An anonymous director reports

CITADEL INCOME FUND ANNOUNCES RESOLUTION WITH SABA CAPITAL AND UPDATE TO THE SPECIAL REDEMPTION AND FUND

Citadel Income Fund, along with the trustee and manager of the fund, Artemis Investment Management Ltd., after lengthy discussions and negotiations, has entered into a resolution agreement with Saba Capital Management LP pursuant to which Saba has agreed to withdraw its previously announced requisition for a special meeting of unitholders to, among other things, replace Artemis as the fund's manager and liquidate the fund.

Pursuant to the resolution agreement, the fund has agreed to offer unitholders the opportunity to redeem not less than 7,186,900 units of the fund, representing 70 per cent of the outstanding units, and Saba has agreed to support and vote for Citadel's proposal to reposition the fund to invest exclusively in a selective portfolio of resale residential real estate properties in Canada through co-ownership agreements with retail homebuyers.

Special redemption offer

The redemption offer is subject to the approval of unitholders at a duly called special meeting of unitholders, which the fund will hold no later than Nov. 7, 2023, and applicable regulatory approvals and consents that may be required to complete the redemption offer.

Under the redemption offer, units will be redeemed for an amount equal to the net asset value per unit less redemption costs equal to 4.5 per cent of net asset value per unit redeemed. If requests for redemptions exceed 7,186,900 units, then the units will be redeemed on a pro rata basis. Subject to obtaining the requisite unitholder approval, the fund plans to schedule the redemption date for the redemption offer by no later than Dec. 7, 2023.

Fund conversion transaction

The fund conversion will be subject to the approval of unitholders at a duly called special meeting of unitholders as well as applicable regulatory approvals and consents. The fund conversion will not be considered at the special meeting but is expected to be the subject of a unitholder meeting in 2024.

As part of the previously announced strategic review process undertaken by Artemis to identify value-enhancing strategic alternatives for the fund, the proposed fund conversion transaction was identified as an opportunity to provide unitholders with the ability to participate in historic rates of appreciation of residential real estate. In connection with the fund conversion, unitholders will be asked to approve certain amendments to the fund's declaration of trust, including amending the fund's investment strategy, objectives and restrictions for the limited purpose of permitting the fund to, and only to the extent required to permit the fund to, exclusively invest in a portfolio of resale residential real estate properties in Canada through co-ownership agreements with homebuyers and reducing the management expense ratio (which includes the management fee) to a cap of 2.5 per cent and to remove the annual and monthly redemption rights of unitholders. After giving effect to the fund conversion, the fund will no longer be an investment fund, and will operate as a non-investment fund reporting issuer.

Notice of the redemption offer and the timing of the special meeting will be provided to unitholders next week in accordance with the fund's declaration of trust.

For further information, please contact your financial adviser or Kingsdale Advisors at 1-800-395-7251 (toll-free in North America) or 416-623-2513 (collect outside North America) or by e-mail at contactus@kingsdaleadvisors.com, or Artemis Investment Management's investor relations line at 416-934-7455 or visit its website.

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