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ACB Allocation Information — Historical
Adjusted Cost Base (‘ACB’) Allocation information for both former Progress Energy Ltd. Shareholders and former Cequel Energy Inc. shareholders (pre-July/2004)
The following information is provided as an example of how a former Progress Energy Ltd (Progress) or a Cequel Energy Inc. (Cequel) shareholder may calculate their adjusted cost base. This should in no way be construed as tax advise. Former Progress and Cequel shareholders are strongly encourage to speak with their tax advisor.
Former Progress Energy (Progress) Shareholders
As outlined in the ‘Plan of Arrangement’, the capital of Progress was reorganized such that each Progress share (excluding shares held by non-residents) was exchanged for:
-
1 Progress New Share (subsequently exchanged for either Trust Unit of Exchangeable Shares)
- 1 Class A Preferred Share ( The New Share and the Class A Preferred Share was subsequently exchanged for either trust unit of exchangeable shares)
- 1 Class B Preferred Share (subsequently exchanged for 0.2 of a ProEx Shares)
- 1 Class C Preferred Share (subsequently exchanged for 0.2 of a Cyries Shares)
Section 86(1) of the federal Income Tax Act requires the ACB of the former Progress Share to be allocated pro-rata (based on relative fair market value) to the new shares received.
The following is one method of allocating the ACB:
Fair Market Value of the former Progress Share (closing market value) $15.05/share
Deduct:
| Net Asset Value of the ProEx Share | $1.39/share x .2 | 0.278 (1.8% rounded) |
| Net Asset Value of the Cyries Share | $1.64/share x .2 | 0.326 (2.2% rounded) |
| Residual Value attributable to New Share & Class A Pref. Shares | $14.446/share | (96.0% rounded) |
Using this method, 96% of the ACB from the former Progress Share would be allocated to either the Exchangeable Shares or the Trust Unit, 1.8% to the ProEx Share and 2.2% to the Cyries Share.
Former Cequel Energy Inc. (Cequel) shareholders
Similarly, the ‘Plan of Arrangement’ outlined that the capital of Cequel was reorganized such that each Cequel share (excluding shares held by non-residents) was exchanged for:
- 1 Cequel New Share (subsequently exchanged for either Trust Unit of Exchangeable Shares)
- 1 Class X Preferred Share ( The New Share and the Class X Preferred Share was subsequently exchanged for either trust unit of exchangeable shares)
- 1 Class Y Preferred Share (subsequently exchanged for 0.139 of a ProEx Shares)
- 1 Class Z Preferred Share (subsequently exchanged for 0.139 of a Cyries Shares)
Using the same method proposed above, the following is allocation of ACB results:
Fair Market Value of the former Cequel Share (closing market value) $10.45/share
Deduct:
| Net Asset Value of the ProEx Share | $1.39/share x 0.139 | 0.19321 (1.8% rounded) |
| Net Asset Value of the Cyries Share | $1.64/share x 0.139 | 0.22657 (2.2% rounded) |
|
Residual Value attributable to New Share & Class A Pref. Shares
|
$10.03022/share | (96.0% rounded) |
Exchangeable Share Issues
Important information for former Cequel and Progress shareholders who elected exchangeable shares.
Cequel
- Important Time Sensitive Tax Information PDF
- Instructions to Former Cequel Energy Inc. (CEQUEL) – Shareholders Re: Joint Tax Election PDF
- T2057 Election Form (partially completed) PDF
- T2058 Election Form – partnerships PDF