/NOT FOR DISTRIBUTION IN THE UNITED STATES OR OVER UNITED STATES WIRE SERVICES/
TORONTO, Dec. 10, 2019 /CNW/ - (TSX-V:ERE.UN) – European
Residential Real Estate Investment Trust ("ERES") announced today
that due to strong demand, the size of its previously announced
bought deal equity offering in connection with which it entered
into an agreement to sell trust units to a syndicate of
underwriters led by RBC Capital Markets has increased to 26,883,000
trust units at a price of C$4.65 per
trust unit for gross proceeds of approximately C$125 million (the "Offering"). ERES has
granted the underwriters an over-allotment option (the
"Over-Allotment Option"), exercisable in whole or in part up to 30
days after closing of the Offering, to purchase up to an additional
4,032,400 trust units to cover over-allotments, if any. If the
Over-Allotment Option is exercised in full, the gross proceeds
would increase to approximately C$144
million.
ERES will, within the next few days, file with the securities
commissions and other similar regulatory authorities in each of the
provinces and territories of Canada, a prospectus supplement to its short
form base shelf prospectus dated August 19,
2019 (the "Base Shelf Prospectus") relating to the issuance
of the trust units. Closing of the Offering is expected to occur on
or about December 18, 2019.
ERES intends to use the anticipated €82 million of net proceeds
of the Offering:
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i.
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to repay €50 million
to be drawn on the previously announced new one-year €50 million
credit facility that ERES has entered into with two Canadian
chartered banks (the "New Credit Facility"), to finance the
previously announced acquisition of a Netherlands property for
approximately €105 million (excluding transaction costs and other
adjustments) (the "Kameleon Property"), expected to close on
December 16, 2019;
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ii.
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to repay €23 million
drawn on ERES' existing credit facility (including €20 million to
be drawn to finance the acquisition of the Kameleon
Property);
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iii.
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to repay €9 million
of the €37 million promissory note to be issued to CAPREIT (the
"CAPREIT Promissory Note") to finance the acquisition of the
Kameleon Property; and
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iv.
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the remainder, if
any, to finance future acquisitions, to repay indebtedness, for
revenue-enhancing capital expenditures, and for general trust
purposes.
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The proceeds of the Over-Allotment Option, if any, are expected
to be used to finance future acquisitions, to repay indebtedness,
for revenue-enhancing capital expenditures, and for general trust
purposes.
The Kameleon Property, the New Credit Facility, and the CAPREIT
Promissory Note are described in more detail in ERES' press release
dated December 9, 2019.
As a part of the Offering, CAPREIT has agreed to purchase
5,377,000 of the trust units being offered, representing
approximately C$25 million.
CAPREIT currently holds a 74% effective interest in ERES through
ownership of trust units and Class B LP units (assuming all the
Class B LP units are converted into trust units). After the
Offering closes, CAPREIT expects its effective ownership interest
to be approximately 67%.
Copies of the prospectus supplement, following filing thereof,
and accompanying Base Shelf Prospectus may be obtained on SEDAR at
www.sedar.com. The Base Shelf Prospectus contains, and the
prospectus supplement will contain, important detailed information
about ERES and the Offering. Prospective investors should read the
prospectus supplement and accompanying Base Shelf Prospectus and
the other documents ERES has filed before making an investment
decision.
ERES intends to make monthly cash distributions to unitholders
of record on each record date, on or about the 15th day of the
month following the record date. ERES' current monthly cash
distribution is €0.00875 per unit (€0.105 annually). The first cash
distribution to which purchasers of the trust units under this
Offering will be entitled to participate will be for the month of
December 2019, with a record date of
December 31, 2019 and a payment date
of January 15, 2020.
The euro-denominated monthly cash distribution will be paid in
Canadian dollars based on the exchange rate on the date of payment.
Registered unitholders will be provided with an option to elect to
receive such distribution in euros rather than Canadian dollars. If
no such election is made, registered unitholders will be paid the
distribution in Canadian dollars based on the above exchange rate
mechanism. Beneficial unitholders will not have an option to elect
to receive the distribution in euros.
