/NOT FOR DISSEMINATION IN THE UNITED STATES OR DISTRIBUTION THROUGH UNITED STATES NEWS OR WIRE SERVICES/
Shares issued: Class A - 17,094,490 Class B - 3,148,538
HALIFAX, May 17 /CNW/ - Richard Homburg, Chairman and Chief Executive Officer of Homburg Invest Inc. ("HII" or the "Company") (TSX: HII.A & HII.B and NYSE Euronext Amsterdam: HII), announced today that Homburg Canada Real Estate Investment Trust (the "REIT") has filed and obtained receipts for a final prospectus with the securities regulatory authorities of all provinces and territories in Canada in respect of its initial public offering of 16,000,000 units of the REIT (the "Units"). The Units will be issued at a price of $10.00 per Unit and will provide unitholders of the REIT with a cash-on-cash yield of 9.5% annually, to be paid through monthly distributions. Gross proceeds of the offering are expected to be $160,000,000.
The initial public offering of the REIT is the initial step in executing HII's strategy of unlocking value for its shareholders previously announced on December 16, 2009 when it declared its intention to spin off its real estate assets into five geographically based real estate entities. HII will announce its intentions with respect to subsequent steps in its strategy when they are confirmed.
An option to purchase up to an aggregate of 2,400,000 additional Units at the offering price has been granted to the underwriters of the offering, of which up to 960,000 Units are to be issued and sold by the REIT from treasury and 1,440,000 Units are to be sold by HII (one of the promoters of the REIT) as a secondary offering of a portion of the Units it will hold as a retained interest in the REIT, on a pro rata basis between the REIT and HII. The option may be exercised by the underwriters for a period of 30 days following closing of the offering and, if exercised in full, will result in gross proceeds to HII of $14,400,000.
The offering is being underwritten by a syndicate of underwriters led by TD Securities Inc. and including National Bank Financial Inc., Desjardins Securities Inc., CIBC World Markets Inc., Scotia Capital Inc., Canaccord Genuity Corp., HSBC Securities (Canada) Inc., Dundee Securities Corporation and Beacon Securities Ltd. The Toronto Stock Exchange (the "TSX") has conditionally approved the listing of the Units under the symbol "HCR.UN", subject to fulfilling all of the requirements of the TSX.
The offering is expected to close on May 25, 2010. Upon closing of the offering, the REIT will acquire a portfolio of Canadian income-producing commercial properties (the "Initial Properties"), comprised mainly of retail and office properties with certain industrial properties, as well as certain income-producing multi-family residential properties, from each of the Company and Homburg Canada Incorporated ("Homburg Canada") and the management business carried on by Homburg Canada in respect of the Initial Properties.
It is expected that the REIT will pay to the Company consideration of approximately $105.3 million in cash and approximately $152.9 million payable in the form of Units representing a 44.9% interest in the REIT (approximately 39.6% if the over-allotment option is exercised in full) for the Initial Properties owned by the Company.
HII intends to use the cash proceeds from the sale of Initial Properties to the REIT and the sale of Units upon the exercise of the over-allotment option, as applicable, for debt repayment and debt servicing, and also for general corporate purposes.
These securities have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States without registration or an applicable exemption from the registration requirements of that Act. This news release does not constitute an offer for sale of these securities in the United States of America or in the European Economic Area.
This press release contains forward-looking statements which reflect HII's and the REIT's current expectations regarding future events. The forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations. HII and the REIT disclaim any obligation to update these forward-looking statements, except as required by law.
About Homburg Canada Real Estate Investment Trust
Homburg Canada Real Estate Investment Trust is a recently created unincorporated open-ended real estate investment trust established pursuant to a declaration of trust under the laws of the Province of Quebec.
Upon closing of the offering, the REIT, which is managed internally, will own a portfolio of Canadian income-producing commercial properties, comprised mainly of retail and office properties with certain industrial properties, as well as certain income-producing multi-family residential properties. The properties comprise approximately 6.6 million square feet of commercial gross leasable area and 1,725 multi-family residential units located in Québec, Atlantic Canada, Western Canada and Ontario.
About Homburg Invest Inc.
Homburg Invest Inc. 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. Its head office is located in Halifax, Nova Scotia.
SOURCE Homburg Invest Inc.
For further information: For further information: Mr. Richard Homburg, Chairman and CEO, Homburg Invest Inc., (902) 468-3395; J. Richard Stolle, President and COO, Homburg Invest Inc., 31-20-573-3855; Paul de la Plante, NATIONAL Public Relations, (514) 843-2332