"NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR DISSEMINATION IN
THE UNITED STATES"
STELLARTON, NS, Nov. 4, 2013 /CNW/ – Crombie Real Estate Investment
Trust (TSX: CRR.UN) announced today that it has closed its previously
announced acquisition of a portfolio of seventy (70) retail properties
representing approximately 3.0 million square feet of 100% occupied
gross leasable area. The properties were acquired from a wholly-owned
subsidiary of Sobeys Inc. for an aggregate purchase price of $991.3
million, subject to certain customary adjustments, in accordance with
the acquisition agreement announced on July 24, 2013, Unitholder
approval received at a Special Meeting of Unitholders on September 19,
2013 and regulatory approval.
Pursuant to the acquisition agreement, two of the original proposed
properties were excluded from the transaction and replaced by four
other properties, resulting in the final acquisition being adjusted
from 68 properties to 70 properties and from a $990 million purchase
price to a $991.3 million purchase price.
"We are excited to have this important strategic acquisition completed,"
said Donald E. Clow, FCA, President and Chief Executive Officer of
Crombie. "Adding 70 high quality grocery-anchored retail properties,
primarily located in large urban centres in Western Canada, further
demonstrates Crombie's strategy of growth in Canada's top 36 markets
and validates Crombie as a truly national landlord. These assets
provide us with a strong base in this important region of Canada and
are a clear indication of the continued strategic advantage of our
relationship with both Sobeys and Empire."
Crombie funded the acquisition purchase price through the application of
proceeds from various sources:
-
Net proceeds of $213.9 million of Crombie Units issued via a public
offering of Subscription Receipts completed in August, 2013; - $75 million from proceeds of Series E Extendible Convertible Unsecured
Subordinated Debentures issued via a public offering completed in
August, 2013; - $150 million issue of Class B limited partnership units of Crombie
Limited Partnership via private placement to ECL Developments Limited,
a wholly-owned subsidiary of Empire Company Limited completed
contemporaneously with closing; - $547.8 million in bank credit facilities; and
- $4.6 million in other customary adjustments.
The bank credit facilities are expected to receive immediate repayment
of $478.6 million by way of:
-
Net proceeds of Crombie's issue of $175 million of 3.986% Series A Notes
(Senior Unsecured) due October 31, 2018 issued with a provisional
rating of BBB(low) stable trend from DBRS Limited; and -
Fixed rate mortgage proceeds of $304.2 million on mortgages with an
average term of 9.5 years, an average interest rate of 4.31% with 25
year amortizations.
Crombie has mortgage commitments to repay the residual balance on the
bank credit facilities that are expected to close during the fourth
quarter of 2013.
As a result of the completion of the property acquisition, each
outstanding subscription receipt of Crombie has automatically been
exchanged for one Unit of Crombie and a cash distribution-equivalent
payment of CDN $0.14834 (being equal to the aggregate amount of
distributions paid by Crombie per Unit for which record dates have
occurred since the issuance of the subscription receipts), less any
applicable withholding taxes. Trading in the subscription receipts has
been halted on the Toronto Stock Exchange and Crombie expects that the
subscription receipts will be delisted from the Toronto Stock Exchange
after the close of markets today and that the Units issued in exchange
for the subscription receipts will immediately commence trading on the
Toronto Stock Exchange. Crombie further expects that holders of
subscription receipts will receive in the upcoming days the Units and
the distribution equivalent payment to which they are entitled.
An additional $0.07417, representing the amount per Unit of the cash
distribution declared by Crombie with a record date of October 31, 2013
and a payment date of November 15, 2013, will be paid on November 15,
2013 to holders of the subscription receipts as of November 4, 2013.
In addition, the maturity date of the Series E Extendible Convertible
Unsecured Subordinated Debentures has been extended in accordance with
their terms from March 12, 2014 to March 31, 2021.
Further information regarding the acquisition and the exchange of the
subscription receipts is available under Crombie's issuer profile at www.sedar.com.
About Crombie
Crombie Real Estate Investment Trust is an unincorporated, open-ended
real estate investment trust established under, and governed by, the
laws of the Province of Ontario. The trust invests in income-producing
retail, office and mixed-use properties in Canada, with a future growth
strategy focused primarily on the acquisition of retail properties.
Crombie REIT currently owns a portfolio of 250 commercial properties in
all ten provinces, comprising approximately 17.6 million square feet of
gross leasable area. More information about Crombie REIT can be found
at www.crombiereit.com.
This news release may contain forward looking statements that reflect
the current expectations of management of Crombie about Crombie's
future results, performance, achievements, prospects and opportunities.
Wherever possible, words such as "continue", "may", "will", "estimate",
"anticipate", "believe", "expect", "intend" and similar expressions
have been used to identify these forward looking statements. These
statements reflect current beliefs and are based on information
currently available to management of Crombie, and include, without
limitation, statements regarding the expected completion of certain
mortgage financing transactions which remain subject to closing
conditions and market conditions, and the amount and timing of the
repayment of credit facilities which remains subject to completion of
certain mortgage transactions.
Readers are cautioned that such forward-looking statements are subject
to certain risks and uncertainties that could cause actual results to
differ materially from these statements. Crombie can give no assurance
that actual results will be consistent with these forward-looking
statements. A number of factors, including those discussed in the
Management Discussion and Analysis for the year ended December 31, 2012
under "Risk Management", could cause actual results, performance,
achievements, prospects or opportunities to differ materially from the
results discussed or implied in the forward-looking statements. These
factors should be considered carefully and a reader should not place
undue reliance on the forward looking statements. There can be no
assurance that the expectations of management of Crombie will prove to
be correct.
Additional information relating to Crombie can be found on Crombie's web
site at www.crombiereit.com or on the SEDAR web site for Canadian regulatory filings at www.sedar.com.
SOURCE Crombie REIT