This press release shall not constitute an offer to sell, or the
solicitation of an offer to buy, any securities in any jurisdiction
in which such offer, solicitation or sale would be unlawful. The
securities being offered have not been and will not be registered
under the U.S. Securities Act of 1933 as amended and may not be
offered or sold in the United
States absent registration or pursuant to applicable
exemption from registration.
ABOUT ERES
ERES is an unincorporated, open-ended real estate investment
trust. ERES' Units are listed on the TSX-V under the symbol ERE.UN.
ERES is Canada's only
European-focused multi-residential REIT, with an initial focus
on investing in high-quality multi-residential real estate
properties in the Netherlands.
ERES currently owns a portfolio of 131 multi-residential
properties, comprised of 5,410 suites located in the Netherlands, and owns two office
properties in Germany and one
office property in Belgium.
ERES' registered and principal business office is located at 11
Church Street, Suite 401, Toronto,
Ontario M5E 1W1.
For more information, please visit our website at
www.eresreit.com.
ABOUT CAPREIT
CAPREIT is a growth-oriented investment trust managing 64,028
suites and sites across Canada,
the Netherlands and Ireland. It owns interests directly in
Canada and indirectly in
the Netherlands through its
investment in ERES a total of 60,362 residential units, comprising
48,687 residential suites and 72 manufactured home communities
comprising 11,675 sites, all located in and near major urban
centres. For more information about CAPREIT, its business and its
investment highlights, please refer to our website at
www.caprent.com or www.capreit.net, and our public disclosure which
can be found under our profile at www.sedar.com.
CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING
STATEMENTS
Certain statements contained in this press release constitute
forward-looking statements within the meaning of applicable
Canadian securities laws which reflect ERES' current expectations
and projections about future results, including but not limited to:
the completion of the acquisition of the Kameleon Property (the
"Kameleon Property Acquisition") on the terms described herein, the
anticipated closing date of the Kameleon Property Acquisition, the
filing of the prospectus supplement relating to the issuance of the
units within the time frame described herein, the intended use of
the proceeds from the Offering by ERES, including proceeds acquired
from exercise of the over-allotment option, and the purchase of
5,377,000 trust units by CAPREIT pursuant to the Offering and
its effective ownership interest upon closing of the Offering.
Forward-looking statements generally can be identified by the use
of forward-looking terminology such as "outlook", "objective",
"may", "will", "expect", "intent", "estimate", "anticipate",
"believe", "consider", "should", "plans", "predict", "estimate",
"forward", "potential", "could", "likely", "approximately",
"scheduled", "forecast", "variation" or "continue", or similar
expressions suggesting future outcomes or events.
The forward-looking statements made in this press release relate
only to events or information as of the date on which the
statements are made in this press release. Actual results and
developments are likely to differ, and may differ materially, from
those expressed or implied by the forward-looking statements
contained in this press release. Such forward-looking statements
are based on a number of assumptions that may prove to be
incorrect.
Except as specifically required by applicable Canadian
securities law, ERES does not undertake any 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. These forward-looking statements should not
be relied upon as representing ERES' views as of any date
subsequent to the date of this press release. There can be no
assurance that forward-looking statements will prove to be
accurate, as actual results and future events could differ
materially from those anticipated in such statements. Accordingly,
readers should not place undue reliance on forward-looking
statements.
The Offering and the Kameleon Property Acquisition are subject
to a number of conditions. There can be no assurance that the
Offering or the Kameleon Property Acquisition will be completed as
proposed or at all.
Investors are cautioned that, except as disclosed in the
prospectus supplement or the Base Shelf Prospectus, any information
released or received with respect to the Offering or the Kameleon
Property Acquisition may not be accurate or complete and should not
be relied upon.
Neither the TSX-V nor its Regulation Services Provider (as that
term is defined in the policies of the TSX-V) have in no way passed
upon the merits of the Kameleon Property Acquisition or the
Offering and have neither approved nor disapproved the contents of
this news release.
SOURCE European Residential Real Estate Investment Trust