CALGARY, Nov. 4 /CNW/ -- Fort Chicago Energy Partners L.P. ("Fort Chicago") announced today that the board of directors of Fort Chicago Energy Management Ltd., the general partner of Fort Chicago (the "General Partner"), has determined that prior to the implementation of the specified investment flow-through ("SIFT") tax on January 1, 2011, Fort Chicago will be restructured from a limited partnership to a taxable Canadian corporation. The planned restructuring will involve the exchange by the holders of Class A limited partnership units of Fort Chicago ("Class A Units") for shares of a corporation. Following the planned transaction, Fort Chicago will no longer be a SIFT and will not be subject to the SIFT tax. Unitholders will have the opportunity to effect the exchange on a tax-deferred basis under Canadian income tax law. Further details of the restructuring transaction will be provided to unitholders during 2010. It is anticipated a special meeting of unitholders to approve the transaction will be held in the fourth quarter of 2010.

The board of directors of the General Partner has also determined that there will be no change in the distribution policy of Fort Chicago through 2010 and following the restructuring, with the current distribution amount of $1.00 per year being maintained in the form of a dividend following the move to a corporate structure, subject to any unforeseen economic, operating or other circumstances. The dividends paid by the new corporation are expected to be eligible dividends which will qualify for the enhanced federal dividend tax credit in Canada. Mr. Stephen White, Fort Chicago's President and Chief Executive Officer stated "We are confident that our long-life, high-quality assets provide Fort Chicago with a strong foundation to support distributions to our unitholders at present levels for the foreseeable future".

The board of directors of the General Partner also declared a cash distribution for November 2009 of $0.0833 per Class A limited partnership unit of Fort Chicago ("Class A Unit"). The distribution will be paid on December 23, 2009 to unitholders of record at the close of business on November 30, 2009.

Of this distribution, $0.0037 per Class A Unit will be considered U.S. source interest income and $0.0186 per Class A Unit will be considered U.S. source dividend income, each of which may be subject to U.S. withholding taxes. The balance of the cash distribution of $0.0610 per Class A Unit will be distributed without any deduction for U.S. withholding taxes. While this distribution is considered to be a return of capital for Canadian income tax purposes, unitholders are allocated a proportionate share of Fort Chicago's taxable income.