WINNIPEG, MB, Oct. 26,
2023 /CNW/ - Lanesborough Real Estate Investment
Trust ("LREIT") (TSXV: LRT.UN) announces today that it has
entered into an asset purchase agreement (the "Agreement")
in connection with the sale of Nelson Ridge Estates, 101 Loutit
Road, Fort McMurray, Alberta (the
"Property") to 7254751 Manitoba Ltd. ("725") for
aggregate consideration of $22,000,000, payable as follows: (i) a
$20,000 cash deposit payable to LREIT
within 3 business days of the effective date of the Agreement; (ii)
$14,593,259.05 through the assumption
of the first mortgage on the Property by 725; (iii) $7,615,564.57 through the assumption of the
second mortgage on the Property by 725; (iv) an increase in the
line of credit from 2668921 Manitoba Ltd., a sister company of 725,
to LREIT by $228,823.62; and (v) the
balance of the purchase price payable in cash on
closing (collectively, the "Transaction").
725 is a company controlled by Arni
Thorsteinson, an insider of LREIT. Accordingly, the
Transaction is a "Related Party Transaction" under Multilateral
Instrument 61-101 – Protection of Minority Security Holders in
Special Transactions ("MI 61-101").
As LREIT is not listed on the Toronto Stock Exchange, in
accordance with Section 5.5(b) of MI 61-101, the Transaction is
exempt from the formal valuation requirements of MI 61-101. As
LREIT is experiencing financial hardship, as defined in Section
5.5(g) of MI 61-101, LREIT is also exempt from the requirement to
obtain approval of a majority of the minority unitholders of LREIT
for the Transaction.
It is anticipated that the Transaction will close on or about
May 1, 2024.
Pursuant to the terms of the Agreement and the policies of
the TSX Venture Exchange (the "Exchange"), the closing
of the Transaction is subject to the condition that 725 arrange new
and restructed mortgage financing for its acquisition of the
Property on terms satisfactory to 725 and the final approval of the
Exchange.
ABOUT LREIT
LREIT is a real estate investment trust, which is listed on the
TSX Venture Exchange under the symbol LRT.UN (Trust Units). For
further information on LREIT, please visit our website at
www.lreit.com.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as the term is defined in the policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release.
Certain statements contained in this press release are
"forward-looking statements" that reflect the expectations of
management regarding the Transaction. Readers are cautioned not to
place undue reliance on forward-looking information. All statements
other than statements of historical fact contained herein are
forward-looking statements. Forward looking statements are often,
but not always, identified by the use of words such as "seek",
"anticipate", "plan", "continue", "estimate", "expect", "may",
"will", "project", "predict", "potential", "targeting", "intend",
"could", "might", "should", "believe" and similar expressions. Such
forward-looking statements reflect management's current beliefs and
are based on information currently available to management.
Forward looking statements involve significant risks and
uncertainties. A number of factors that could cause actual results
to differ materially from the results discussed in forward-looking
statements are discussed in LREIT's management discussion and
analysis for the six-month period ended June
30, 2023 available on SEDAR at www.sedar.com. Although the
forward-looking statements contained herein are based upon what
management believes to be reasonable assumptions, LREIT cannot
assure investors that actual results will be consistent with these
forward-looking statements.
The forward-looking statements contained herein are expressly
qualified in their entirety by this cautionary statement.
Forward-looking statements are made as of the date hereof, or such
other date specified in such statements, and neither LREIT nor any
other person assumes any obligation to update or revise such
forward-looking statements to reflect new information, events or
circumstances, except as expressly required by applicable
securities law.
SOURCE Lanesborough Real Estate Investment Trust