RE: Question?Hello Wesmile,
This "Distribution" is what I call an accounting fiddle.
The intent is to allow the fund to still qualify as an "Income Trust" since Canadian law requires a fund to distribute at least the amount of the otherwise taxable income of the fund so that the taxable income is taxed in the hands of the unitholders.
For whatever reason (pick the reason you believe is the one - be as cynical as you like!) the "independent" trustees were unable to renew the debt in the time allowed before its maturity (December 20th) without a guarantee of the debt from Xstrata.
That guarantee gave a proper business reason to Xstrata to insist that a clause be put in forbidding distributions be forbidden (since no distributions means a lowering of the debt amount and hence its liability).
I do not believe that there are no banks willing to do a deal without Xstrata's guarantee; but until one, or a syndicate of banks, takes over the debt (possibly at higher interest rates; but I think there is enough profit to cover higher interest and still pay distributions) the distributions will not start again. I believe that this will probably occur by Summer; but that is just my opinion.
There of course is no hope of voting the whole management team out as both we and Xstrata need each other and the relationship will be painful but it is necessary.
You can also be as cynical as you like in speculating as to why the "Dissidents" backed off in replacing the "Independent" trustees. Barry Critchley said in one of his articles "Xstrata found it "wholly inappropriate" that the trustees would agree to pay $400,000 to the dissident shareholders because it is "effectively favouring one unitholder at the expense of others."
I think that $400,000 was something they would pick up; but was very immaterial to the "Dissidents" and I also agree with Xstrata that it was inappropriate. My mind is puzzling around about why the "Dissidents" backed off.