Jazz Air Income Fund completes transfer to Chorus
Jan. 4, 2011, Halifax - Chorus Aviation Inc. confirmed today that the previously announced plan of arrangement providing for the conversion from the income trust, Jazz Air Income Fund, to the dividend paying corporate structure, Chorus, has been completed.
January 4, 2011 By Carey Fredericks
As a result of the conversion, Fund Unitholders will receive one share of Chorus for each unit held.
The new Chorus shares will be posted for trading on the Toronto Stock Exchange ("TSX") with the trading symbols of CHR.A (for the new Class A Variable Voting Shares) and CHR.B (for the new Class B Voting Shares) on January 4, 2011. As part of the conversion Chorus has assumed all of the obligations of the Fund's convertible debentures which will also be posted for trading on the TSX on or before January 4, 2011 under the trading symbol CHR.DB. The Fund's trust units and convertible debentures (TSX: JAZ.UN, JAZ.DB) will be de-listed by the TSX.
"Completing this corporate conversion is a key step in support of our growth strategy," said Joseph Randell, President and Chief Executive Officer, Chorus. "As a corporation we intend to continue to offer our shareholders one of the industry's highest dividends and long-term value. The new organizational structure to be put into place upon conversion will help facilitate a strategy of growth and diversification."
The board of directors of Chorus has established a dividend policy pursuant to which a fixed dividend is anticipated to be paid to Chorus shareholders on a quarterly basis. The amount of any dividends payable by Chorus will be at the discretion of its board of directors and will be established based on certain terms and conditions. It is anticipated that dividends will initially be set at$0.15 per Chorus share per quarter, with the first Chorus dividend to be declared in respect of the quarter ending March 31, 2011.
It is anticipated that the corporate structure of Chorus will attract new investors, and provide a more active and attractive market for its shareholders.
Chorus, like its predecessor Jazz Air Income Fund, is subject to restrictions on voting by non-residents under the CanadaTransportation Act. As previously described in the Fund's proxy circular, Registered Unitholders who have delivered the required Declaration of Canadian Status with their Letter of Transmittal and non-registered Unitholders have provided the required information as to their Canadian status to their nominees will receive one Class B Voting Share per unit held and non-Canadians and person who have not completed such Declarations will receive one Class A Variable Voting Share per unit held. Any former registered Unitholders who have not yet completed such forms are urged to do so and any former non-registered holders who have not provided the required information to their nominees should contact such nominees.
Unitholders are also advised to contact their own tax advisors to obtain tax advice in connection with the conversion. The exchange of units of the Fund for shares in the capital of Chorus will trigger a capital gain or capital loss depending on each Unitholders' circumstances. If the exchange of units for shares results in a capital gain, eligible Unitholders may obtain a partial or full tax deferral by filing a tax election with the Canada Revenue Agency. You may request a tax election form and tax instruction letter from the Fund by writing to Investor Relations at 310 Goudey Drive, Enfield, Nova Scotia, B2T 1E4 or by fax at 902-873-2098.
The final cash distribution of $0.05 per unit for Unitholders of the Jazz Air Income Fund covering the period from December 1, 2010 to December 31, 2010 was segregated for the benefit of Unitholders prior to December 31, 2010 and will be distributed onJanuary 10, 2011 to Unitholders of record at the close of business on December 31, 2010 without any further action on the part of such Unitholders.