EDMONTON, April 26, 2016 /CNW/ - SpruceLand Properties Inc. ("SpruceLand" or the "Corporation") today announced that, effective April 25, 2016, it has closed the previously announced sale of the bulk of its portfolio of commercial properties (the "Commercial Properties Disposition") for an aggregate sale price of $45.8 million. The Commercial Properties Disposition included 10 wholly-owned properties and the Corporation's 50% interest in 2 jointly-owned properties. The aggregate consideration was paid by: (i) the assumption of mortgages with a total principal balance of approximately $24.2 million; and (ii) a cash payment of approximately $21.6 million.
Originally, the Commercial Properties Disposition contemplated the sale of 11 wholly-owned commercial properties and the Corporation's 50% interest in 6 jointly-owned properties, however, pursuant to the terms of the purchase and sale agreement, certain properties and interests were subject to rights of first refusal in favour of third parties and, upon the exercise of such rights of first refusal, such properties and interests were removed from the transaction and the purchase price thereunder accordingly reduced.
On February 3, 2016, the Corporation closed the previously announced sale of its joint venture interest in the property known as the "137 Ave Property" for a sale price of approximately $6.4 million (the same price that would have been paid for such property under the Commercial Properties Disposition). The sale price was satisfied by: (i) the assumption of a mortgage with an approximate balance of $4.1 million; and (ii) a cash payment of approximately $2.3 million.
On April 15, 2016, the Corporation transferred to a purchaser title to its Lakeland Centre, Lakeland Terrace and Lakeland Place properties in accordance with the previously announced sale of the properties (the "LC/LT Disposition") for an aggregate sale price of $3.7 million (the sale price attributed to Lakeland Centre, which property was previously included in the Commercial Properties Disposition, is the same price that would have been paid for such property under the Commercial Properties Disposition). The sale price is to be satisfied by: (i) new mortgage financing of $2.6 million, which proceeds have yet to be received, but are expected to be paid shortly; (ii) a vendor take back mortgage of $0.2 million; and (iii) a cash payment of approximately $0.9 million, which has been received. In the event the new mortgage financing proceeds are not received, the purchaser is obliged to transfer title back to the Corporation and would be liable for damages.
In addition, the Corporation has three other previously announced pending sales, all of which were conditional upon the closing of the Commercial Properties Disposition:
- The sale of the Corporation's two manufactured home communities (the "Manufactured Homes Communities Disposition") for a sale price of approximately $40.6 million, which is to be satisfied by: (i) the assumption of mortgages with an aggregate principal balance of approximately $6.0 million; and (ii) a cash payment of approximately $34.6 million;
- The sale of the Corporation's 50% equity interest in Coventry Lands Group Inc. (the "Coventry Disposition") for a sale price of approximately $2.2 million, which is to be satisfied by: (i) the assumption of mortgages with an aggregate principal balance of approximately $0.9 million; and (ii) a cash payment of approximately $1.3 million; and
- The sale of the Corporation's 50% equity interest in 715555 Alberta Ltd. (the "715555 Disposition") for a sale price of approximately $4.3 million, which is to be satisfied by: (i) the assumption of mortgages with an aggregate principal balance of approximately $2.3 million; and (ii) a cash payment of approximately $2.0 million.
With the closing of the Commercial Properties Disposition, all three sales are now unconditional and are scheduled to close on May 25, 2016, April 30, 2016 and April 30, 2016, respectively. Upon closing of these sales, the Corporation will have disposed of approximately 96% of its real estate assets.
At the shareholders meeting held on March 10, 2016, the Corporation obtained shareholder approval for the aforementioned sales and to subsequently dissolve pursuant to the provisions of the Business Corporations Act (Alberta), and in conjunction therewith, to apply to the Alberta Securities Commission for an order deeming it no longer to be a reporting issuer, to liquidate its other residual assets (consisting principally of two investment properties and raw land holdings), discharge its remaining liabilities and distribute its remaining property in one or more distributions to shareholders. As previously announced, the Corporation contemplates an initial distribution to shareholders of approximately $25.00 per share upon completion of the aforementioned dispositions.
SpruceLand Properties Inc., formerly Spruce Land Developments Ltd., was founded with the construction of a single multi-family project in Slave Lake, Alberta in 1969. The Corporation grew consistently and, prior to the Commercial Properties Disposition, had a diversified portfolio of revenue producing properties including office, retail and industrial buildings and manufactured home parks, in numerous communities in North, Central, and Southern Alberta, Kelowna, BC and expansion into Regina and Saskatoon, Saskatchewan. SpruceLand Properties Inc. is a Canadian controlled private corporation for tax purposes and a reporting issuer in the Province of Alberta.
Caution Regarding Forward-Looking Statements
This press release contains "forward-looking information" as defined under applicable Canadian securities law ("forward-looking information" or "forward-looking statements") which reflect management's expectations regarding objectives, plans, goals, strategies, future growth, results of operations, performance, business prospects and opportunities of the Corporation. Statements other than statements of historical fact contained in this press release may be forward-looking information. Some of the specific forward-looking statements in this press release include, but are not limited to, statements with respect to: the closing of the Manufactured Home Communities Disposition, the Coventry Disposition and the 715555 Disposition and the expected terms and closing dates thereof; the contemplated initial distribution to shareholders; and expectations, projections or other characterizations of future events or circumstances and the future economic performance of the Corporation. The Corporation has based these forward-looking statements on its current expectations and assumptions about future events, which may prove to be incorrect.
When relying on forward looking statements to make decisions, readers are cautioned not to place undue reliance on these statements, as forward-looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results and do not take into account the effect of transactions or other items announced or occurring after the statements are made. All forward-looking information in this press release speaks as of the date of this press release. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements. The Corporation does not undertake any obligation to update any such forward-looking information, whether as a result of new information, future events or otherwise, except as required by applicable law.
SOURCE Spruceland Properties Inc.
For further information: Steve Cribb, President & CEO, 16880 - 111 Avenue, Edmonton, AB T5M 4C9, Phone: 780.424.5775 Fax: 780.425.8577, Email: email@example.com