TORONTO, March 12 /CNW/ - GT Capital Corporation ("GT Canada"), a capital pool company listed on the TSX Venture Exchange (the "Exchange"), is pleased to announce that it completed its previously announced acquisition (the "Acquisition") of a medical office building known as "Queenston Medical-Dental Centre" (the "Property"), a 15,584 square foot facility located on approximately 1.05 acres of land in Hamilton, Ontario from 941703 Ontario Limited (the "Vendor"). The Acquisition and the previously announced private placement (the "Private Placement") upon the terms and conditions described below, collectively constitute GT Canada's 'Qualifying Transaction' (the "Transaction") under Exchange Policy 2.4 - Capital Pool Companies ("Policy 2.4"). For further details on the Transaction and related matters, please see the information circular of GT Canada dated November 12, 2009 (the "Information Circular") available for review at www.sedar.com.
As Canada's first publicly-traded company focused exclusively on medical office properties, GT Canada's goal will be to increase shareholder value by becoming the leading owner and developer of these assets in Canada through an aggressive acquisition and development program aimed at creating a geographically diversified portfolio of high quality properties that will generate stable and growing rental income and capital appreciation opportunities.
"We are delighted to have completed this important initial step in GT Canada's evolution and would like to thank our investors for their support as we worked toward completing our qualifying transaction," said GT Canada's Chief Executive Officer, Andrew Shapack. "We believe that Canadian healthcare represents one of the single biggest real estate opportunities in a long time. GT Canada is thrilled to bring the qualities of the unique medical office asset class to the marketplace, which include stability, high tenant retention rates and stable rents, all within the landscape of a rapidly aging population and universal health care."
GT Canada plans to identify a significant pipeline of acquisition opportunities and begin pursuing these immediately with a view to significantly expanding its property portfolio over the short to medium term.
Final completion of the Transaction will occur upon the issuance by the Exchange of its Final Exchange Bulletin (as defined in Policy 2.4), which is anticipated to occur during the week of March 15, 2010. Upon the issuance of the Final Exchange Bulletin, it is anticipated that GT Canada will be listed as a "Tier 2" issuer on the Exchange and its common shares will commence trading under the symbol "MOB".
Pursuant to the Acquisition, GT Canada acquired the Property for an aggregate purchase price of $3,569,000 (the "Purchase Price"), comprised of: (i) the assumption by GT Canada of approximately $2,100,000 in mortgage debt on the Property, (ii) 120,000 common shares of GT Canada (with a value of $30,000), and (iii) the balance in cash. The cash portion of the Purchase Price was funded by GT Canada using a portion of the proceeds from the Private Placement.
Pursuant to the applicable rules and policies of the Exchange, the common shares issued as consideration pursuant to the Acquisition are subject to an escrow agreement for a period of 36 months pursuant to requirements of the TSX Venture Exchange, with 10% of the escrowed securities released from escrow on the date of the issuance of the Final Exchange Bulletin (the "Bulletin Date") and an additional 15% being released on the dates 6 months, 12 months, 18 months, 24 months, 30 months and 36 months following the Bulletin Date. The common shares issued as consideration pursuant to the Acquisition are also subject to a four-month hold period expiring July 13, 2010.
The Private Placement
In connection with the Acquisition, GT Canada completed a Private Placement of 10,877,837 subscription receipts (which were automatically converted into common shares on a one-for-one basis upon completion of the Acquisition) at a price of $0.25 per common share for gross proceeds of $2,719,459.25. The common shares issued pursuant to the Private Placement will be subject to a hold period that expires June 5, 2010.
M Partners Inc. ("M Partners") acted as lead agent in respect of the Private Placement. M Partners received a cash commission of $157,380, as well as warrants to purchase up to 5% of the number of common shares issued pursuant to the Private Placement at $0.25 per share.
GT Canada intends to use a portion of the proceeds from the Private Placement to fund the cash portion of the Purchase Price and intends to use the balance to identify potential future acquisitions and for general working capital purposes (including to pay expenses associated with the Transaction).
Following closing of the Transaction, there will be 19,833,505 common shares issued and outstanding. Of these, 5,559,833 will be subject to escrow provisions similar to those described above.
In connection with the Acquisition, the company has changed its name to "GT Canada Medical Properties Inc.".
Board of Directors and Management
GT Canada is pleased to announce that C. Bruce Burton, Victor Wells and Denim Smith have agreed to join GT Canada's board of directors, subject to the approval by the Exchange. To accommodate these appointments, Mr. Richard Shapack tendered his resignation as a director. Mr. Shapack will continue to act as a consultant and strategic advisor to the board. In connection with their appointments, Messrs. Burton and Wells subscribed for an aggregate of 80,000 common shares of GT Canada at a price of $.25 per share.
GT Canada also announced today that Sean Nakamoto has been named Chief Financial Officer of the company, subject to the approval of the Exchange. Mr. Nakamoto replaces interim Chief Financial Officer Morris Hurwitz, who will continue to provide consulting services to GT Canada under the title "Vice-President Treasury".
"GT Canada is very pleased to welcome Sean Nakamoto to the senior management team," said Andrew Shapack. "Sean is one of a very few medical office financial experts in Canada. His creative resourcefulness, analytical abilities and industry relationships are expected to help GT Canada achieve its goal of becoming one of the leading owners and developers of medical office building assets in Canada."
The following table sets out the board of directors, management and consultants of GT Canada together with the number of stock options granted to each individual on closing of the Acquisition. All such options expire five years from the date of grant and are exercisable at a price of $0.25.
Number of Options
Granted on Closing
Name Position of the Acquisition
---------------------------- ---------------------- --------------------
C. Bruce Burton ............ Director 30,000
Doug Friars, M.D. .......... Director 46,484
Richard Michaeloff ......... Director 46,484
Denim Smith ................ Director 102,734
Stanley B. Swartzman ....... Director 46,484
Seymour Temkin ............. Director 46,484
Edward Thornley ............ Director 46,484
Victor Wells ............... Director 30,000
Andrew I. Shapack .......... Chief Executive Officer 265,575
Darren Thornley ............ Chief Operating Officer 132,787
Sean Nakamoto .............. Chief Financial Officer 30,000
Richard A. Shapack ......... Consultant 46,484
Morris Hurwitz ............. Consultant 20,000
The Transaction is subject to the final approval of the Exchange.
This news release contains "forward-looking statements" within the meaning of applicable securities laws relating to the completion the Transaction, including statements regarding the final approval of the Transaction by the Exchange. Readers are cautioned not to place undue reliance on forward-looking statements. Actual results and developments may differ materially from those contemplated by these statements depending on, among other things, the risk that GT Canada may not receive final approval from the Exchange and the risk that GT Canada may not be able to complete acquisitions on favourable terms or at all. The statements in this news release are made as of the date of this release. The factors identified above are not intended to represent a complete list of the factors that could affect GT Canada. Additional factors are noted under "Risk Factors" in the Information Circular and in GT Canada's initial public offering prospectus dated March 7, 2008, copies of which may be obtained on the SEDAR website at www.sedar.com.
The TSX Venture Exchange Inc. has in no way passed upon the merits of the Transaction and has neither approved nor disapproved of the contents of this press release.
SOURCE GT CANADA CAPITAL CORPORATION
For further information: For further information: Andrew Shapack, Chief Executive Officer, GT Canada Capital Corporation, (416) 572-2170