WesternOne Equity Income Fund Announces Planned Conversion to a Corporation

/NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN THE U.S./

VANCOUVER, July 18, 2012 /CNW/ - WesternOne Equity Income Fund ("WesternOne" or the "Fund") (Toronto Stock Exchange: WEQ.UN, WEQ.DB.B and WEQ.DB.C) today announced that it will be asking its unitholders to approve the conversion of the Fund from an income trust to a corporation (the "Conversion") at a special meeting of unitholders to be held on September 5, 2012 (the "Meeting").  The record date for the Meeting has been set as July 24, 2012.

The Conversion, which will be undertaken pursuant to a court-approved plan of arrangement under the Canada Business Corporations Act (the "Plan of Arrangement"), is subject to customary commercial conditions such as the receipt of regulatory approvals including the Toronto Stock Exchange. It is also subject to the approval of not less than two-thirds of the votes cast in person or by proxy at the Meeting.

Provided the Conversion is approved by the Fund's unitholders at the Meeting and all other approvals are obtained, the Conversion is expected to be effective as of December 31, 2012. Under the proposed Conversion, it is intended that unitholders will receive, on a tax-deferred basis, one common share of a newly-formed corporation, "WesternOne Inc.", for each Fund unit held. Non-resident unitholders should consult their own tax advisors as to the tax consequences of the Conversion.

If the Conversion is approved, it is expected that WesternOne Inc. will pay a dividend at the same level as the Fund's current monthly distribution of $0.05 per unit ($0.60 per unit annually) to allow for continued internally generated cash flow to support growth while providing sustainable monthly dividends to shareholders. The amount of any dividends payable by WesternOne Inc. from time to time will be at the sole discretion of its board of directors, and, consistent with the Fund's past practice, the level of dividends will be evaluated periodically based on a number of factors, including financial performance, future prospects and capital requirements of the business.

The existing convertible debentures of the Fund will become debentures of WesternOne Inc.  After the Conversion, the debentures will continue to be convertible, but into common shares of WesternOne Inc. in the same manner at which they are now convertible into units of the Fund.

The current members of the board of directors of WesternOne Equity GP Inc. and the board of trustees of the Fund are collectively the directors of WesternOne Inc., for a total of five directors. It is expected that the current officers and management of the Fund will become officers and management of WesternOne Inc.

The board of trustees of the Fund believes that the proposed Conversion is in the best interests of WesternOne, including for the following reasons:

• A tax deferred wind-up of the Fund's current trust structure is only permitted under the Specified Investment Flow-Through rules announced by the Department of Finance on October 31, 2006 if it is implemented before 2013 and the Plan of Arrangement provides for a tax-deferred method of exchanging units of the Fund for WesternOne Inc. shares;
  
  
• The Conversion is expected to give rise to a corporate structure that is recognizable and consistent with other public entities, thereby allowing WesternOne Inc.'s financial and operational performance to be more easily valued relative to its corporate peers;
  
  
• The corporate form of business entity is based upon a comprehensive statute and a significant body of law which is better understood by market participants, lenders, suppliers and customers;
  
  
• The Conversion is expected to give rise to a simplified tax and legal structure that is more in line with the majority of public entities, thereby lowering internal and external administrative costs; and
  
  
• The limitations upon non-resident ownership of units of a mutual fund trust would not be applicable to shares of a corporation, thereby possibly providing WesternOne Inc. with a potentially broader base of investors.

A management information circular for the Meeting outlining the details of the Conversion is expected to be mailed to the Fund's unitholders by early August 2012 and will also be available on SEDAR (www.sedar.com).

In addition to the Conversion, unitholders will be asked at the Meeting to separately approve an employee purchase plan and a unitholder rights plan for the Fund, as well as for WesternOne Inc. following completion of the Conversion. Each of these plans will be summarized in the management information circular for the Meeting and are subject to review and acceptance by the Toronto Stock Exchange. If approved, the rights plan will ensure, to the extent possible, that unitholders of the Fund, and shareholders of WesternOne Inc., following completion of the Conversion, are treated fairly in the event that a take-over bid is made for WesternOne. The rights plan will provide the board of WesternOne sufficient time to evaluate unsolicited take-over bids and to explore, develop and pursue alternatives that could maximize securityholder value. The proposed rights plan is substantially similar to other rights plans that have been adopted by a number of leading Canadian issuers and ratified by their securityholders. Neither the Fund nor WesternOne Inc. is aware of any specific take-over bid for WesternOne that has been made or is contemplated.

Forward-looking Information

Certain statements in this press release may constitute "forward-looking" information that involves known and unknown risks, uncertainties and other factors, and it may be that actual results, performance or achievements or industry results, are materially different from any future results, performance or achievements or industry results expressed or implied by such forward-looking information. Forward-looking information is identified by the use of terms and phrases such as "anticipate", "believe", "could", "estimate", "expect", "intend", "may", "plan", "predict", "project", "will", "would", and similar terms and phrases, including references to assumptions. Such information includes, without limitation, statements with respect to: the level of distributions and/or dividends, completion of the Conversion, tax treatment of Canadian resident unitholders arising from the Conversion, approvals of the Plan of Arrangement, reasons for the Conversion, certain rights of holders of convertible debentures of the Fund arising as part of the Conversion and adoption of an employee purchase plan and a unitholder rights plan. Actual events or results may differ materially.

Forward-looking information contained in this press release is based on certain key expectations and assumptions made by WesternOne, including, without limitation, expectations and assumptions respecting: the Fund's ability to obtain requisite consents or approvals related to the Conversion and the ability to realize the anticipated benefits of the Conversion, the outlook of WesternOne's business and the economy in Western Canada and the U.S., the supply and demand for WesternOne's products and services, management's assessment of future plans and operations and the Fund's ability to obtain requisite consents or approvals related to the employee purchase plan and unitholder rights plan. Although the forward-looking information contained in this press release is based upon what the WesternOne's management believes to be reasonable assumptions, WesternOne cannot assure investors that actual results will be consistent with such information. Forward-looking information reflects current expectations of management regarding future events and operating performance as of the date of this press release. Such information involves significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking information, and a description of these factors can be found under "Risk Factors" in WesternOne's Annual Information Form dated March 29, 2012, which is available on SEDAR (www.sedar.com).

The forward-looking information contained herein is expressly qualified in its entirety by this cautionary statement. Forward-looking information reflects management's current beliefs and is based on information currently available to WesternOne. The forward-looking information is made as of the date of this press release and WesternOne assumes no obligation to update or revise such information to reflect new events or circumstances, except as may be required by applicable law.

About WesternOne

WesternOne seeks to acquire and grow businesses in the construction and infrastructure services sector in order to generate stable and growing distributions to its unitholders as well as to achieve overall capital appreciation.

Additional Information

Additional information relating to WesternOne, including WesternOne's Annual Information Form and other public filings, is available on SEDAR at www.sedar.com or on WesternOne's website at www.weq.ca.

Trading Symbols

Toronto Stock Exchange: WEQ.UN, WEQ.DB.B and WEQ.DB.C

THE TORONTO STOCK EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR THE ACCURACY OF THIS RELEASE.

Carlos Yam, Chief Financial Officer
WesternOne Equity Income Fund
Suite 910, 925 West Georgia Street
Vancouver, BC  V6C 3L2
Phone: [phone]
E-mail: [email protected]