of this news release, and none of K-Bro or its subsidiaries assumes any obligation to publicly update or revise them to reflect new events or circumstances, except as may be required pursuant to applicable laws.
For further information: For further information: Linda McCurdy, President & Chief Executive Officer, Chris Burrows, Vice-President & Chief Financial Officer, K-Bro Linen Income Fund, Phone: 780.453.5218, Email: [email protected], Web: www.k-brolinen.com