BROSSARD, QC, Sept. 9, 2013 /CNW Telbec/ - BLF Real Estate Investment Trust ("BLF REIT") (TSXV: BLF.UN), announces that it filed on Friday a preliminary prospectus with the securities regulatory authorities in each of the provinces of Canada in connection with a proposed initial public offering of its units (the "Offering") as well as concurrent private placement by Fonds immobilier de solidarité FTQ II, s.e.c. (the "Concurrent Private Placement"). A copy of the preliminary prospectus is available on SEDAR (www.sedar.com). The Offering is being made through a syndicate of underwriters led by Scotiabank and National Bank Financial Inc. and including BMO Capital Markets, TD Securities Inc., Desjardins Securities Inc., Canaccord Genuity Corp. and Laurentian Bank Securities (collectively the "Underwriters").
It is currently anticipated in the preliminary prospectus that the offering price will be between $8.70 and $9.70 per unit (the "Offering Price"). Based on that range and a total offering amount of $100 million, it is anticipated that between 10,309,278 and 11,494,253 units of BLF REIT will be distributed under the Offering.
BLF REIT has granted to the Underwriters an over-allotment option which is exercisable in whole or in part and at any time up to 30-days after closing of the Offering to purchase a number of additional units in a range currently estimated between 1,546,392 and 1,724,138 (representing 15% of the number of units offered under the Offering) (the "Over-Allotment Option").
The net proceeds of the Offering and the Concurrent Private Placement are estimated to be approximately $105.0 million after deduction of the Underwriters' fee and the estimated expenses of the Offering and the Concurrent Private Placement. BLF REIT will use the net proceeds of the Offering together with the proceeds from the Concurrent Private Placement described hereunder, to repay an amount of approximately $9.5 million outstanding on its term acquisition facility which was used to fund the previously announced purchases of the Mézy Property on June 14, 2013 and the Domaine St-Martin Property on August 30, 2013, to indirectly acquire additional properties and any remaining proceeds for working capital and for general trust purposes. The net proceeds from the issue of units by BLF REIT on exercise of the Over-Allotment Option, if exercised, will be used by BLF REIT to fund future acquisitions and for general trust purposes in accordance with its investment guidelines and operating policies.
Mathieu Duguay, President and Chief Executive Officer of BLF REIT, anticipates subscribing for $1.3 million of units in the Offering, bringing the total cost of his investment in units of BLF REIT and Class B LP Units of BLF Limited Partnership to $7 million.
Concurrent Private Placement
In accordance with a commitment letter dated August 29, 2013, Fonds immobilier de solidarité FTQ II s.e.c. has agreed to subscribe, on a private placement basis, concurrently with the closing of the Offering, to a number of units equal to an amount of 15% of the aggregate of the total offering amount and the Concurrent Private Placement, subject to a maximum of $12 million, at a price equal to the Offering Price. The closing of the Concurrent Private Placement is conditional upon the closing of the Offering. No commission or other fee will be paid to the Underwriters in connection with the sale of units pursuant to the Concurrent Private Placement. The prospectus does not qualify the distribution of the units issued pursuant to the Concurrent Private Placement. The units purchased pursuant to the Concurrent Private Placement will be subject to a statutory hold period.
It is expected that no new insider will result from the closing of the Offering and the Concurrent Private Placement.
The Additional Properties
The portfolio of properties to be acquired by BLF REIT consists of seven multi-family residential properties located in select target markets in Québec totaling 1,810 apartment suites. The aggregate purchase price is anticipated to be approximately $163.4 million to be paid in cash for approximately $84.6 million, as well as with new and assumed mortgages totalling approximately $78.8 million. BLF REIT will pay a brokerage commission of approximately $0.8 million, including applicable taxes, upon the acquisition of one of the properties. The vendors are all dealing at arm's length with BLF REIT.
About BLF REIT
The principal business of BLF REIT is acquiring, holding, developing, maintaining, improving, leasing, managing or otherwise dealing with income-producing multi-family residential properties located throughout Québec. BLF REIT currently owns eight properties located in greater Montreal, Sherbrooke and Québec City totaling 1,054 apartment units.
This press release contains forward-looking statements. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "estimates", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements expressed or implied by the forward-looking statements. Accordingly, readers should not place undue reliance on forward-looking statements. The factors identified above including but not limited to the expected completion of the Offering, the Concurrent Private Placement, or the acquisitions of additional properties are not intended to represent a complete list of the factors that could affect BLF REIT. Management disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or circumstances, except as required by law.
No securities regulatory authority has either approved or disapproved the contents of this press release. This press release does not constitute an offer to sell or a solicitation of an offer to buy any securities of BLF REIT in any jurisdiction in which such offer, solicitation of sale would be unlawful. These securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any U.S. state securities laws and may not be offered or sold in the United States except in compliance with the registration requirements of the U.S. Securities Act and applicable U.S. state securities laws or pursuant to an exemption therefrom.
Neither the TSX-V nor its Regulation Services Provider (as that term is defined in policies of the TSX-V) accepts responsibility for the adequacy or accuracy of this release.
SOURCE: BLF Real Estate Investment Trust
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