TORONTO, May 1, 2013 /CNW/ - Edgefront Realty Corp. ("Edgefront") (TSXV: ED) announces today that it has entered into an agreement with
Ajax Estates Holdings Ltd. (an Ontario corporation) dated April 29,
2013 to purchase a 396,000 square foot portfolio of industrial
properties in Ajax, Ontario (the "Ajax Portfolio") for a purchase price of approximately $29,500,000, to be satisfied by
way of cash and the issuance to Ajax Estates Holdings Ltd. of
$5,000,000 of Edgefront shares at a deemed price of $0.15 per share (or
approximately 33,333,333 Edgefront shares). The Ajax Portfolio consists
of multiple multi-tenant industrial properties located in an industrial
park that is 100% occupied with an average remaining lease term of 7
The purchase price for the Ajax Portfolio will be satisfied through a
combination of cash generated from new mortgages, the issuance of up to
300,000,000 common shares of Edgefront by way of private placement at a
price of $0.15 per share for aggregate gross proceeds of up to $45
million and the share issuance to Ajax Estates Holdings Ltd. as
described above. The acquisition of the Ajax Portfolio and the private
placement will form part of a series of transactions relating to the
conversion of Edgefront into a real estate investment trust having an
external asset management structure. The acquisition of the Ajax
Portfolio, private placement and conversion into a real estate
investment trust will be subject to receipt of all necessary approvals,
including those of Edgefront shareholders, the Ontario Superior Court
of Justice (Commercial List) and the Exchange, and such transactions
are expected to close on or about the end of June.
Edgefront retained CBRE Limited as its independent appraiser to
determine the market value of the Ajax Portfolio. In its report, the
independent appraiser concluded that the market value of the Ajax
Portfolio as at April 25, 2013 was $29,900,000 based on various factors
including annual total gross revenue of $3,071,513 (unaudited) for the
The acquisition of the Ajax Portfolio is an Arm's Length Transaction (as
that term is defined in TSXV Policy 1.1) and has not yet received TSXV
approval. The acquisition is subject to certain closing conditions,
including completion of satisfactory due diligence, receipt of any
necessary regulatory approval and successful financing. The conversion
of Edgefront into a real estate investment trust will be subject to
Multilateral Instrument 61-101 and Exchange Policy 5.9, and will
require the approval by the affirmative vote of a majority of votes
cast by minority shareholders voting at a special meeting of
shareholders to be held on June 14, 2013. Edgefront does not expect any
new control person to be created as a result of the private placement.
"Management is enhancing the corporation's portfolio through property
acquisitions in Ontario, thereby expanding and diversifying its asset
base", commented Kelly Hanczyk, Edgefront's Chief Executive Officer.
"These additional properties strengthen our position as Edgefront moves
forward with its plan to convert the corporation into a diversified
real estate investment trust."
Edgefront is a growth oriented, diversified real estate company focused
on increasing shareholder value through the acquisition, ownership and
management of commercial real estate assets initially located in
secondary markets. It is the intention of Edgefront to expand its
business of purchasing, owning and operating real estate assets and to
raise funds in the marketplace in order to convert Edgefront into a
real estate investment trust having an external asset management
structure, subject to receipt of all necessary approvals, including
that of the TSXV.
Completion of the acquisition of the Ajax Portfolio (the "Transaction")
remains subject to TSXV approval. There can be no assurance that the
Transaction will be completed as proposed or at all.
The TSXV has in no way passed upon the merits of the Transaction and has
neither approved nor disapproved the contents of this press release.
Neither the TSXV nor its Regulation Services Provider (as that term is
defined in the policies of the TSXV) accepts responsibility for the
adequacy or accuracy of this release.
This press release contains forward-looking information within the
meaning of Canadian securities laws. Such information includes,
without limitation, information regarding the completion of the
Transaction. Although Edgefront believes that such information is
reasonable, it can give no assurance that such expectations will prove
to be correct. In particular, this news release contains
forward-looking information relating to the expected completion of the
Transaction and the business strategies of Edgefront
Forward looking information is typically identified by words such as:
believe, expect, anticipate, intend, estimate, postulate and similar
expressions, or are those, which, by their nature, refer to future
events. Edgefront cautions investors that any forward-looking
information provided by Edgefront is not a guarantee of future results
or performance, and that actual results may differ materially from
those in forward looking information as a result of various factors,
including, but not limited to: Edgefront's ability to complete the
Transaction; the state of the real estate sector in the event the
Transaction are completed; recent market volatility; Edgefront's
ability to secure the necessary financing or to be fully able to
implement its business strategies and other risks and factors that
Edgefront is unaware of at this time. The reader is referred to
Edgefront's initial public offering Prospectus and Filing Statement for
a more complete discussion of risk factors relating to Edgefront and
their potential effects, copies of which may be accessed through
Edgefront's page on SEDAR at www.sedar.com.
This news release shall not constitute an offer to sell or the
solicitation of an offer to buy any securities nor shall there by any
sale of securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful.
SOURCE: Edgefront Realty Corp.
For further information:
Kelly C. Hanczyk at (416) 906-2379.