Enbridge Income Fund Board Approves Restructuring

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The Enbridge Commercial Trust (ECT) board of trustees, which oversees the governance of the Enbridge Income Fund, has approved a plan of arrangement for restructuring the fund and will recommend that unitholders approve the arrangement at an annual meeting in May.

The proposed restructuring under the arrangement would involve the exchange of all publicly held trust units, which collectively represent a 28% economic interest in the fund – as well as a portion of the Enbridge Inc. interest in the fund – for shares of a taxable Canadian corporation to be called Enbridge Income Fund Holdings Inc. (EIFH). The scope of activities of EIFH would be limited to investment in the fund, and Enbridge would manage the business of EIFH, in addition to continuing in its current roles as administrator of the fund and manager of ECT.

Upon completion of the arrangement, public unitholders would retain their current proportionate economic interest in the fund, held indirectly through EIFH. The fund would cease to be a specified investment flow-through (SIFT) trust under Canadian tax rules and would not be subject to the SIFT tax scheduled to take effect in 2011. EIFH and Enbridge Inc. would be subject to corporate income tax on taxable income received from the fund.

SOURCE: Enbridge Income Fund Â

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