Chemtrade Logistics Income Fund Announces Plans for Conversion to A Simplified New Corporate Structure to Support Long Term Growth

• Simplifies Chemtrade’s structure and enhances comparability with publicly traded peers
• Broadens access to global investors by removing the non-resident ownership restrictions
• Provides greater financial flexibility to execute Chemtrade’s Vision 2030 growth strategy
• Expected to maintain the current annualized distribution level through a quarterly dividend
  
  

TORONTO, Oct. 09, 2026 (GLOBE NEWSWIRE) -- Chemtrade Logistics Income Fund (TSX: CHE.UN; OTCQX®: CGIFF) (“Chemtrade” or the “Fund”) announced today a proposed conversion of the Fund from an income trust to a corporate structure pursuant to a court-approved statutory plan of arrangement (the “Plan”), and subject to the terms and conditions set forth in an arrangement agreement entered into between the Fund and Chemtrade Inc. (“PubCo”) dated October 9, 2026 (the “Arrangement Agreement”).

Subject to the receipt of certain approvals, unitholders of the Fund (“Unitholders”) will receive one common share of PubCo (each, a “PubCo Common Share”), a new public corporation formed under the Business Corporations Act (Ontario) (the “OBCA”), for each unit of the Fund (each, a “Unit”) held by such Unitholder. The transactions under the Plan are expected to be completed on or about December 18, 2026, subject to obtaining Unitholder, stock exchange and court approvals and the satisfaction of all other customary conditions.

“By focusing on operational excellence, disciplined commercial execution, and balance sheet optimization, Chemtrade today is a different company than it was several years ago. Our Vision 2030 framework is centered on building upon this foundation with a combination of organic and acquisition growth while delivering strong per unit returns,” said Scott Rook, Chief Executive Officer of Chemtrade. “As we continue to focus on delivering value to our unitholders and executing on our growth targets, we believe a corporate structure is better aligned with the company’s long-term growth objectives. We believe the proposed conversion will provide additional flexibility and make it easier to access larger pools of capital, particularly outside of Canada, as we continue to invest in our operations and pursue organic and external growth opportunities.”

Rohit Bhardwaj, Chemtrade’s Chief Financial Officer, added, “Over the past several years, we have focused on strengthening our balance sheet, optimizing our capital structure, and lowering our cost of capital. Converting to a corporate structure is an important next step in that progression and we expect that it will broaden our investor base over time. While the conversion will reduce the historical advantages to Chemtrade of the flow-through aspects provided by the income trust structure, following conversion, much of this benefit can now be directly realized by our taxable Canadian shareholders in the form of eligible dividends.”

Rationale and Benefit of the Plan

The Fund is a publicly traded open-ended trust established under the laws of the Province of Ontario. The principal considerations in favour of converting the Fund to a corporation are to expand Chemtrade’s investor base, simplify the capital structure to one that is more generally accepted and understood by the capital markets and global investors, permit more streamlined comparison of financial and operational performance to Chemtrade’s corporate peers, and remove the inherent restriction on non-resident ownership (under the Fund’s existing Declaration of Trust, ownership of Units by non-residents of Canada cannot exceed 49%).

After due consideration of available information and financial, legal and accounting advice, and after considering their duties and responsibilities to the Unitholders, the trustees of the Fund (the “Trustees”) unanimously concluded that the Plan is in the best interests of the Fund and fair to the Unitholders and recommend that Unitholders vote in favour of the Plan.

Dividends Under Corporate Structure

The conversion to a corporate structure is not expected to have an impact on Chemtrade’s distribution/dividend policy.

Consistent with past practice, the Fund and PubCo are expected to continue declaring monthly distributions through the completion of the conversion and until the end of 2026. The Fund’s final distribution is expected to be declared on or about November 19, 2026 and paid on December 31, 2026 to Unitholders of record as of November 30, 2026. Following the effective date of the Plan, PubCo is expected to declare a monthly dividend in respect of December 2026 to facilitate the transition from the Fund’s historical monthly distribution practice.

Thereafter, commencing in 2027, it is expected that PubCo’s board of directors (the “PubCo Board”) will establish a quarterly dividend policy. Following the effective date of the Plan, the annualized dividend rate of PubCo is expected to be consistent with the Fund’s current annualized distribution rate, with the first quarterly dividend expected to be declared in respect of the quarter ending March 31, 2027. However, the amount and timing of the payment of any dividends are not guaranteed and will be subject to the discretion of the PubCo Board and will be subject to PubCo’s earnings, financial requirements, applicable solvency tests under the OBCA and other relevant conditions. PubCo’s dividend policy will continue to be designed to provide investors with income while preserving financial flexibility to fund growth.

