11:00 AM EDT, 10/03/2025 (MT Newswires) -- Richards Packaging Income Fund (RPI-UN.TO) overnight Thursday announced a proposed conversion from an unincorporated, open-ended, limited purpose trust to a corporation incorporated under the Business Corporations Act (Ontario)(OBCA) named "Richards Group Inc." pursuant to a statutory plan of arrangement and an arrangement agreement dated Oct. 2.

Under the statutory plan of arrangement under the OBCA, unitholders will receive one common share in the capital of Richards Group for each unit held. Following the completion of the plan, Richards Packaging Income Fund is intended to be terminated and Richards Group will effectively own and control all of Richards Packaging's business and assets in place of the Fund.

It is expected that before the record date for the special meeting of unitholders to be held in connection with the plan, exchangeable shareholders of the Fund's subsidiary, Richards Packaging Holdings (RPH), will transfer their exchangeable shares to the Fund in exchange for the issuance of units. Following that, such exchangeable shares held by the fund will be converted to common shares of RPH and each of the issued and outstanding special voting units previously issued to the exchangeable shareholders will be cancelled.

The common shares of Richards Group are expected to start trading on the Toronto Stock Exchange under a trading symbol to be determined by the Fund.

Richards Group's board of directors will be comprised of the current trustees of the Fund and management will be comprised of the current management of the Fund.

The company said that, in connection with the plan, each outstanding deferred share unit issued by the Fund to certain trustees, to the extent it has not been settled as of the effective date, will be exchanged for one deferred share unit issued by Richards Group.

Such replacement DSUs are expected to be governed by the terms and conditions of a security-based compensation plan to be adopted by Richards Group (New PubCo), subject to approval of the New PubCo Equity Incentive Plan by the TSX and unitholders.

The plan will be subject to the approval of the unitholders to be sought at the special meeting and 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. The plan is also subject to the satisfaction of certain customary conditions.

Subject to the receipt of applicable approvals, the plan is expected to be effective before Dec. 31, 2025.

National Bank of Canada Friday maintained an outperform rating and C$43 price target on the shares of Richards Packaging Income Fund.

"While this comes as no surprise to investors following the story as management had indicated such plans, the announcement officiates this step in RPI's transformation and provides a timeline," said the bank. "The plan is to be effective prior to December 31, 2025, which is in line with our timing expectation."

The bank also said that the move will enable "more flexibility" related to capital deployment, including M&A and NCIB.

The company's shares were last seen down $0.08 to $33.67 on the Toronto Stock Exchange.

Price: 33.67, Change: -0.08, Percent Change: -0.24