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GENTRA INC. STATEMENT ISSUES STATEMENT REGARDING MANAGEMENT SHARE PURCHASE PLAN

 TORONTO, Aug. 9 /PRNewswire/ -- Gentra Inc. today issued a statement refuting certain statements made by the Globe and Mail in an article on Saturday, August 7, 1993, about the proposed amendments to Gentra's management share purchase plan. That article incorrectly stated that "taxpayers will help foot the bill for the former Royal Trustco Ltd's bailout of managers who borrowed millions to buy company shares" and that Gentra had received a "special" ruling from Revenue Canada which "allows the individuals to avoid a second tax hit."
 Under the proposed amendments to Gentra's share purchase plan, the management share purchase loans will be extended for 10 years with provision for up to six subsequent extensions, each for an additional 10 year period. Arrangements will be made with a Canadian life insurer for each participant to acquire whole life insurance coverage in an amount equal to the principal amount of that participant loan. The policies will be held as additional security for the loans which will be payable at the earlier of maturity and death.
 Gentra will pay the cost of acquiring the insurance coverage by paying the first year's premium payable in respect of the insurance policies and buying, on behalf of each participant, an annuity contract that will provide for a payment schedule that will fund, on an after-tax basis, the annual premiums that are payable in respect of the participant's insurance policy for subsequent years.
 Gentra would like to confirm the income tax treatment of these arrangements. The full amount of the payments to be made in respect of each participant (both the first year premium payment and the purchase price of the annuity contract) will be included in the participant's income for tax purposes and income tax will be payable by the participant accordingly. In addition, each participant will be required to include in income for tax purposes the interest element of each payment under the annuity contract. Gentra will make a second special remuneration payment to each participant sufficient to compensate the participant for the income tax liability resulting from the inclusion in taxable income of the above amounts and the second special remuneration payment which itself will be taxable.
 The above income tax treatment was confirmed in an advance income tax ruling from Revenue Canada, Taxation.
 Taxpayers are therefore not footing any of the bill for the proposed amendments and the plan participants are not avoiding a "second tax hit." Of the approximately $20 million cost of the amendments, approximately half is the cost of the insurance arrangements and the other half will be remitted to Revenue Canada to cover the tax payable with respect to those arrangements.
 -0- 8/9/93
 /CONTACT: Sheila Robb of Gentra Inc., 416-981-6655/


CO: Gentra Inc. ST: Ontario IN: FIN SU:

TM -- NY094 -- 0961 08/09/93 19:58 EDT
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Publication:PR Newswire
Date:Aug 9, 1993
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