WINNIPEG, Oct. 28, 2013 /CNW/ - Lanesborough Real Estate Investment Trust (TSX: LRT.UN) ("LREIT") announced today that it has agreed to sell the property known as Nova Court located at 476 Range Lake Road in Yellowknife, Northwest Territories (the "Property") for a price of $21,680,000 subject to customary closing adjustments (the "Proposed Transaction").
Nova Court Apartments consists of a four-storey, 107 suite apartment building and is comprised of 72 one-bedroom and 35 two-bedroom suites as well as 8,300 square feet of partially unfinished commercial space.
The purchaser of the Property is Temple Hotels Inc. ("Temple"), a real estate company which owns and operates 25 hotel properties.
The sale price of $21,680,000 will be satisfied by Temple assuming the existing mortgage debt in respect of the Property in the amount of approximately $8,000,000, with the balance to be paid in cash. The sale is expected to result in net cash to LREIT of approximately $13.6 million which will be used to prepay debt, including $10,000,000 principal amount of the 9% second mortgage bonds due December 2015 (TSX: LRT.NT.A). The Property was purchased by LREIT in March 2007 for $15 million.
Mr. Arni Thorsteinson is the Chief Executive Officer and a trustee of LREIT and the Chief Executive Officer and a director of Temple. The Proposed Transaction was approved by the independent trustees of LREIT. Mr. Arni Thorsteinson abstained from voting on the Proposed Transaction. An independent third party appraisal was obtained which supports the consideration to be received by LREIT for the Property.
The closing of the Proposed Transaction and the repayment of the second mortgage bond are scheduled to occur by December 31, 2013 and are subject to the receipt of final regulatory approval.
LREIT is a real estate investment trust, which is listed on the Toronto Stock Exchange under the symbols LRT.UN (Trust Units), LRT.DB.G (Series G Convertible Debentures), LRT.NT.A (Second Mortgage Bonds due December 24, 2015), LRT.WT (Warrants expiring March 9, 2015) and LRT.WT.A (Warrants expiring December 23, 2015). For further information on LREIT, please visit our website at www.lreit.com.
The TSX has not reviewed or approved the contents of this press release and does not accept responsibility for the adequacy or accuracy of this press release.
This press release contains certain statements regarding the proposed transaction described herein that could be considered as forward-looking information. The forward-looking information is subject to certain risks and uncertainties, which could result in actual results differing materially from the forward-looking statements. There can be no certainty that the transaction will be completed within the timeline set forth herein or all at.
SOURCE: Lanesborough Real Estate Investment Trust
For further information:
Arni Thorsteinson, Chief Executive Officer, or Gino Romagnoli, Investor Relations
Tel: (204) 475-9090, Fax: (204) 452-5505, Email: [email protected]