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Press release from CNW Group


Tuesday, September 14, 2010

Westshore Terminals Income Fund - Q3 DISTRIBUTION AND FUND RESTRUCTURING ANNOUNCEMENTS20:00 EDT Tuesday, September 14, 2010VANCOUVER, Sept. 14 /CNW/ - Westshore Terminals Income Fund (TSX: WTE.UN) (the "Fund") announced today that a cash distribution of $34,155,007 (representing $0.46 per trust unit) will be paid on or before October 15, 2010 to unitholders of record at September 30, 2010 as compared to $23,760,005 (representing $0.32 per trust unit) for the same period in 2009. $0.38 per unit of the Q3 distribution is derived from the results from operations of Westshore Terminals Limited Partnership ("Westshore") in the current period, and $0.08 per unit comes from Westshore's cash reserves.For the third quarter of 2010, Westshore anticipates that its tonnage throughput will be approximately 6.3 million tonnes as compared to 5.4 million tonnes for the same period in 2009. Tonnage throughput to September 30, 2010 is anticipated to be approximately 18.5 million tonnes compared to 14.9 million tonnes over the same period in 2009.Based on estimates provided periodically to Westshore by its customers, Westshore anticipates that total throughput for 2010 should be in excess of its previous 23.5 million tonnes record set in 1997, as compared to the 20.1 million tonnes shipped in 2009.The Trustees have approved a process for conversion of the Fund to a corporation effective January 1, 2011. A Special Meeting of Unitholders has been called for November 4, 2010 to consider and vote on the proposal. Under the proposal Unitholders will receive a combination of shares and debt in exchange for their Fund Units. The shares will be issued by a newly formed public company ("Westshore Corp"). The debt, in the amount of $5.00 per existing Unit, will be issued in the form of Notes by a wholly owned subsidiary of Westshore Corp. The Notes will mature in 2040 and bear a commercial rate of interest at a rate to be set in early October 2010. The debt will be secured, but can be subordinated to any senior debt incurred in the future by the enterprise (that might be used for future expansion opportunities, for example). The shares and debt will be separate instruments but will be listed and trade together as units.Following the conversion of the Fund, unitholders will receive interest on the Notes and dividends on the shares based on the same record date and payment date. It is anticipated that the dividends on the shares will be paid on essentially the same basis as is the current distribution policy of the Fund. The current distribution policy is to distribute to unitholders all of its earnings after interest (including on the new notes) and taxes but before depreciation and unrealized gains or losses on forward exchange contracts, less amounts equal to the expected cash requirements of Westshore, such as capital expenditures and special pension contributions.As previously announced, the Trustees of the Fund have considered the options open to the Fund in respect of conversion to the corporate form which is desirable as a result of tax changes that will become effective on January 1, 2011. That consideration has included normalization of the debt/equity structure of the enterprise, which has been debt free while operating under a partnership/trust structure since 2005. It would be unusual for the enterprise to continue debt free in the corporate form, and the Fund has received advice that a number of options exist to put in place a debt component of the corporation's capitalization. Having considered the available options, the Trustees have determined that having a subordinated debt component held by public securityholders and traded in conjunction with the shares of Westshore Corp is in the best interests of the existing Fund Unitholders, and will also be in the best interests of securityholders of the resulting corporate entities.Full details of the proposed conversion and of the mechanics for exchanging existing Fund Units for new securities will be contained in the Information Circular of the Fund for the Special Meeting of Unitholders, which the Fund expects to circulate around October 7, 2010.For further information: Nick Desmarais, Secretary, (604) 488-5214