WINNIPEG, MB, Oct. 5, 2023 /CNW/ – Lanesborough Real Estate Investment Trust (“LREIT“) (TSXV: LRT.UN) announces today that it has entered into an asset purchase agreement (the “Agreement“) in connection with the sale of Parsons Landing, 350 Parsons Creek Drive, Fort McMurray, Albert (the “Property“) to 7254751 Manitoba Ltd. (“725“) for aggregate consideration of $22,000,000, payable as follows: (i) a $20,000 cash deposit payable to LREIT within 3 business days of the effective date of the Agreement; (ii) $35,276,388 through the assumption of the mortgage on the Property by 725; (iii) an increase in the line of credit from 2668921 Manitoba Ltd., a sister company of 725, to LREIT by $13,296,388; and (iv) the balance of the purchase price payable in cash on closing (collectively, the “Transaction“).
725 is a company controlled by Arni Thorsteinson, an insider of LREIT. Accordingly, the Transaction is a “Related Party Transaction” under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101“).
As LREIT is not listed on the Toronto Stock Exchange, in accordance with Section 5.5(b) of MI 61-101, the Transaction is exempt from the formal valuation requirements of MI 61-101. As LREIT is experiencing financial hardship, as defined in Section 5.5(g) of MI 61-101, LREIT is also exempt from the requirement to obtain approval of a majority of the minority unitholders of LREIT for the Transaction.
It is anticipated that the Transaction will close on or about May 1, 2024.
Pursuant to the terms of the Agreement and the policies of the TSX Venture Exchange (the “Exchange“), the closing of the Transaction is subject to the condition that 725 arrange new and restructured mortgage financing for its acquisition of the Property on terms satisfactory to 725 and the final approval of the Exchange.
LREIT is a real estate investment trust, which is listed on the TSX Venture Exchange under the symbol LRT.UN (Trust Units). For further information on LREIT, please visit our website at www.lreit.com.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as the term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Certain statements contained in this press release are “forward-looking statements” that reflect the expectations of management regarding the Transaction. Readers are cautioned not to place undue reliance on forward-looking information. All statements other than statements of historical fact contained herein are forward-looking statements. Forward looking statements are often, but not always, identified by the use of words such as “seek”, “anticipate”, “plan”, “continue”, “estimate”, “expect”, “may”, “will”, “project”, “predict”, “potential”, “targeting”, “intend”, “could”, “might”, “should”, “believe” and similar expressions. Such forward-looking statements reflect management’s current beliefs and are based on information currently available to management. Forward looking statements involve significant risks and uncertainties. A number of factors that could cause actual results to differ materially from the results discussed in forward-looking statements are discussed in LREIT’s management discussion and analysis for the six-month period ended June 30, 2023 available on SEDAR at www.sedar.com. Although the forward-looking statements contained herein are based upon what management believes to be reasonable assumptions, LREIT cannot assure investors that actual results will be consistent with these forward-looking statements.
The forward-looking statements contained herein are expressly qualified in their entirety by this cautionary statement. Forward-looking statements are made as of the date hereof, or such other date specified in such statements, and neither LREIT nor any other person assumes any obligation to update or revise such forward-looking statements to reflect new information, events or circumstances, except as expressly required by applicable securities law.
SOURCE Lanesborough Real Estate Investment Trust