Shares issued: Class A - 16,666,320 Class B - 3,148,739
HALIFAX, June 11 /CNW/ Richard Homburg, Chairman and Chief Executive
Officer of Homburg Invest Inc. ("Homburg" or the "Company") (TSX: HII.A &
HII.B and NYSE Euronext Amsterdam: HII) today announced on behalf of the
Company, a new strategic direction to focus the Company's activities
exclusively on income producing properties. Homburg Invest has appointed a
special committee to consider a plan to spin off the Company's development and
other non-income producing properties to its shareholders. As part of the new
strategic direction, the special committee will also consider a plan to
reorganize Homburg's equity structure by creating a single class of common
shares, each with a single vote and equal dividend rights. The terms of the
share reorganization proposal, including the share exchange ratio, which will
be subject to shareholder approval, will be announced in the coming months.
Homburg also announced that no dividend will be payable in 2009. In
future years, as previously announced, the Company will declare an annual
dividend based on the Company's performance and market conditions. Dividends
will be declared in June and paid in July.
Under its new strategy, Homburg Invest will hold income-producing
properties. The Company will be a growing real estate investment company with
strong cash flows that will, subject of course to market conditions, pay
healthy annual dividends to its shareholders. Homburg Invest will target a 50%
to 60% ratio of debt to total equity. To achieve this, as previously
announced, the Company will make greater use of strategic alliances and
partnerships. The Company will continue to be listed on both the Toronto Stock
Exchange (TSX) and on NYSE Euronext.
The new spun out entity will hold assets projected for future
development. This entity will strive to have no long-term debt. Development
projects will begin again once financial markets have stabilized. It is
anticipated that the assessment process will be completed by autumn 2009.
Homburg will continue to issue Homburg Capital Security instruments to
raise additional capital as part of its debt management strategy. The Homburg
Capital Security A is a 9.5%, 99-year bond that is to be listed on NYSE
Amsterdam. The issue of HCSAs permits the Company to reduce its debt-to-equity
ratio, as 80% of all outstanding HCSAs are considered equity for accounting
purposes. Homburg Invest is considering offering holders of Homburg bonds the
opportunity to exchange their holdings for HCSA.
"Our financial position is solid," said Richard Homburg. "We are
profitable and funds from operations remain healthy. These initiatives will
enable Homburg to build our cash position, further strengthen our balance
sheet and create greater certainty and stability for our shareholders in these
difficult economic times. Under this new strategic direction, we will be in an
excellent position to build value for shareholders and to take advantage of
the best opportunities that present themselves in the months and years ahead,"
Richard Homburg added.
"The creation of a single class of voting shares will benefit all our
shareholders. Indeed, we are taking this initiative because we believe
strongly that we own high quality assets, the value of which is not reflected
in our shares. We believe in the ability of markets to discover that value."
Homburg Invest will provide more details on the various elements of its
strategic initiatives as they become available.
About Homburg Invest
Homburg Invest Inc., with its head office in Halifax, Nova Scotia, owns
and develops a diversified portfolio of quality real estate including office,
retail, industrial and residential apartment and townhouse properties
throughout Canada, the United States and Europe.
This news release may contain statements which by their nature are
forward looking and express the Company's beliefs, expectations or intentions
regarding future performance, future events or trends. Forward looking
statements are made by the Company in good faith, given management's
expectations or intentions however, they are subject to market conditions,
acquisitions, occupancy rates, capital requirements, sources of funds, expense
levels, operating performance and other matters. Therefore, forward looking
statements contain assumptions which are subject to various factors including:
unknown risks and uncertainties: general economic conditions; local market
factors; performance of other third parties; environmental concerns; and
interest rates, any of which may cause actual results to differ from the
Company's good faith beliefs, expectations or intentions which have been
expressed in or may be implied from this news release. Therefore, forward
looking statements are not guarantees of future performance and are subject to
known and unknown risks. Information and statements in this document, other
than historical information, should be considered forward-looking and reflect
management's current views of future events and financial performance that
involve a number of risks and uncertainties. Factors that could cause actual
results to differ materially include, but are not limited to, the following:
general economic conditions and developments within the real estate industry,
competition and the management of growth. The Toronto Stock Exchange has
neither approved nor disapproved of the information contained herein.
For further information:
For further information: Mr. Richard Homburg, Chairman and CEO, Homburg
Invest Inc.; J. Richard Stolle, President and COO, Homburg Invest Inc.; Media
inquiries: AnnMarie Boudreau, (902) 222-5908