Crown Hill Fund and Crown Hill Capital Corp., the manager and the trustee of the fund, Thursday confirmed their proposed reorganization plan with certain Citadel Group of Funds.

Crown Hill Fund unitholders will have the opportunity to vote on the proposed reorganization, including the merger of eight Citadel Funds into the Crown Hill Fund, as the continuing fund, to be renamed Citadel Income Fund, at a special meeting to be held on September 3.

Unitholders of the Citadel Funds will also have the opportunity to vote on the proposed reorganization, including the merger of the Citadel Funds into the Crown Hill Fund, at special meetings to be held on the same day.

“Citadel Fund Administrator believes that the reorganization is in the best interest of unitholders and significantly increases long-term value,” Citadel Group of Funds said in a release.

With Income trusts set to lose their favourable tax treatment at the end of 2010, “it is essential that the investment strategies of the funds be expanded,” Citadel said.

Following the reorganization, “the strategy of Citadel Income Fund will be refocused to investing in a broad variety of income-producing securities including income trusts, common shares and debt securities.”

Jarislowsky, Fraser Ltd., the independent investment counsel firm and investment manager to Crown Hill Fund, has been selected as investment manager for Citadel Income Fund.

In a statement, Crown Hill Capital Corp. said “the independent members of the board of the manager and of Citadel Fund Administrator, and the Independent Review Committee of Crown Hill Fund and of the Citadel Funds will review and examine the reorganization, and their respective recommendations will be contained in the applicable information circular to be sent to unitholders of the fund and to unitholders of the Citadel Funds in advance of the special meetings.”

The Citadel Funds to be merged are:

• Citadel Premium Income Fund (CPF.UN, TSX);
• Citadel S-1 Income Trust Fund (SDL.UN, TSX);
• Citadel Stable S-1 Income Fund (CSR.UN, TSX);
• Citadel SMaRT Fund (CRT.UN, TSX);
• Citadel HYTES Fund (CHF.UN, TSX);
• Citadel Diversified Investment Trust (CTD.UN, TSX);
• Series S-1 Income Fund (SRC.UN, TSX); and
• Equal Weight Plus Fund (EQW.UN, TSX).

In addition to the approval of the unitholders of Crown Hill Fund and the Citadel Funds, the reorganization is subject to the approval of applicable regulatory authorities, including the Toronto Stock Exchange.

IE