TORONTO--(BUSINESS WIRE)--Chemtrade Logistics Income Fund (TSX: CHE.UN) (“Chemtrade”) announced today that it has declared a cash distribution (the “July Distribution”) of $0.05 per unit for the month of July 2020 payable on August 31, 2020 to unitholders (“Unitholders”) of record at the close of business on July 31, 2020. Holders of units who are non-residents of Canada will be required to pay all withholding taxes payable in respect of any distributions of income by Chemtrade.
In addition, Chemtrade also announced today the commencement of a Distribution Reinvestment Plan (“DRIP” or the “Plan”). Under the terms of the Plan, eligible Unitholders may elect to reinvest all or a portion of their regular monthly distributions in additional trust units (the “Units”) of Chemtrade, without paying any commissions, service charges or brokerage fees under the Plan. Units purchased for participants under the Plan will be newly issued by Chemtrade from treasury or will be existing Units purchased on the open market through the facilities of a stock exchange. Under the Plan, the board of trustees of Chemtrade (the “Board”) determines which of these two sources will be used. In order to be eligible to participate in the Plan, a holder must be resident in Canada and the beneficial holder of at least one whole Unit.
The Board has determined that upon implementation of the Plan, Units purchased under the Plan will be newly issued by Chemtrade from treasury at the volume-weighted average of the daily closing prices of the Units on the Toronto Stock Exchange for the five trading days immediately preceding the relevant distribution payment date. In addition, with each distribution reinvestment, participants will receive a “bonus” distribution (“Bonus”) of Units equal to 3% of the amount of the cash distribution reinvested pursuant to the Plan. The manner of determining the purchase price, the election to issue Units from treasury and the amount of the Bonus will remain in place until the Board determines otherwise.
Units may be purchased under the Plan commencing with the July Distribution. Enrolment and participation in the Plan may be effected only through brokers, investment dealers, financial institutions or other nominees in their capacity as participants in the CDS depository service who hold Units registered in the name of CDS on behalf of eligible beneficial holders of Units and who are acting on behalf of such eligible beneficial holders of Units (each, a “CDS Participant”). A Unitholder who holds Units through a CDS Participant may elect to enrol in the Plan by notifying his or her CDS Participant that he or she wishes to participate under the Plan. Beneficial holders of Units should consult their CDS Participant to determine any other procedures for participation in the Plan. The administrative practices of CDS Participants may vary and the various dates by which actions must be taken and the required documentation may not be the same.
The Plan is subject to certain limitations and restrictions and interested parties are encouraged to review the full text of the Plan. The Plan is available on Chemtrade’s website at www.chemtradelogistics.com.
To facilitate the implementation of the Plan, the Board has determined to amend certain sections of Chemtrade’s amended and restated declaration of trust dated May 12, 2016 (the “Declaration of Trust”) to provide that no taxable income of Chemtrade will be allocated to such Unitholders in respect of any Bonus paid to Unitholders who participate in the Plan and other minor clerical corrections. The Board is of the opinion that the amendments serve to remove conflicts or inconsistencies in the Declaration of Trust or to make minor corrections which are, in the Board’s opinion, necessary or desirable and not prejudicial to the Unitholders and, therefore, the conditions in the Declaration of Trust setting out the circumstances in which the Board may amend the Declaration of Trust without the consent, approval or ratification of the Unitholders have been satisfied. The Board intends that the amendments to the Declaration of Trust be effective as of July 8, 2020. The amended and restated declaration of trust dated July 8, 2020 will be filed and made available under Chemtrade’s profile on SEDAR at www.sedar.com.
Chemtrade operates a diversified business providing industrial chemicals and services to customers in North America and around the world. Chemtrade is one of North America’s largest suppliers of sulphuric acid, spent acid processing services, inorganic coagulants for water treatment, sodium chlorate, sodium nitrite and phosphorus pentasulphide. Chemtrade is a leading regional supplier of sulphur, chlor-alkali products, liquid sulphur dioxide, potassium chloride, sodium hydrosulphite and zinc oxide. Additionally, Chemtrade provides industrial services such as processing by-products and waste streams.