The Ontario Superior Court of Justice has issued a final order approving the plan of arrangement to convert Home Equity Income Trust to a corporate structure, the trust said Tuesday.

The conversion, which was previously approved by the trust’s unitholders at its annual and special meeting on April 30, will result in the reorganization of the income trust structure to a publicly-listed corporation that will own all the units of the trust.

Unitholders of the trust will receive, for each unit held, one common share of 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.

The conversion is part of the trust’s plan to continue its operating subsidiary, Canadian Home Income Plan Corporation (CHIP), as a federally-regulated, Schedule I Canadian bank.

Continuing CHIP as a bank is subject to the review and approval of an application to the federal Minister of Finance.

Management expects the conversion to take effect before the end of the second quarter.

“We are very pleased that the final court order has been issued approving the plan of arrangement”, says Steven Ranson, president and CEO, Home Equity Income Trust. “The establishment of the bank is intended to enhance the reliability and availability of funding for our core reverse mortgage business. We are excited about moving forward with our bank application”, adds Ranson.

IE