Chief Executive Officer Acquires 1,606,000
million Trust Units to Increase Ownership to
9.9%
and Insiders Acquire an
Additional 374,925 Trust Units to Collectively Increase Ownership
to 11.4%
/NOT FOR DISTRIBUTION IN THE U.S. OR OVER U.S.
NEWSWIRES/
"This news release constitutes a "designated news release"
for the purposes of the REIT's prospectus supplement dated
April 21, 2022 to its short form base
shelf prospectus dated February 17,
2022."
TORONTO, April 12,
2023 /CNW/ - True North Commercial Real Estate
Investment Trust (TSX: TNT.UN) (the "REIT") announced today
that it has undertaken additional initiatives to further its
capital strengthening and unitholder ("Unitholder") value
strategy including its filing of a notice with the Toronto Stock
Exchange ("TSX") to make a normal course issuer bid
("NCIB") and the suspension of the REIT's distribution
reinvestment plan ("DRIP"). The REIT also announced that
since March 16, 2023 insiders of the
REIT, including Daniel Drimmer, the
REIT's Chairman of the Board and Chief Executive Officer, have
acquired an aggregate of 1,980,925 trust units ("Units")
reflecting their ongoing confidence in the REIT's ability to
improve long-term Unitholder value.
"The implementation of these additional initiatives will further
advance the REIT's previously announced unitholder value plan and
demonstrates management's commitment to improving the strength of
the REIT's near and long-term financial position," explained
Daniel Drimmer. "The addition of a
normal course issuer bid together with the suspension of the
distribution reinvestment plan reflects management's opinion that
the REIT's units are currently under-valued and these mechanisms
should benefit Unitholders by increasing their equity interest in
the REIT's assets".
Normal Course Issuer Bid
The REIT and its board of trustees ("Board of
Trustees") have authorized a NCIB for its Units, subject to
the approval by the TSX. The REIT believes that its Units trade in
a price range which does not adequately reflect the value of such
Units in relation to the business of the REIT and its future
business prospects. As a result, depending upon future price
movements and other factors, the REIT considers its outstanding
Units may represent an attractive investment for itself. Therefore,
from time to time, the purchase of Units at certain market prices
below its net asset value presents an attractive use of the REIT's
funds that should afford additional value and liquidity for the
issued and outstanding Units while benefitting Unitholders by
increasing their proportionate equity interest in the REIT.
Decisions regarding the timing of purchases under the NCIB will be
determined by management of the REIT based on market conditions,
Unit price and other factors. Management may elect to not purchase
any Units under the NCIB or may elect to suspend or discontinue the
NCIB at any time.
Under the terms of the NCIB, subject to TSX approval, the REIT
will have the ability to purchase for cancellation up to a maximum
of 8,239,557 of its Units (representing 10% of the REIT's public
float of 82,395,573 Units). Purchases under the NCIB will be
made through the facilities of the TSX or through a Canadian
alternative trading system and in accordance with applicable
regulatory requirements at a price per Unit equal to the market
price at the time of acquisition. The NCIB will commence on
April 18, 2023 and remain in effect
until the earlier of April 17, 2024
or the date on which the REIT has purchased the maximum number of
Units permitted under the NCIB. The REIT's average daily trading
volume from October 1, 2022 until
March 31, 2023, was 261,748 Units. In
accordance with the rules of the TSX, 25% of that average daily
trading volume (65,437 Units) is the REIT's daily limit for
purchases under the NCIB made through the facilities of the TSX,
subject to block purchase exceptions. As of the close of business
on April 6, 2023, the number of
issued and outstanding Units was 92,103,964. Any Units acquired
through the NCIB will be cancelled. The REIT has not purchased any
Units in the previous 12-month period.
In connection with the NCIB, the REIT will enter into an
automatic securities purchase plan ("ASPP") with CIBC World
Markets Inc. (the "Broker"). The ASPP is intended to allow
for the purchase of Units under the NCIB when the REIT would
ordinarily not be permitted to purchase Units due to regulatory
restrictions and customary self-imposed blackout periods. Pursuant
to the ASPP, the REIT has provided instructions to the Broker to
make purchases under the NCIB in accordance with the terms of the
ASPP, which may not be varied or suspended during the term of the
ASPP. Such purchases will be determined by the Broker at its sole
discretion based on purchasing parameters set by the REIT in
accordance with the rules of the TSX, applicable securities laws
and the terms of the ASPP. Units will be purchased through the
facilities of the TSX or through a Canadian alternative trading
system. Subject to TSX approval, the ASPP is expected to be
implemented on April 18, 2023, and if
not terminated sooner based on the terms of the ASPP, will end on
April 17, 2024.
