TORONTO,
May 1, 2013 /CNW/ - Edgefront Realty
Corp. ("Edgefront") (TSXV: ED) announces today that it has
entered into an agreement with Ajax Estates Holdings Ltd. (an
Ontario corporation) dated
April 29, 2013 to purchase a 396,000
square foot portfolio of industrial properties in Ajax, Ontario (the "Ajax Portfolio")
for a purchase price of approximately $29,500,000, to be satisfied by way of cash and
the issuance to Ajax Estates Holdings Ltd. of $5,000,000 of Edgefront shares at a deemed price
of $0.15 per share (or approximately
33,333,333 Edgefront shares). The Ajax Portfolio consists of
multiple multi-tenant industrial properties located in an
industrial park that is 100% occupied with an average remaining
lease term of 7 years.
The purchase price for the Ajax Portfolio will
be satisfied through a combination of cash generated from new
mortgages, the issuance of up to 300,000,000 common shares of
Edgefront by way of private placement at a price of $0.15 per share for aggregate gross proceeds of
up to $45 million and the share
issuance to Ajax Estates Holdings Ltd. as described above. The
acquisition of the Ajax Portfolio and the private placement will
form part of a series of transactions relating to the conversion of
Edgefront into a real estate investment trust having an external
asset management structure. The acquisition of the Ajax Portfolio, private placement and
conversion into a real estate investment trust will be subject to
receipt of all necessary approvals, including those of Edgefront
shareholders, the Ontario Superior Court of Justice (Commercial
List) and the Exchange, and such transactions are expected to close
on or about the end of June.
Edgefront retained CBRE Limited as its
independent appraiser to determine the market value of the Ajax
Portfolio. In its report, the independent appraiser concluded that
the market value of the Ajax
Portfolio as at April 25, 2013 was
$29,900,000 based on various factors
including annual total gross revenue of $3,071,513 (unaudited) for the portfolio.
The acquisition of the Ajax Portfolio is an
Arm's Length Transaction (as that term is defined in TSXV Policy
1.1) and has not yet received TSXV approval. The acquisition
is subject to certain closing conditions, including completion of
satisfactory due diligence, receipt of any necessary regulatory
approval and successful financing. The conversion of Edgefront into
a real estate investment trust will be subject to Multilateral
Instrument 61-101 and Exchange Policy 5.9, and will require the
approval by the affirmative vote of a majority of votes cast by
minority shareholders voting at a special meeting of shareholders
to be held on June 14, 2013.
Edgefront does not expect any new control person to be created as a
result of the private placement.
"Management is enhancing the corporation's
portfolio through property acquisitions in Ontario, thereby expanding and diversifying
its asset base", commented Kelly
Hanczyk, Edgefront's Chief Executive Officer. "These
additional properties strengthen our position as Edgefront moves
forward with its plan to convert the corporation into a diversified
real estate investment trust."
About Edgefront
Edgefront is a growth oriented, diversified real
estate company focused on increasing shareholder value through the
acquisition, ownership and management of commercial real estate
assets initially located in secondary markets. It is the intention
of Edgefront to expand its business of purchasing, owning and
operating real estate assets and to raise funds in the marketplace
in order to convert Edgefront into a real estate investment trust
having an external asset management structure, subject to receipt
of all necessary approvals, including that of the TSXV.
Completion of the acquisition of the Ajax
Portfolio (the "Transaction") remains subject to TSXV
approval. There can be no assurance that the Transaction will
be completed as proposed or at all.
The TSXV has in no way passed upon the merits
of the Transaction and has neither approved nor disapproved the
contents of this press release. Neither the TSXV nor its
Regulation Services Provider (as that term is defined in the
policies of the TSXV) accepts responsibility for the adequacy or
accuracy of this release.
This press release contains forward-looking
information within the meaning of Canadian securities laws.
Such information includes, without limitation, information
regarding the completion of the Transaction. Although
Edgefront believes that such information is reasonable, it can give
no assurance that such expectations will prove to be correct. In
particular, this news release contains forward-looking information
relating to the expected completion of the Transaction and the
business strategies of Edgefront
Forward looking information is typically
identified by words such as: believe, expect, anticipate, intend,
estimate, postulate and similar expressions, or are those, which,
by their nature, refer to future events. Edgefront cautions
investors that any forward-looking information provided by
Edgefront is not a guarantee of future results or performance, and
that actual results may differ materially from those in forward
looking information as a result of various factors, including, but
not limited to: Edgefront's ability to complete the Transaction;
the state of the real estate sector in the event the Transaction
are completed; recent market volatility; Edgefront's ability to
secure the necessary financing or to be fully able to implement its
business strategies and other risks and factors that Edgefront is
unaware of at this time. The reader is referred to
Edgefront's initial public offering Prospectus and Filing Statement
for a more complete discussion of risk factors relating to
Edgefront and their potential effects, copies of which may be
accessed through Edgefront's page on SEDAR at
www.sedar.com.
This news release shall not constitute an offer
to sell or the solicitation of an offer to buy any securities nor
shall there by any sale of securities in any jurisdiction in which
such offer, solicitation or sale would be unlawful.
SOURCE Edgefront Realty Corp.