/NOT FOR DISTRIBUTION TO UNITED STATES NEWS WIRE SERVICES OR FOR
DISSEMINATION IN THE UNITED STATES/
TORONTO, Sept. 21, 2011 /CNW/ - C2C Industrial Properties Inc. ("C2C" or
the "Company") (TSXV - "CCH") announced today that an affiliate of the
Company (the "Purchaser") has acquired the right pursuant to a
conditional purchase agreement to acquire a portfolio of properties
located in Eastern Canada from an arm's length vendor (the
"Acquisition"). The portfolio consists of multi-tenant industrial
buildings totalling more than 600 million square feet. As an
investment, the subject portfolio aligns with the strategic plan of
C2C. The properties within the portfolio are stabilized,
income-producing assets located within close proximity to one another
in a targeted primary market. The portfolio provides a base of cash
flow and tenants necessary to develop and acquire growth opportunities
within the market.
The Purchaser's obligation to complete the Acquisition is subject to a
number of conditions precedent, including satisfactory completion of
due diligence and approval by the TSX Venture Exchange. If all of the
outstanding conditions are satisfied or waived in accordance with their
terms, the Company expects that the Acquisition will be completed in
the fourth quarter of 2011.
The Company also announced today that it has entered into an agreement
with a syndicate of agents co-led by GMP Securities L.P. and Desjardins
Securities Inc. to sell approximately CDN$30.0 million of subscription
receipts (the "Subscription Receipts") of the Company (the "Offering"),
together with an over-allotment option of up to 5% of the Offering
exercisable 48 hours prior to closing. The Subscription Receipts will
be offered on a private placement, best efforts agency, basis at a
price to be determined in the context of the market.
Upon closing of the Offering, the proceeds from the sale of the
Subscription Receipts, less the costs and expenses of the agents (the
"Net Escrowed Funds"), will be deposited into escrow with a third party
escrow agent to be held pending completion of the Acquisition and the
satisfaction of other escrow release conditions, including approval by
shareholders of certain amendments to the Asset Management Agreement
between the Company and Strathallen Capital Corp. Provided that closing
of the Acquisition and satisfaction of the escrow release conditions
occurs on or before November 18, 2011 unless such date is extended (the
"Release Date"), each Subscription Receipt will be automatically
exercised for one common share of the Company, and the Net Escrowed
Funds, less the agents' commission, will be released to the Company.
If the escrow release conditions are not satisfied on or prior to the
Release Date, the Net Escrowed Funds shall be distributed to the
holders of Subscription Receipts on a pro rata basis, and the Company
will make up any shortfall such that each holder will receive an amount
equal to the issue price for each Subscription Receipt.
Pursuant to applicable Canadian securities laws, the securities issued
under the Offering will be subject to a four-month hold period from the
time of closing of the Offering.
The Offering is subject to certain conditions including, but not limited
to, the receipt of all necessary approvals, including the approval of
the TSX Venture Exchange and applicable securities regulatory
authorities and satisfactory completion of due diligence by the agents.
This press release is not an offer to sell or the solicitation of an
offer to buy securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to qualification or
registration under the securities laws of such jurisdiction. The
securities being offered have not been, nor will they be, registered
under the United States Securities Act of 1933, as amended, and such
securities may not be offered or sold within the United States or to,
or for the account or benefit of, U.S. persons absent registration or
an applicable exemption from U.S. registration requirements.
Asset Management Amendments
It is a condition of the release of the Net Escrowed Funds that the
asset management agreement (the "Asset Management Agreement") dated May
16, 2011 between the Company and Strathallen Capital Corp. (the "Asset
Manager") be amended (the "Proposed Amendments").
The Proposed Amendments are a requirement of the Private Placement and
include amendments to the fee arrangements and internalization of the
asset management functions. The fee arrangements include:
acquisition fees calculated as a percentage of the purchase price paid
for a property, including the value of any non-cash consideration; and
asset management fees calculated on an annual basis as a percentage of
the market value of the assets of the Company and payable quarterly.
The Company intends to pay up to 50% of the acquisition and asset
management fees in common shares in the capital of the Company at a
price not to exceed the "discounted market price" as set out in the
policies of the TSX Venture Exchange. Any common shares issued by the
Company shall be delivered to an escrow agent to be held pursuant to
the terms of an escrow agreement on behalf of the Asset Manager and
released on the basis of 1/3 on the Termination Date (as defined below)
and 1/3 on each of the next two anniversaries of the Termination Date.
The Company intends to terminate the Asset Management Agreement on the
first date that the market value of the assets of the Company equal or
are greater than $500,000,000 (the "Termination Date"), at which time
the Company intends to internalize the asset management functions with
no fees payable to the Asset Manager.
The principals of the Asset Manager and related parties are obliged as
part of the Private Placement to invest $1,000,000 in the aggregate in
the Company including amounts previously invested by them.
The Company may consolidate the issued and outstanding Common Shares in
the capital of the Company on the basis of up to five existing Common
Shares for one new Common Share or on such other basis as deemed
appropriate by the Board (the "Share Consolidation"). The purpose of
the Share Consolidation is to reduce the number of outstanding Common
Shares and to facilitate the Private Placement.
A special meeting of shareholders will be held on November 3, 2011.
Shareholders will be asked at the meeting to approve the Proposed
Amendments and Share Consolidation. The Proposed Amendments require
approval by a majority of the disinterested shareholders and the Share
Consolidation requires approval by a special resolution of the
Shareholders. The Company will not proceed with the Proposed Amendments
and Share Consolidation if the Acquisition is not completed.
About C2C Industrial Properties Inc.
C2C is a real property company that recently completed its Qualifying
Transaction on the TSX Venture Exchange. C2C's principal objective is
to acquire, own and operate industrial properties across Canada. More
information about C2C (CCH: TSX-V) is available at www.sedar.com.
Forward Looking Statements
This document contains forward-looking statements within the meaning of
applicable securities laws relating to C2C and the environment in which
it operates and its strategy, action plans and investments, which may
involve estimates, forecasts and projections. These statements are not
guarantees of future performance and involve risks and uncertainties
that are difficult to predict and/or are beyond C2C's control. A number
of important factors could cause actual outcomes and results to differ
materially from those expressed in these forward-looking statements.
These factors include those set forth in this press release and other
public filings. Consequently, readers should not place any undue
reliance on such forward-looking statements. These forward-looking
statements are made as of the date of this press release. C2C is under
no obligation to update any forward-looking statements contained herein
should material facts change due to new information, future events or
other factors. All forward-looking statements attributable to C2C are
expressly qualified by these cautionary statements.
Neither the TSX Venture Exchange nor its Regulation Services Provider
(as that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this press
SOURCE C2C Industrial Properties Inc.
For further information:
C2C Industrial Properties Inc.
Christopher Ross, President