PROPOSED CORPORATE REORGANIZATION August 2010

Copyright © 2010, Gaz Métro Limited Partnership. All rights reserved. 

CAUTION CAUTION   

Implementation of the Implementation of the proposed structure is proposed structure is subject to the realization subject to the realization of pre-conditions, some of of pre-conditions, some of which are beyond the which are beyond the control of Gaz Métro. control of Gaz Métro. Gaz Métro cannot provide Gaz Métro cannot provide any assurance these any assurance these conditions will be realized conditions will be realized at the appropriate time.at the appropriate time.

CONTEXTCONTEXT  

On October 31, 2006, Canada’s Finance Minister, Jim On October 31, 2006, Canada’s Finance Minister, Jim Flaherty, announced the introduction of a Tax Fairness Plan Flaherty, announced the introduction of a Tax Fairness Plan starting with the 2011 fiscal year (October 1, 2010 for starting with the 2011 fiscal year (October 1, 2010 for Gaz Métro). Gaz Métro).

  

The basic objective of the Plan is to standardize the tax The basic objective of the Plan is to standardize the tax treatment of certain Canadian entities whether they be treatment of certain Canadian entities whether they be corporations, income trusts, limited partnerships or other corporations, income trusts, limited partnerships or other types of organizations.types of organizations.

CONTEXTCONTEXT  

Under the present tax rules, income trusts and limited Under the present tax rules, income trusts and limited partnerships, like Gaz Métro, are not taxable. partnerships, like Gaz Métro, are not taxable.

In this context, Gaz Métro distributes its net income to its In this context, Gaz Métro distributes its net income to its Partners who pay the income taxes thereon.Partners who pay the income taxes thereon.

Effective October 1, 2010, if Gaz Métro continues to be a Effective October 1, 2010, if Gaz Métro continues to be a public partnership, it will be taxable, which means that its public partnership, it will be taxable, which means that its after-tax net income, and therefore the distributions paid to after-tax net income, and therefore the distributions paid to Partners, will be lower than under the present rules.Partners, will be lower than under the present rules.

CU

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ENT

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Gaz Métro would become fully taxable after

September 30, 2010 if it remained a public entity.

Gaz Métro Inc. and minority holders would be equally

impacted by reduction in Gaz Métro after-tax adjusted net

income available for distribution

CU

RR

EN

T S

TR

UC

TU

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CU

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EN

T S

TR

UC

TU

RE

50,38% 17,56%32,06%

100%

PublicLimited Partners

PublicLimited Partners

29,0%

(1) Trencap : Caisse de dépôt et placement du Québec (51,11%), Fonds de solidarité FTQ (16,66%), SNC-Lavalin Inc. (11,11%), BC Investment Management Corporation (11,11%), Régime des rentes du Mouvement Desjardins (8,33%), Régime de retraite de l’Université du Québec (1,67%)

100%

Gaz MétroÉole inc.

71,0%

Gaz Métro inc.General Partner

Gaz Métro inc.General Partner

Noverco inc.Noverco inc.

Boralex inc.

Trencaps.e.c. (1)

Trencaps.e.c. (1)

Enbridge

Inc.Enbridge

Inc. GDF SUEZGDF SUEZ

50 %Seigneurie

Wind Power Project

50 %

Other Investments

Other Investments

Gaz Métro Limited

Partnership

Gaz Métro Limited

Partnership

PROPOSED

STRUCTURE

50%Seigneurie

Wind Power Project

50%

29%

Creation and incorporation of a new public entity (Valener) and exchange of each unit of Gaz Métro held by the public

for one share of Valener.

Gaz Métro becomes a private Limited Partnership.

PR

OP

OS

ED

ST

RU

CT

UR

EP

RO

PO

SE

D S

TR

UC

TU

RE

50,38% 17,56%32,06%

100%

(1) Trencap : Caisse de dépôt et placement du Québec (51,11%), Fonds de solidarité FTQ (16,66%), SNC-Lavalin Inc. (11,11%), BC Investment Management Corporation (11,11%), Régime des rentes du Mouvement Desjardins (8,33%), Régime de retraite de l’Université du Québec (1,67%)

100%

51%

49%

Noverco inc.Noverco inc. Option for the transfer at cost of 49% of Gaz Métro interest in

Seigneurie Wind Power Project, within 90 days of closing of the

proposed reorganization, granted to Valener

71%

Gaz Métro inc.General Partner

Gaz Métro inc.General Partner

Boralex inc.

Trencaps.e.c. (1)

Trencaps.e.c. (1)

Enbridge

Inc.Enbridge

Inc. GDF SUEZ GDF SUEZ

PublicPublic

29%Valener Inc.Limited Partner

Valener Inc.Limited Partner

Gaz Métro Éole inc. 

Other Investments

Other Investments

Gaz Métro Limited

Partnership

Gaz Métro Limited

Partnership

NEXT STEPSNEXT STEPS  

Implementation of the proposed structure is subject to Implementation of the proposed structure is subject to a number of conditions, including:a number of conditions, including:

1.1. Getting the required consents; Getting the required consents;

2.2. A favourable vote of the Partners (unitholders) at a meeting A favourable vote of the Partners (unitholders) at a meeting in September 2010; in September 2010;

3.3. Approval of the Superior Court of Québec. Approval of the Superior Court of Québec.

Expected closing by September 30, 2010 Expected closing by September 30, 2010

For all the details, see also the complete presentation "Gaz Métro’s Response to Tax Fairness Plan (SIFT rules)" available on our website

www.gazmetro.com/investors

Contact us Investors 514 598-3039www.gazmetro.com/investors

Media514 598-3449www.gazmetro.com/pressroom