Details of the Plan

Pursuant to the Plan, Unitholders will receive one PubCo Common Share for each Unit held. Following the completion of the Plan, PubCo will effectively own and control all of Chemtrade’s business and assets in place of the Fund. The Fund intends to apply to cease to be a reporting issuer and will subsequently be terminated at a later date.

The Plan is expected to be completed on or about December 18, 2026, subject to obtaining Unitholder, stock exchange and court approvals, as well as the satisfaction of all other conditions precedent. Shortly following the effective date of the Plan, the PubCo Common Shares are expected to commence trading on the Toronto Stock Exchange (the “TSX”) under the ticker symbol “CHEM”.

The exchange of Units for PubCo Common Shares will occur on a taxable basis, which may result in a taxable event for certain Unitholders as more particularly described in the Meeting Circular (as defined below). Unitholders should consult their own legal and tax advisors as to the tax consequences in their particular circumstances.

Following completion of the transactions under the Plan, PubCo will continue to be led by Scott Rook, the Chief Executive Officer of the Fund, and the proven management team, and the PubCo Board will be composed of the current Trustees.

Security-Based Compensation Plan

In connection with the Plan, each outstanding deferred unit issued by the Fund (each, a “DU”), to the extent it has not been settled as of the effective date of the Plan, shall be exchanged for one deferred unit issued by PubCo (each, a “Replacement DU”). The Replacement DUs are expected to be governed by the terms and conditions of the security-based compensation plan to be adopted by PubCo (the “PubCo DU Plan”), subject to approval of the PubCo DU Plan by the TSX and Unitholders. This exchange is intended to be economically neutral to holders of DUs, as the PubCo DU Plan is expected to be substantively the same as the Fund’s existing deferred unit plan, except that each Replacement DU will entitle the holder thereof to receive a PubCo Common Share rather than a Unit.

Special Meeting and Unitholder Approval

The Plan will be subject to Unitholder approval at a special meeting of Unitholders (the “Special Meeting”), expected to be held on December 7, 2026 at 10:00 a.m. (Eastern time). The Plan must be approved by at least 66 2/3% of the votes cast by Unitholders voting in person or by proxy at the Special Meeting.

Complete details of the terms of the Plan and a copy of the Arrangement Agreement will be provided in an information circular (the “Meeting Circular”) to be mailed to Unitholders entitled to receive notice of and vote at the Special Meeting, which will be made available and filed on SEDAR+ at www.sedarplus.ca. Unitholders are strongly urged to review and evaluate the information in the Meeting Circular once mailed.

At the Special Meeting and in accordance with the policies of the TSX, Unitholders will also be asked to approve the PubCo DU Plan, the form of which will be included in the Meeting Circular. The PubCo DU Plan must be approved by a majority of the votes cast by Unitholders voting in person or by proxy at the Special Meeting.

Fund Debentures and Guarantees

The Fund’s obligations with respect to its outstanding 7.00% unsecured subordinated debentures (the “Debentures”) will also be assumed by PubCo. PubCo will also assume the guarantor obligations of the Fund under each of the indentures governing the 6.375% senior unsecured notes due August 28, 2029 and the 5.750% senior unsecured notes due October 1, 2032 of Chemtrade Logistics Inc. (collectively, the “Notes”). The holders of Debentures and Notes are not required to take any specific action in connection with the assumption by PubCo of the Fund’s obligations.

Outstanding Credit Facilities

The Fund currently guarantees, as parent guarantor, a credit facility agreement with certain of its subsidiaries, which will mature in October 2030 and consists of a revolving credit facility of $580 million U.S., with two separate swing lines of $10 million U.S. each, as well as an accordion feature which can increase the credit facility up to $400 million U.S., pursuant to which the Fund has delivered a guarantee and certain security. From time to time in the ordinary course, the Fund may seek to increase the amount available under its revolving credit facility to meet its financing needs. It is expected that PubCo will deliver similar guarantees and security as the Fund for the credit facility either in its current form or in an expanded form, as may be further amended, extended or modified in the ordinary course of business prior to the effective date of the Plan.

An accompanying slide deck is available on Chemtrade’s website at www.chemtradelogistics.com.

