At Thursday’s annual and special meeting, 79.6% of the units represented were cast in favour of the plan, Home Equity says.

The conversion is part of the trust’s plan to continue its operating subsidiary, Canadian Home Income Plan Corp. (“CHIP”), as a federally-regulated, Schedule I Canadian bank. The new bank will be called HomEquity Bank.

By obtaining a bank charter, HomEquity Bank will have access to retail deposits sourced through deposit brokers. Continuing CHIP as a bank is subject to the review and approval of an application to the Minister of Finance. The bank application will not be considered until the conversion of trust to a corporate structure has been completed.

“We are very pleased that our unitholders support our plan to continue CHIP as a bank. Obtaining unitholder approval of the conversion is a critical step in the process”, says Steven Ranson, president and CEO, Home Equity Income Trust. “The establishment of the bank will enhance the cost and availability of funding for our core reverse mortgage business,” adds Ranson.

The conversion to a corporation will result in the exchange of units of the trust for shares of a publicly listed corporation that will own all the units of the trust. Trust unitholders will receive, for each unit held, one common share of the corporation on the effective date of the conversion.

The trust anticipates that the conversion will be completed on a tax-free rollover basis for Canadian residents.

Now that unitholder approval has been obtained, a final order of the Ontario Superior Court of Justice approving the plan of arrangement for the conversion will be sought in early May.

The Toronto Stock Exchange has conditionally approved the substitutional listing of the corporation’s shares.

Home Equity management expects the conversion to take effect before the end of the second quarter.

At Thursday’s meeting, the unitholders also ratified and approved the shareholder rights plan of the corporation adopted by the board of directors of the corporation.

IE