Outside of pre-determined blackout periods, Units may be
purchased under the NCIB based on management's discretion, in
compliance with TSX rules and applicable securities laws. All
purchases made under the ASPP will be included in computing the
number of Units purchased under the NCIB.
Distribution Reinvestment
Plan
Effective immediately, the REIT has suspended the DRIP until
further notice. As a result, Unitholders will receive distributions
in cash effective with the distribution currently scheduled to be
paid on April 17, 2023 to Unitholders
of record on March 31, 2023. If the
REIT elects to reinstate the DRIP in the future, the Unitholders
enrolled in the DRIP at the time of suspension and who remain
enrolled at the time of reinstatement will automatically resume
participation in the DRIP at that time. The suspension of the DRIP
is expected to provide the REIT with additional flexibility to
continue advancing its objectives and focus on value-creating
opportunities while maximizing Unitholder value.
Insider Acquisitions of
Units
To demonstrate their confidence in the REIT's business plan
which includes its capital strengthening and Unitholder value
strategy, Daniel Drimmer, the REIT's
Chief Executive Officer and Chairman of the Board has acquired
1,606,000 Units and other members of the REIT's management and the
Board of Trustees acquired an additional 374,925 Units through
the TSX between March 16, 2023 and
April 5, 2023, at prices ranging from
$3.18 to $3.49 per Unit. Further details are available on
sedi.ca. With the REIT expecting to file its financial
statements and management's discussion and analysis for the period
ended March 31, 2023 on May 9, 2023, and in accordance with the REIT's
insider trading policy, insiders are restricted from purchasing
further units on the TSX, until May
11, 2023. As a result of their recent purchases, Mr.
Drimmer now owns 8,540,047 Units, or approximately 9.9% of the
REIT's outstanding Units, and collectively all insiders of the REIT
now own an aggregate of 9,708,391 Units, or approximately
11.4% of the REIT's outstanding Units as of April 11, 2023.
Timing of Release of Q1-2023
Results
The REIT intends to release its financial results for the three
months ended March 31, 2023 on
Tuesday, May 9, 2023.
About the REIT
The REIT is an unincorporated, open-ended real estate investment
trust established under the laws of the Province of Ontario. The REIT currently owns and operates
a portfolio of 46 properties consisting of approximately 4.9
million square feet in urban and select strategic secondary markets
across Canada. The REIT is focused
on growing its portfolio principally through acquisitions across
Canada and such other
jurisdictions where opportunities exist.
For more information regarding the REIT, please visit
www.sedar.com or the REIT's website at www.truenorthreit.com.
Forward-looking
Statements
Certain statements contained in this press release constitute
forward-looking information within the meaning of Canadian
securities laws. Forward-looking statements are provided for the
purposes of assisting the reader in understanding the REIT's
financial performance, financial position and cash flows as at and
for the periods ended on certain dates and to present information
about management's current expectations and plans relating to the
future. Readers are cautioned that such statements may not be
appropriate for other purposes. Forward-looking information may
relate to future results, performance, achievements, events,
prospects or opportunities for the REIT or the real estate industry
and may include statements regarding the financial position,
business strategy, budgets, projected costs, capital expenditures,
financial results, taxes, plans and objectives of or involving the
REIT. In some cases, forward-looking information can be identified
by such terms as "may", "might", "will", "could", "should",
"would", "expect", "plan", "anticipate", "believe", "intend",
"seek", "aim", "estimate", "target", "goal", "project", "predict",
"forecast", "potential", "continue", "likely", or the negative
thereof or other similar expressions suggesting future outcomes or
events.
