Cinram units fall to year low after payouts slashed

TORONTO, Nov 6 (Reuters) - Units of Cinram International Income Fund (CRW_u.TO) plunged to a year low on Tuesday as investors dumped their holdings in wake of the company's announcement that it would cut distributions before suspending them altogether.

Cinram, the world's biggest provider of pre-recorded multimedia such as CDs and DVDs, fell C$5.86, or 46 percent, to C$6.94 on the Toronto Stock Exchange.

The company said late Monday the November distribution had been cut to 16.25 Canadian cents per unit, down from 27.08 Canadian cents, and the same reduction was planned for December. It intends to suspend all investor payouts after then, it said.

"While our expectations may have changed, our core business is solid," Chief Executive Dave Rubenstein told analysts during Cinram's third-quarter results conference call. "I want to stress the fact that DVD volumes are not falling off a cliff."

Cinram didn't take questions from analysts during the call.

The decision on distributions comes amid weaker prices and slumping demand for its products, the company said. As well, a surge in the Canadian dollar against the U.S. currency has exacerbated its problems.

Cinram first warned investors in late October that it was "likely" going to cut unitholder distributions based on its preliminary financials.

($1=$0.92 Canadian)

(Reporting by Wojtek Dabrowski; Editing by Bernadette Baum)

((E-mail: wojtek.dabrowski@reuters.com; Reuters Messaging: wojtek.dabrowski.reuters.com@reuters.net. Telephone: +1-416-941-8009)) Keywords: CINRAM UNITS/

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