Park Lawn and Park Lawn Company Limited had previously announced their intention to combine their respective businesses contemporaneously with the Conversion. It has, however, after further consideration and analysis, been determined that there is insufficient merit to proceed with a business combination at this time.
The Conversion will be effected pursuant to a plan of arrangement, the terms of which are anticipated to provide, among other things, that Park Lawn unitholders will receive one common share in a new public company for each Park Lawn trust unit they hold. The Conversion is intended to be effected on a tax-free, rollover basis for Canadian income tax purposes.
It is intended that the new public company in to which Park Lawn will convert will be called Park Lawn Corporation (“PLC”) and its common shares will be listed on the TSX Venture Exchange.
Park Lawn’s business will continue to be conducted by Park Lawn Management Services Inc. (“PLSMI”), which will be a wholly-owned subsidiary of PLC. It is expected the current board members of PLMSI and the current Trustees of Park Lawn will be directors of PLC and the current officers and management of PLMSI will become officers and management of PLC.
It is intended that PLC will pay an initial monthly dividend of $0.038 per month per share ($0.46 per year). This represents an 8% dividend yield based on the average trading price in 2010 of $5.75 per unit. It is Park Lawn’s understanding that dividends paid in respect of shares held by Canadian individuals outside of a Registered Retirement Savings Plan (“RRSP”), Registered Retire Income fund (“RRIF”), or Deferred Profit Sharing Plan (“DPSP”) will be eligible for enhanced Canadian Dividend Tax Credit. The current distributions of the Fund are 100% taxable for Canadian taxpayers. Canadian resident individuals holding shares of PLC outside of an RRSP, RRIF or DPSP are anticipated to receive approximately the same after-tax income when they receive the intended dividend as they would have if it was a trust distribution.
The Conversion is subject to unitholder, TSX Venture Exchange, court, regulatory and other customary approvals and requirements specific to a plan of arrangement undertaken in accordance with applicable corporate legislation.
A management information circular and proxy statement outlining the details of the Conversion will be mailed to Park Lawn unitholders in connection with a special meeting of unitholders to be held on December 10, 2010 to approve the Conversion. To be implemented, the Conversion must be approved by not less than two-thirds of the votes cast by unitholders voting at the unitholder meeting. Completion of the Conversion is anticipated on or before December 31, 2010.
The Board of Trustees of Park Lawn, based upon its own investigations, on information provided by the management of Park Lawn and on the advice of Park Lawn’s professional advisors, has unanimously concluded that the Conversion is fair to unitholders and is in the best interests of Park Lawn and its unitholders, and recommends that unitholders vote to approve the Conversion.
Park Lawn is an unincorporated, open-ended, limited purpose trust created on July 12, 2006. Park Lawn, through its subsidiaries, Park Lawn Limited Partnership and PLMSI, is the owner and operator of six cemeteries in the Greater Toronto Area. The six cemeteries are: Park Lawn Cemetery, Riverside Cemetery & Crematorium, Sanctuary Park Cemetery, Westminster Cemetery, Crematorium & Mausoleum, Forest Lawn Crematorium & Mausoleum, and Hillcrest Cemetery. The cemeteries have been in existence and in operation since 1892. The cemeteries and crematoria offer products and services associated with cremation, burial rights and services.
In addition, Park Lawn, through its subsidiaries, is a 50% owner of Bloorpark Developments Inc., an entity established for the development of the Kingsway Condominium project on Bloor Street West.
This Press Release contains forward-looking statements that involve assumptions and estimates that may not be realized and are based on information currently available to Park Lawn. Actual results may differ materially from results discussed in forward-looking statements as they are subject to a number of risks and uncertainties.