About Chemtrade

Chemtrade operates a diversified business providing industrial chemicals and services to customers in North and South America. Chemtrade is one of North America’s largest suppliers of sulphuric acid, spent acid processing services, inorganic coagulants for water treatment, sodium chlorate, sodium nitrite and sodium hydrosulphite. Chemtrade is also a leading producer of high purity sulphuric acid for the semiconductor industry in North America. Chemtrade is a leading regional supplier of sulphur, chlor-alkali products, and zinc oxide. Additionally, Chemtrade provides value-added water solutions, as well as industrial services such as processing by-products and waste streams.

Caution Regarding Forward-Looking Statements

Certain statements contained in this news release constitute forward-looking statements within the meaning of certain securities laws, including the Securities Act (Ontario). Forward-looking statements can be generally identified by the use of words such as “anticipate”, “continue”, “estimate”, “expect”, “expected”, “intend”, “may”, “will”, “project”, “plan”, “should”, “believe” and similar expressions. Specifically, forward-looking statements in this news release include statements respecting certain future expectations about: the Plan and structuring thereunder, including the exchange of Units for PubCo Common Shares; the exchange of Units for PubCo Common Shares occurring on a taxable basis and the related tax consequences for certain Unitholders; expectations regarding potential increases to the amount available under the credit facility; the expectation that PubCo will deliver guarantees and security similar to those of the Fund for the credit facility, in its current or expanded form, as may be further amended, extended or modified in the ordinary course of business prior to the effective date of the Plan; the approvals required in connection therewith, including Unitholder, stock exchange and court approvals; expectations regarding the timing of the Special Meeting and the expected mailing of the Meeting Circular; the completion and anticipated effective date of the Plan; the expected listing of the PubCo Common Shares on the TSX and the ticker symbol; the expected timing and amounts of monthly distributions and dividends to the end of 2026; the expected quarterly dividend policy of PubCo commencing in 2027, including the expected annualized dividend rate and the timing of the first quarterly dividend; expected terms of the PubCo DU Plan and required approvals thereof; the Vision 2030 framework, including building upon Chemtrade’s foundation with a combination of organic and acquisition growth; expectations regarding delivering strong per unit returns; and the expected benefits of converting the Fund to a corporation, including better alignment with Chemtrade’s long-term growth objectives, additional flexibility and easier access to larger pools of capital particularly outside of Canada, continued investment in operations and the pursuit of organic and external growth opportunities, broadening the investor base over time, strengthening the balance sheet and optimising the capital structure; and the belief that while the conversion will reduce the historical flow-through advantages of the income trust structure, taxable Canadian shareholders will directly realize much of this benefit in the form of eligible dividends.

Forward-looking statements in this news release describe the expectations of the Fund and its subsidiaries as of the date hereof. These statements are based on assumptions and involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements for a variety of reasons, including without limitation: the anticipated benefits of the Plan may not be realized, may not meet the expectations of the Fund or may not occur at all, and may have unanticipated costs for the Fund; failure to obtain required Unitholder, stock exchange and court approvals in a timely manner or on conditions acceptable to the Fund or the failure of the Plan to be completed for any other reasons (or to be completed in a timely manner); incurrence of costs associated with the Plan beyond those estimated; unanticipated adverse tax consequences to the Fund, PubCo and Unitholders in connection with the Plan, including the taxable nature of the exchange of Units for PubCo Common Shares; and the impact of the announcement and pendency of the Plan on the Fund’s business, results of operations and financial conditions. For further information concerning other risks and uncertainties, refer to the “RISK FACTORS” section of the Fund’s latest Annual Information Form and the “RISKS AND UNCERTAINTIES” section of the Fund’s most recent Management’s Discussion & Analysis.

Although the Fund believes the expectations reflected in these forward-looking statements and the assumptions upon which they are based are reasonable, no assurance can be given that actual results will be consistent with such forward-looking statements, and they should not be unduly relied upon. With respect to the forward-looking statements contained in this news release, the Fund has made assumptions regarding, among other things: the timing and completion of the Plan; there being no significant disruptions affecting the operations of the Fund and its subsidiaries; the timely receipt of the required court, TSX and Unitholder approvals; and global economic performance.

Except as required by law, the Fund does not undertake to update or revise any forward-looking statements, whether as a result of new information, future events or for any other reason. The forward-looking statements contained herein are expressly qualified in their entirety by this cautionary statement.

Further information can be found in the disclosure documents filed by the Fund with the securities regulatory authorities, available on SEDAR+ at www.sedarplus.ca.

For further information:

Endri Leno
Vice President, Investor Relations
Email: investor-relations@chemtradelogistics.com