|By Marketwired .||
|February 18, 2014 03:02 PM EST||
TORONTO, ONTARIO -- (Marketwired) -- 02/18/14 -- The board of trustees (the "Trustees") of Dominion Citrus Income Fund (TSX: DOM.UN) ("DCIF" or the "Trust") announces that the Trust has entered into an agreement (the "Agreement") with Dominion Citrus Limited ("DCL") pursuant to which the Trust has agreed to grant an interest holiday from January 1, 2014 to July 1, 2015 with respect to interest owing to the Trust by DCL on approximately $19 million of secured participating notes of DCL (the "Notes") held by the Trust. The Trust also provided an interest holiday to DCL in 2013.
Interest on the Notes at the base rate of 5% will amount to approximately $1,440,000 for the period from January 1, 2014 to July 1, 2015. DCL's management has advised the Trust that, while it expects to generate a positive cash flow from operations during 2014, it will require that cash flow to sustain planned operational expenditures to grow and strengthen the business.
In exchange for Trust agreeing to waive the interest payments on the Notes for the period from January 1, 2014 to July 1, 2015, DCL has provided the Trust with an option to purchase all of the outstanding shares of Dominion Farm Produce Limited ("DFPL") at Fair Market Value (as defined in the Agreement) for a period ending January 1, 2019. If DCIF exercises such right, the Trust may pay the Fair Market Value for the DFPL shares in cash or by forgiving outstanding accrued interest and principal of the Notes equal to the Fair Market Value. If DCIF pays DCL in cash for the DFLP shares, DCL has agreed to use such cash to make a payment on the Notes.
The Agreement is available on SEDAR under the Trust's profile at www.sedar.com.
The Fund is a publicly traded, unincorporated, open-ended limited purpose income trust. On January 1, 2006, all of the common shares of DCL were exchanged for trust units of the Fund. The trust units are listed on the TSX under the symbol DOM.UN. The Series A preference shares of DCL are listed on the TSX under the symbol DMN.PR.A.
Dominion is a diversified food company supplying fresh produce to a wide variety of customers in retail, foodservice and food distribution businesses. Dominion provides procurement, processing, repacking, sorting, grading, warehousing and distribution services to its major domestic markets being Ontario and Quebec. Dominion also supplies products to customers in the United States. The Fund's website may be accessed at www.dominioncitrus.com.
Cautionary Statement Regarding Forward Looking Information and Statements
Certain statements contained in this press release contain "forward-looking information" pursuant to Canadian securities laws ("forward-looking statements"). Forward-looking statements relate to future events or the DCIF's or DCL's future performance, including the exercise of the Option, redemption of Notes and the ability of DCL to make interest payments. All statements other than statements of historical fact are forward-looking statements. The use of any of the words "anticipate", "plan", "contemplate", "continue", "estimate", "expect", "intend", "propose", "might", "may", "will", "shall", "project", "should", "could", "would", "believe", "predict", "forecast", "pursue", "potential" and "capable" and similar expressions are intended to identify forward-looking statements. These forward-looking statements may be affected by the risks and uncertainties in DCIF's and DCL's business, including those described in DCIF's most recent annual information form filed on SEDAR at www.sedar.com. Any forward-looking statements speak only as of the date of this press release, and DCIF assumes no obligation to update or revise any forward-looking statement to reflect events or circumstances arising after the date of this press release except as required by applicable securities laws.
Dominion Citrus Income Fund
Chairman Board of Trustees