June 22, 2010 / 12:51 PM / in 8 years

UPDATE 1-Gaz Metro L.P. to convert to dividend-paying public co

* To exchange one unit for each new company share

* Quarterly distribution to stay at C$0.31/unit till Sept.

June 22 (Reuters) - Canada’s Gaz Metro Limited Partnership GZM_u.TO said Tuesday it would convert the public ownership structure of the company into a new dividend-paying public corporation.

The natural gas distributor said it will exchange all publicly held units of Gaz Metro for shares of the new company on a one-for-one basis and expects to pay an annual dividend of C$1 for each share of the new company, starting 2011.

Gaz Metro distributions otherwise payable to the new company will be increased by an aggregate amount of C$20 million over a three-year period, it said in a statement.

Gaz Metro said following completion of the arrangement, expected by Sept. 30, the new company will also have an option to buy 49 percent of Gaz Metro’s interest in the Seigneurie de Beaupre wind power project.

Gaz Metro will also maintain its quarterly distribution of 31 Canadian cents per unit until Sept. 30.

Units of Gaz Metro closed at C$15.77 Monday on the Toronto Stock Exchange. (Reporting by Ashutosh Joshi in Bangalore; Editing by Vyas Mohan)

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