TG Residential to Acquire Residential Property in Manitoba as
Qualifying Transaction
VANCOUVER,
Feb. 4, 2013 /PRNewswire/ - TG
Residential Value Property Ltd. (TSXV: TG.P) (the
"Company"), a Vancouver-based Capital Pool Company listed on
the TSX Venture Exchange (the "Exchange"), is pleased to
announce that it has entered into a purchase and sale agreement to
acquire a residential and commercial real estate property located
in Winnipeg, Manitoba (the
"Property") from Taurean Latitude 1 Multifamily LP (the
"Vendor").
The purchase of the Property, if completed, will
constitute the Company's "Qualifying Transaction" under the
policies of the Exchange. The acquisition (the
"Acquisition") of the Property as the Company's Qualifying
Transaction is subject to approval of the Exchange (the
"Exchange Approval"), which approval is evidenced by the
publication of the Exchange bulletin (the "Exchange
Bulletin") announcing such approval. The purchase of the
Property is an arm's length transaction and, in accordance with
Exchange policies, will not be subject to shareholder approval.
Acquisition of Property
Under the agreed upon terms of the
Acquisition, the Company will purchase the Property from the
Vendor.
The Company has paid a non-refundable deposit of
$25,000 and a refundable deposit of
$125,000 to the Vendor.
The purchase price to be paid to the Vendor for the
Property shall be as follows:
- the $150,000 in deposits already
advanced to the Vendor;
- $2,773,000 in cash, subject to
customary adjustments at closing;
- new mortgage financing in the amount of $10,500,000 on the Property;
- a second mortgage back to the Vendor in the amount of
$1,500,000 with a term of one year
bearing an annual interest rate of 8%;
- 2,750,000 units of the Company comprising 2,750,000 common
shares of the Company and 2,750,000 warrants of the Company, each
warrant grants the holder the right to purchase one common share of
the Company at a price of $0.30 per
share for a period of 36 months after closing of the Acquisition,
which warrants will be subject to the provisions of the
Acceleration Right set out below;
for a total consideration of $15,473,000.
The purchase price for Property is based on the
appraised value of the Property in a current independent
appraisal.
The portion of the purchase price to be paid in
cash will be funded through the Company's current working capital
and the proceeds of the brokered private placement described
below.
The Company's obligation to complete the purchase
of the Property is subject to the Company receiving Exchange
Approval of the Acquisition.
About the Property
The Property is a newly renovated former commercial
building consisting of six storeys. The building currently consists
of retail commercial space on the first floor and basement levels
and five storeys of apartment units above the commercial space. The
civic address of the Property is 100 Princess Street, Winnipeg, Manitoba.
The commercial floor space is presently 100%
occupied and the residential units are 60% rented by unit count.
Once the residential units are completely leased it is anticipated
that the aggregate monthly rent from the retail commercial space
and the residential units will be well in excess of $120,000 per month.
The Vendor
The Vendor is a limited partnership, the general
partner of which is Taurean Latitude I GP Inc., an Alberta company controlled by Ashish Garg. The Vendor owns 100% of the
Property.
Private Placement
The Company has appointed MGI Securities Inc.
("MGI") as its exclusive agent for a brokered private
placement using the "Accredited Investor" and "Offering Memorandum"
prospectus exemptions, where applicable in the following proposed
jurisdictions: British Columbia,
Alberta, Saskatchewan, Manitoba, Ontario, Nova
Scotia and Newfoundland and
such other jurisdictions as the Company and MGI may agree, on the
terms set out below (the "Financing").
The terms of the Financing are as follows:
- A minimum of 20,000,000 and a maximum of 45,000,000
subscription receipts (the "Subscription Receipts")
at a price of $0.20 per Subscription
Receipt, where each Subscription Receipt will be automatically
exchanged for one (1) unit (each a "Unit") in the capital of the
Company upon completion of the Qualifying Transaction (the
"Closing"), which will be evidenced by the publication of the
Exchange Bulletin.
- Each Unit to be comprised of one common share of the Company (a
"Unit Share") and one common share purchase warrant
(each such whole warrant, a "Warrant").
- Each Warrant will entitle its holder to purchase one common
share of the Company at an exercise price of $0.30 for a period of 36 months from the date of
Closing.
- The Warrants will be subject to an accelerated expiry date if
the Company's common shares trade at $0.40 or higher for a period of 20 consecutive
trading days after the date that is 12 months after the date of
Closing (the "Acceleration Right").
- The Company will pay MGI a cash commission of up to 8% of the
aggregate proceeds raised under the Financing and issue MGI
compensation options (the "Agent's Compensation
Options") to purchase that number of units (the
"Agent's Units") as is equal to up to 8% of the
aggregate number of Units issued pursuant to the Financing, each
Agent's Compensation Option being exercisable at an exercise price
of $0.20 per Agent's Unit for a
period of 36 months from date of Closing. Each Agent's Unit will be
comprised of one common share of the Company and one common share
purchase warrant of the Company (an "Agent's
Warrant"), where each Agent's Warrant is exercisable into
one common share of the Company at an exercise price of
$0.30 for a period of 36 months from
the date of Closing.
