Cathedral Energy Services Income Trust converting to corporation by year's end

By The Canadian Press

CALGARY - Cathedral Energy Services Income Trust (TSX: CET-UN.TO) has announced it will convert to a corporation in a reorganization expected to be completed before the end of the year.

Exact details of the restructuring were not disclosed in a company news release Wednesday.

But as part of the conversion, distributions are being suspended effective this month, it said.

The Calgary-based trust added that it expected to pay quarterly dividends of six cents a share after the conversion, with the first dividend being for the fourth quarter of 2009 and payable in January 2010.

Like many such trusts, Cathedral said it was reacting to tax changes that it said will effectively eliminate the public income trust structure effective Jan. 1, 2011.

The conversion is subject to the approval of 66 2/3 per cent of the votes cast by unitholders as well as court and regulatory approval and various commercial conditions, including lender consent, Cathedral said.

Cathedral provides oilfield services to oil and natural gas companies in Western Canada through six divisions.

Its units were unchanged at $3.68 Wednesday on the Toronto Stock Exchange.