Realex Properties Corp. announces completion of subscription receipts financing and execution of definitive agreements in connection with previously announced acquisition



    CALGARY, July 15 /CNW/ - Realex Properties Corp. ("Realex") is pleased to
announce that it has completed its previously announced private placement of
subscription receipts. Pursuant to the private placement, Realex issued
11,906,435 subscription receipts at a price of $2.30 per subscription receipt
for gross proceeds of $27.4 million. Insiders of Realex together with an
individual who will become an insider of Realex upon the successful completion
of the Acquisition (as defined below) acquired an aggregate of 3,434,783
subscription receipts representing 28.8% of the offering, at an aggregate
purchase price of $7.9 million.
    The subscription receipts and the securities issuable on conversion of
the subscription receipts are subject to a four-month hold period expiring on
November 16, 2008. RBC Capital Markets and Genuity Capital Markets acted as
co-lead agents and co-bookrunners, and Desjardins Securities Inc. and TD
Securities Inc. acted as agents for this private placement. The net proceeds
from the private placement will be used as partial consideration for the
previously announced acquisition (the "Acquisition") by Realex of the Cora
Group, a portfolio which includes six office buildings located in Kitchener
and Waterloo, Ontario, comprising approximately 933,000 sq. ft. of rentable
area, approximately 2,000 parking stalls and 470,000 sq. ft of development
    The gross proceeds of the private placement of subscription receipts will
be held by an escrow agent and invested in approved interest-bearing
instruments pending closing of the Acquisition.
    Upon closing of the Acquisition, each subscription receipt will
automatically convert into one common share and one non-voting share of
Realex, without any additional consideration. If closing of the Acquisition
does not occur on or before September 30, 2008, Realex will repay to holders
of subscription receipts their original subscription price, plus accrued
    Realex is also pleased to announce that it has entered into definitive
documentation with regards to the Acquisition. The aggregate purchase price
for the office portfolio and the management company, including estimated
closing costs, is $141.8 million. It is intended that the purchase price will
be satisfied through cash consideration of $45.0 million, a vendor take-back
note of $4.5 million, the assumption of existing property level mortgage debt
totalling approximately $71.7 million and the issuance of 7,729,000 common
shares and 7,729,000 non-voting shares of Realex to the owner of Cora at a
price of $1.33 per share.
    "As we previously indicated, this Acquisition is of strategic importance
to Realex in building a national real estate platform underpinned by excellent
management teams in each of our core markets. We look forward to the insight
and new opportunities that will come with the addition of Manfred Conrad to
our board of directors and Adrian Conrad to our senior management team", said
Realex's President and CEO, Marc Sardachuk.
    The Acquisition is expected to close on or before August 29, 2008 and
will be subject to customary closing conditions including consent of certain
lenders and regulatory approval.
    For more information on the Acquisition, please refer to the June 2008
Investor Presentation posted in the investor's section of the Corporation's
website -

    The TSX Venture Exchange has neither approved nor disapproved the
    contents of this news release. The TSX Venture Exchange does not accept
    responsibility for the adequacy or accuracy of this news release.

    This press release may contain forward looking statements and information
within the meaning of applicable securities legislation. Although Realex
Properties Corp. believes that the anticipated future results, performance or
achievements expressed or implied by the forward looking statements and
information are based upon reasonable assumptions and expectations, the reader
should not place undue reliance on forward looking statements and information
because they involve known and unknown risks, uncertainties and other factors
which may cause the actual results, performance or achievements of Realex to
differ materially from anticipated future results, performance or achievement
expressed or implied by such forward looking statements and information.
Accordingly, Realex cannot give any assurance that its expectations will in
fact occur and cautions that actual results may differ materially from those
in the forward looking statements. Factors that could cause actual results to
differ materially from those set forth in the forward looking statements and
information include: general economic conditions; local real estate conditions
including the development of properties in close proximity to Realex's
properties; timely leasing of newly-developed properties and re-leasing of
occupied square footage upon expiration; dependence on tenants' financial
condition; the uncertainties of real estate development and acquisition
activity; the ability to effectively integrate acquisitions; interest rates;
availability of equity and debt financing; the impact of newly-adopted
accounting principles on Realex's accounting policies and on period-to-period
comparisons of financial results; and other risks and factors described from
time to time in the documents filed by Realex with the securities regulators
in Canada, including in the Annual Information Form under the heading
"Description of the Business - Risk Factors" and in Realex's annual
Management's Discussion and Analysis. Realex undertakes no obligation to
publicly update or revise any forward looking statements or information,
whether as a result of new information, future events or otherwise, except as
required by securities laws.

For further information:

For further information: Marc Sardachuk, President and Chief Executive
Officer, Realex Properties Corp., Telephone: (403) 264-5889, Facsimile: (403)
264-5892; Mark Suchan, Chief Financial Officer, Realex Properties Corp.,
Telephone: (403) 264-5889, Facsimile: (403) 264-5892

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