- The proceeds of the sale of the Subscription Receipts will be
held in escrow (the "Escrowed Proceeds") pending
publication of the Exchange Bulletin. Upon publication of the
Exchange Bulletin, the Escrowed Proceeds will be released to the
Company. Upon receipt of the Escrowed Proceeds, the Subscription
Receipts will be automatically exchanged into the underlying Unit
Shares and Warrants. Proceeds of the Financing will be used to fund
the Acquisition, cover the costs of the Financing and for general
working capital purposes.
The Company plans to rely on an exemption from the Exchange
requirement to engage a Sponsor for its Qualifying Transaction.
The Resulting Issuer
On closing of the Acquisition and the Financing, the Company
will be classified as a real estate issuer and, assuming completion
of the maximum Financing, will have 56,750,000 common shares,
47,750,000 Warrants, 500,000 agent's options (issued in connection
with its IPO) and 3,600,000 Agent's Compensation Options (as such
options are more fully described above) outstanding. A total of
900,000 incentive stock options will also be outstanding. After
completion of the Qualifying Transaction, the Company plans to
focus on acquiring and holding residential multifamily apartment
buildings.
The Company expects that there will be no change to the insiders
of the Company upon completion of the Acquisition and that the
directors and officers of the Company will remain as follows:
Douglas Thiessen, President,
CEO and Director
In 2004, Mr. Thiessen joined Prestigious Properties Group, a
real estate holding company, initially as a consultant and then as
General Manager. He is now the CEO of Taurean Global Properties,
which acts as General Partner for three Limited Partnerships that
hold apartment properties in Canada as well as various agricultural lands
located in Argentina.
William Byers, Chief Financial
Officer, Corporate Secretary and Director
Mr. Byers is a business executive and private real estate
investor. He is currently the CFO of TitanStar Properties Inc., a
real estate company listed on the Exchange and the CFO and a
director of Victory Ventures Inc., a junior mining exploration
company listed on the Exchange.
Richard Turner,
Director
Since 1995, Mr. Turner has been president and chief executive
officer of TitanStar Investment Group Inc., a private equity
business. He served as chair and a director of the British Columbia
Lottery Corporation from 2001 to 2005. Mr. Turner is currently the
President, CEO and a director of TitanStar Properties Inc., a real
estate company listed on the Exchange.
Graham McLennan, Q.C.,
Director
Mr. McLennan is a senior
partner with McLennan Ross LLP. He has extensive experience in
civil and commercial litigation, class action proceedings,
construction disputes and defamation matters. He has appeared in
all levels of court in Alberta and
the Northwest Territories as well
as the Federal Court and the Supreme Court of Canada. In 2008 he was appointed Queen's
Counsel.
General
Completion of the transaction is subject to a number of
conditions, including but not limited to, Exchange acceptance.
There can be no assurance that the transaction will be completed as
proposed or at all.
Investors are cautioned that, except as disclosed in the filing
statement to be prepared in connection with the transaction, any
information released or received with respect to the transaction
may not be accurate or complete and should not be relied upon.
Trading in the securities of a capital pool company should be
considered highly speculative.
The TSX Venture Exchange Inc. has in no way passed upon the
merits of the proposed transaction and has neither approved nor
disapproved the contents of this press release.
Trading in the Company's common shares on the Exchange will be
halted pending completion of the Qualifying Transaction.
ON BEHALF OF TG RESIDENTIAL VALUE PROPERTIES
INC.
"Douglas Thiessen"
Douglas
Thiessen
President, Chief Executive Officer and Director
THE TSX VENTURE EXCHANGE DOES NOT ACCEPT RESPONSIBILITY FOR
THE ADEQUACY OR ACCURACY OF THIS RELEASE.
This press release includes "forward-looking
information" within the meaning of applicable Canadian securities
laws, including information regarding the Acquisition, the
Financing and the Company's business upon completion of the
Qualifying Transaction. Users of forward-looking information are
cautioned that actual results may vary from the forward-looking
information disclosed in this press release. The material risk
factors that could cause actual results to differ materially from
the forward-looking information contained in this press release
include, risks related to Exchange approval of the Qualifying
Transaction, the risk of not obtaining mortgage financing for the
Acquisition, the risk that there are not sufficient subscriptions
for the Financing, and all of the other risks and uncertainties
normally associated with the acquisition of residential real estate
and the completion of a Qualifying Transaction. The forward-looking
information contained in this press release represents management's
best judgment of future events based on information currently
available. The material assumptions used to develop the
forward-looking information include: that Exchange approval of the
Qualifying Transaction will be obtained, that mortgage financing
will be obtained, that the Financing will be completed and that the
Acquisition will not be affected by an unforeseen events. The
Company does not assume the obligation to update any
forward-looking information, except as required by applicable
law.
SOURCE TG Residential Value Property Ltd.