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Morneau Shepell Converts Income Trust to Corporation

Posted by on Jan 1, 2011 in Industry News | 0 comments

TORONTO, ONTARIO–(Marketwire – Jan. 1, 2011) Morneau Shepell Inc. (“Morneau Shepell”) (TSX:MSI) announced today that it has received the requisite regulatory approvals and third-party consents required to complete the reorganization (the “Reorganization”) of Morneau Sobeco Income Fund (the “Fund”) (TSX:MSI.UN) from an income trust structure into a public corporation named Morneau Shepell Inc.

The Reorganization was approved by the Ontario Superior Court of Justice on December 2, 2010. Morneau Shepell now directly and indirectly operates the businesses which were previously operated by the Fund and its subsidiaries. The management and trustees of the Fund are now the management and directors of Morneau Shepell.

Prior to the Reorganization, holders of class B limited partnership units (the “LP Units”) of Morneau Sobeco Group Limited Partnership, a subsidiary of the Fund, received common shares in the capital of Morneau Shepell (the “Shares”) in exchange for their LP Units, on a one-for-one basis. Pursuant to the Reorganization, holders of Fund units (the “Units”) received Shares in exchange for their Units, on a one-for-one basis. Morneau Shepell now has 47,910,409 Shares outstanding.

The Shares are listed on the Toronto Stock Exchange under the symbol “MSI”.

Morneau Shepell also announced that it has also entered into an amended and restated credit agreement effective January 1, 2011 for a term of four years. The credit facility provides for a term loan of $130 million and a revolving facility of $75 million.

The terms of the amended and restated credit agreement are similar to those contained in the agreement previously entered into by a subsidiary of the Fund with the same lending syndicate. However the Debt to EBITDA covenant in the new agreement is 3.25 to 1 for 2011 and 3.0 to 1 thereafter.

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