Precision Drilling Trust intends to convert to a growth-oriented corporation pursuant to a plan of arrangement under the Business Corporations Act (Alberta). Precision anticipates seeking approval from unitholders in conjunction with its 2010 annual and special meeting of unitholders (the "Meeting") and expects to complete the Conversion by May 31, 2010.
The Board of Trustees and the Board of Directors of the administrator of the Trust (together the "Board") believe that it is the right time to proceed with the Conversion for the following reasons:
The proposed Conversion will be completed in compliance with the distribution method provided for under the Income Tax Act (Canada). The Conversion requires the approval of Precision's unitholders, as well as customary court and regulatory approvals. An information circular and proxy statement will be mailed to Precision unitholders in connection with the meeting. To be implemented, the Conversion must be approved by not less than two-thirds of the votes cast by unitholders at the Meeting. Further details about the timing and mechanics of the Conversion will be communicated over the next two months.
The Board retained TD Securities Inc. ("TD Securities") to act as its financial advisor in connection with this transaction. Pursuant to this mandate, TD Securities has provided the Board with an opinion that, as at the date thereof and subject to the particular assumptions, considerations and limitations summarized therein, the consideration to be received by unitholders pursuant to the Arrangement is fair, from a financial point of view, to such unitholders. The full text of the TD Securities fairness opinion will be appended to the management information circular to be provided to unitholders in connection with the proposed Conversion.
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