BARRIE, ONTARIO--(Marketwired - Jul 10, 2014) - Partners Real Estate Investment Trust (the "REIT" or "Partners") (TSX:PAR.UN) provides the following corporate update:
Holyrood Transaction
As announced by press release on June 6, 2014, the REIT has entered into a Rescission Agreement with Holyrood Holdings Limited ("Holyrood"), the effect of which is intended to unwind the April 2014 property acquisition with Holyrood (the "Acquisition") and put the parties back into the position they were in prior to the Acquisition, to the extent possible.
The unwind transaction is subject to a number of conditions and this press release is intended to provide unitholders of the REIT with an update as to the status of the material conditions associated with the unwind transaction.
Each of the three properties acquired from Holyrood has a mortgage attached as security for loans in the approximate principal amount of $55,000,000. With the completion of the unwind, those loans will again be obligations of Holyrood and not the REIT. Both financial institutions that have provided the loans and that hold the mortgages have advised the REIT, subject to conditions, that they will not oppose the completion of the unwind. Although there can be no certainty until the unwind closes, the REIT believes these conditions will be achieved.
Following its sale of the three properties to the REIT in April, Holyrood pledged the securities it received from the REIT and its subsidiary as collateral for a loan. Holyrood has advised the REIT that arrangements have been made with its lender so that the pledged securities will be released and cancelled as part of the unwind transaction. Again, these alternate arrangements are subject to conditions. The REIT is not a party to these arrangements and is not in a position to comment on the likelihood of these conditions being satisfied, but the REIT has been advised by Holyrood that it expects all of the conditions to be satisfied and the REIT securities released from the pledge.
An application will be made to the Ontario Superior Court, with notice to the Canada Revenue Agency, for an order rescinding the Acquisition. While the issuance of the rescission order is at the discretion of the Court, the REIT and Holyrood believe they will have the proper grounds to secure the rescission order once the remaining conditions referred to above related to the mortgages on the three properties and the pledged REIT securities are satisfied.
The REIT believes it will be in a position to ask the Court to approve the rescission of the Acquisition by the end of July, well ahead of the August 31 deadline in the Rescission Agreement dated June 6, 2014. There can be no certainty that the rescission will occur until the various pre-conditions are satisfied and the Court rules on the matter.
Employee Services Agreement Terminated and Partners Head Office Moved
Partners and McCowan & Associates have mutually agreed to the termination of the Employee Services Agreement that was entered into on February 14, 2014 and amended effective May 5, 2014. Partners' thanks the employees of McCowan & Associates for their contribution in assisting the management of the real estate assets. Earlier, Partners gave notice under their lease to Holyrood of their intention to relocate its head office and as of July 7th, Partners has completely moved its head offices to its new location at 249 Saunders Road, Unit #3 in Barrie, Ontario.
Strategic Review
As noted in previous press releases, National Bank Financial has been retained as independent financial advisor to the Board of Trustees to assist in the completion of a review of strategic alternatives to maximise unitholder value. National Bank Financial is in active discussions with a number of parties interested in potentially executing a transaction, which would maximise value for the unitholders.
To date, the Board of Trustees has received several non-binding written proposals registering interest in a transaction involving the REIT. These proposals range from a significant investment in the equity of the REIT to the purchase of all or a substantial portion of the REIT. The Trustees want to emphasise that none of the proposals received to date are binding, and that each of them would be subject to due diligence and various other pre-conditions to closing.
Proxy Voting Deadline for Annual and Special Meeting: Friday, July 11, 2014 at 1 p.m. (Toronto time)
The July 11, 2014, deadline to vote your YELLOW form of proxy in advance of the REIT's Annual and Special Meeting is fast approaching. It is important that unitholders exercise their right to vote. In order to ensure that their vote is counted at the July 15, 2014 Annual and Special Meeting, unitholders should vote immediately. The Board of Trustees recommends that unitholders vote FOR all items on the YELLOW form of proxy. If you have any questions or require assistance with voting, contact Laurel Hill Advisory Group at 1-877-452-7184 (416-304-0211 collect) or by email at assistance@laurelhill.com.
About Partners REIT
Partners REIT is a growth-oriented real estate investment trust, which currently owns (directly or indirectly) 42 retail properties, well located in British Columbia, Alberta, Manitoba, Ontario, and Quebec, aggregating approximately 3.2 million square feet of leasable space. Partners REIT focuses on expanding and managing a portfolio of retail and mixed-use community and neighbourhood shopping centres located in both primary and secondary markets across Canada.
Disclaimer
Certain statements included in this press release constitute forward-looking statements. The forward-looking statements are not historical facts but reflect Partners REIT's current expectations regarding future results or events. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations. Although Partners REIT believes that the assumptions inherent in the forward-looking statements are reasonable, forward-looking statements are not guarantees of future performance and, accordingly, readers are cautioned not to place undue reliance on such statements due to the inherent uncertainty therein.