Forward-looking statements necessarily involve known and unknown
risks and uncertainties, which may be general or specific and which
give rise to the possibility that expectations, forecasts,
predictions, projections or conclusions will not prove to be
accurate, assumptions may not be correct and objectives, strategic
goals and priorities may not be achieved. A variety of factors,
many of which are beyond the REIT's control, affect the operations,
performance and results of the REIT and its business, and could
cause actual results, including those relating to the suspension
(and potential future reinstatement) of the DRIP and the
establishment of the NCIB (including the potential impact thereof
on Unitholders, as well as the REIT and its ability to advance its
objectives, explore strategic opportunities and deliver long-term
value to its Unitholders), to differ materially from current
expectations of estimated or anticipated events or results. These
factors include, but are not limited to, risks related to the Units
and risks related to the REIT's annual information form for the
year ended December 31, 2022, annual
and management's discussion & analysis at "Risks and
Uncertainties" and the risks discussed in the REIT's materials
filed with Canadian securities regulatory authorities from time to
time on www.sedar.com. The reader is cautioned to consider
these and other factors, uncertainties and potential events
carefully and not to put undue reliance on forward-looking
statements as there can be no assurance actual results will be
consistent with such forward-looking statements.
Forward-looking statements that involve a number of risks and
uncertainties, including statements regarding the outlook for the
REIT's business and results of operations, the ability of the REIT
to manage inflation and rising interest rates, and the changes to
the REIT's business and operations following the coronavirus
pandemic (SARS- CoV-2) ("COVID-19"). Forward-looking
statements involve known and unknown risks and uncertainties, which
may be general or specific and which give rise to the possibility
that expectations, forecasts, predictions, projections or
conclusions will not prove to be accurate, assumptions may not be
correct and objectives, strategic goals and priorities may not be
achieved. A variety of factors, many of which are beyond the REIT's
control, affect the operations, performance and results of the REIT
and its business, and could cause actual results to differ
materially from current expectations of estimated or anticipated
events or results. These factors include, but are not limited to:
risks relating to the suspension of the DRIP and the establishment
of the NCIB (including the potential impact thereof on Unitholders,
as well as the REIT and its ability to advance its objectives,
explore strategic opportunities and deliver long-term value to its
Unitholders); risks and uncertainties related to the Units; risks
related to the REIT and its business; fluctuating mortgage and
interest rates and general economic conditions, including increased
levels of inflation; credit, market, operational and liquidity
risks generally; occupancy levels and defaults, including the
failure to fulfill contractual obligations by tenants; lease
renewals and rental increases; the ability to re-lease and find new
tenants for vacant space; the timing and ability of the REIT to
sell certain properties; the after effects of the COVID-19 pandemic
on the business, operations and financial condition of the REIT and
its tenants, as well as on consumer behavior and the economy in
general, including the ability to enforce leases, perform capital
expenditure work, increase rents, raise capital through the
issuance of Units or other securities of the REIT and obtain
mortgage financing on the REIT's properties. The foregoing is not
an exhaustive list of factors that may affect the REIT's
forward-looking statements. Other risks and uncertainties not
presently known to the REIT could also cause actual results or
events to differ materially from those expressed in its
forward-looking statements. The reader is cautioned to consider
these and other factors, uncertainties and potential events
carefully and not to put undue reliance on forward-looking
statements as there can be no assurance actual results will be
consistent with such forward-looking statements.
Information contained in forward-looking statements is based
upon certain material assumptions applied in drawing a conclusion
or making a forecast or projection, including management's
perception of historical trends, current conditions and expected
future developments, as well as other considerations believed to be
appropriate in the circumstances. There can be no assurance
regarding: (a) the suspension of the DRIP; (b) the establishment of
the NCIB; (c) the after effects of COVID-19 on the REIT's business,
operations and performance, including the performance of its Units;
(d) the REIT's ability to mitigate any impacts related to
fluctuating mortgage and interest rates and inflation; (e) the
factors, risks and uncertainties expressed above in regards to the
post pandemic environment on the commercial real estate industry
and property occupancy levels; (f) credit, market, operational, and
liquidity risks generally; (g) the availability of investment
opportunities for growth in Canada and the timing and ability of
the REIT to sell certain properties; (h) Starlight Group Property
Holdings Inc., or any of its affiliates, continuing as asset
manager of the REIT in accordance with its current asset management
agreement; and (i) other risks inherent to the REIT's business
and/or factors beyond its control which could have a material
adverse effect on the REIT.
The forward-looking statements made in this news release are
dated and relate only to events or information as of the date of
this news release. Except as specifically required by applicable
Canadian law, the REIT undertakes no obligation to update or revise
publicly any forward-looking statements, whether as a result of new
information, future events or otherwise, after the date on which
the statements are made or to reflect the occurrence of
unanticipated events.
SOURCE True North Commercial Real Estate Investment Trust