EN.PR.A Proposes Term Extension

Energy Split Corp. II has announced:

that its Board of Directors has approved a proposal to reorganize the Company. The reorganization will permit current holders of both Capital Yield Shares and ROC Preferred Shares to extend their investment in the Company beyond the scheduled redemption date of December 16, 2007 for up to an additional 3 years. Under the proposed reorganization, holders of ROC Preferred Shares will be entitled to receive a new coupon rate which will be fixed prior to the time of the shareholder meeting described below in the context of market conditions at that time. In approving the proposal to reorganize the Company, the Board received and relied on the financial advice and recommendations of Scotia Capital Inc.
    A special meeting of holders of Capital Yield Shares and ROC Preferred Shares will be held on October 23, 2007 to consider and vote upon the proposed reorganization. Details of the proposed reorganization will be outlined in an information circular to be prepared and delivered to holders of Capital Yield Shares and ROC Preferred Shares in connection with the special meeting and will be available on www.sedar.com.

It is, of course, impossible to comment meaningfully on this proposal until the “new coupon rate” has been disclosed.

EN.PR.A is tracked by HIMIPref™, but is not included in any of the indices due to low average volume. There are a mere 1,209,398 shares outstanding, according to the Toronto Stock Exchange.

Term extensions this year have been approved for DFN.PR.A and FFN.PR.A; the proposal for FTN.PR.A was denied by the capital stockholders.

2 Responses to “EN.PR.A Proposes Term Extension”

  1. […] ‘They never change their dividends?’, you ask, ‘What, never?’ Well … hardly ever. Every now and then a company will seek to change the terms of a preferred share issue (extending the maturity date of a split-share preferred is a recent example) and sweeten the dividend to make the change more palatable. Such examples are notable mainly for their rarity. […]

  2. […] Further to the previously noted proposal Energy Split II Corporation has announced: that holders of its Capital Yield Shares and holders of its ROC Preferred Shares have approved amendments to the articles of the Company extending the termination date of the Company for an additional three years to December 16, 2010. … Holders of ROC Preferred Shares will be able to continue to enjoy quarterly fixed cumulative preferential tax efficient distributions on the ROC Preferred Shares for an additional three years at an increased rate equal to the greater of (i) 5.00% and (ii) the Government of Canada three year bond rate as at November 9, 2007 plus 0.75%, rounded down to the nearest 0.05%. The Company will announce the actual rate on the ROC Preferred Share on November 9, 2007. … The reorganization will only be implemented if a minimum of 1,280,000 Capital Yield Shares remain issued and outstanding following exercise of the Special Retraction Right by holders on or before November 16, 2007. If this condition is not satisfied, the Company will redeem the Capital Yield Shares and the ROC Preferred Shares on December 16, 2007 as originally contemplated. […]

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