Looking to conserve cash ahead of a planned conversion from an income trust to a corporation, Vancouver-based greenhouse produce company Village Farms has stopped its monthly distributions to unitholders.
The distributions will be suspended “for the foreseeable future,” Village Farms said in a release Friday.
“The fund believes that it is prudent to conserve cash in light of the current challenging economic times as well as to provide capital for growth initiatives and to create a reserve for the cost of converting the fund to a corporate structure by the end of 2009.”
The company bills itself as one of the largest producers, marketers and distributors of greenhouse-grown tomatoes, bell peppers and cucumbers in North America, from operations in B.C. and Texas.
Other ag-related income trusts, such as Winnipeg grain handling equipment firm Ag Growth and Vancouver processing company Premium Brands, have already announced or carried out plans to convert to corporations. The moves follow the federal government’s decision to tax income trusts.