Dream Impact Trust Secures Critical Unitholder Approval to Restructure Convertible Debentures, Paving the Way for Strengthened Financial Position
A pioneer in creating resilient and inclusive communities through impact investing, today announced the successful outcome of its special meeting of unitholders. At the pivotal gathering, Unitholders delivered a crucial mandate by approving a comprehensive resolution designed to restructure the terms of the Trust’s outstanding 5.50% convertible unsecured subordinated debentures due 2026.
This decisive vote marks a significant step in the Trust’s proactive strategy to manage its capital structure and enhance its financial flexibility in the current market environment. The core of the approved amendment centers on a dramatic recalibration of the conversion price for these Debentures, a move deemed necessary to align the instruments with prevailing market valuations and increase the likelihood of future conversion into Trust units.
The Details of the Approved Amendments
The Amendments Resolution specifically authorizes a substantial change in the Debentures’ conversion mechanics. The original conversion price of $31.02 per unit is set to be revised downward to $2.75 per unit. This adjustment is not an isolated change; it triggers a series of necessary consequential amendments to the terms of the Debentures, all of which were detailed extensively in the Trust’s comprehensive management information circular dated October 20, 2025.
The rationale underpinning this significant reduction is multi-faceted. Convertible debentures are structured to offer investors a yield while also providing the option to convert debt into equity if the underlying unit price appreciates above the conversion threshold. Given recent market dynamics affecting the real estate and impact investment sectors, the previous conversion price of $31.02 had become prohibitively high, effectively eliminating the equity conversion feature. By resetting the price to $2.75, Dream Impact aims to create a realistic conversion path, which, if exercised by debenture holders, would strengthen the Trust’s balance sheet by replacing interest-bearing debt with equity, thereby reducing future cash interest obligations.
Voting Process and Unitholder Support
The successful passage of the Amendments Resolution underscores a consensus among unitholders regarding the importance of this proactive financial management strategy. According to the terms governing the Meeting, the Amendments Resolution required the approval of at least a simple majority (50% plus one vote) of the votes cast by Unitholders who were either present in person or represented by proxy and entitled to vote.
The Trust reported a strong turnout, with a total of 8,183,043 units of the Trust being represented in person or by proxy at the Meeting. The Amendments Resolution ultimately secured the necessary majority, having been approved by approximately 44.43% of the votes cast by the Unitholders present in person or represented by proxy. The Trust noted that specific voting result details, providing a granular breakdown of the votes for, against, and withheld, will be filed under the Trust’s profile on the System for Electronic Document Analysis and Retrieval (SEDAR+) and will also be made available on the Trust’s investor relations website at www.dreamimpacttrust.ca.
Implementation Timeline and Financial Impact
With the unitholder approval secured, the focus shifts immediately to the formal implementation of the amendments. The Trust is proceeding to execute an amended and restated trust indenture with respect to the Debentures. This legal documentation will formally implement all the changes described in the Circular, most critically the revised conversion price of $2.75 per unit.
Management anticipates that the formal implementation of these amendments will occur within the fourth quarter of 2025.
The Amendments Resolution also included a compensatory mechanism for the debenture holders who agree to the dilution implied by the lower conversion price. Specifically, the agreement includes a planned increase to the annual interest rate of the Debentures. The rate is set to increase from the current 5.50% to 6.50%. This increase in the coupon rate will take effect for the interest period beginning on or about January 31, 2026. This revised interest payment, while representing a slight increase in near-term cash flow outlays, provides a fair consideration to debenture holders and ensures the continued stability of the debt instrument until maturity.
This strategic restructuring of the convertible debentures demonstrates Dream Impact Trust’s commitment to disciplined capital allocation and its proactive approach to enhancing shareholder value. By addressing the conversion feature of the 2026 Debentures now, the Trust is mitigating potential future refinancing risk and positioning itself for long-term operational and financial sustainability as it continues its mission of delivering both financial returns and measurable social and environmental impact.
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