Mr. James Britton reports
NORTHERN PROPERTY REAL ESTATE INVESTMENT TRUST/NORSERCO INC. ANNOUNCE $66 MILLION FINANCING
Northern Property Real Estate Investment Trust and NorSerCo Inc. have agreed to sell, on a bought-deal basis, subject to regulatory approval, two million stapled units, each comprising one trust unit and one common share, at a price of $32.85 per stapled unit for aggregate proceeds of approximately $66-million to a syndicate of underwriters led by CIBC, and including BMO Capital Markets, RBC Capital Markets, Scotiabank, Canaccord Genuity Corp., Desjardins Securities Inc., Dundee Securities Ltd., GMP Securities LP, National Bank Financial Inc. and TD Securities Inc. The underwriters have been granted an overallotment option to purchase up to an additional 300,000 stapled units at the same offering price, exercisable up to 30 days after the closing of the offering.
On or before March 6, 2012, NPR will file with the securities regulators in each of the provinces and territories of Canada a preliminary short-form prospectus to qualify the issuance of the stapled units. It is anticipated that a final prospectus will be filed on March 16, 2012. Closing of the offering is expected to take place on or about March 23, 2012. The net proceeds from the sale of the stapled units will be used for future acquisitions and developments, for debt repayment, and for general trust purposes.
The first cash distribution to which purchasers of the stapled units under this offering will be entitled to receive will be for the month of March, with a record date of March 30, 2012, and a payment date of April 16, 2012. NPR's current monthly cash distribution is 12.75 cents per stapled unit.
Seniors' properties strategic review update
In July, 2011, NPR announced that it was undertaking a strategic review of its master leased seniors' facilities in Western Canada and in Newfoundland. The strategic review is considering a broad range of alternatives for these facilities for the benefit of Northern Property REIT, NorSerCo and stapled unitholders.
NPR is actively engaged in negotiations for the sale of its 10 seniors' properties in Newfoundland to the enterprises that operate the facilities. Management has reached agreement on sale prices for most of the Newfoundland properties, subject to the operators obtaining suitable financing and meeting certain conditions required by NPR. NPR is also continuing its strategic review of its master leased seniors' facilities in Western Canada.
There can be no assurance as to the conclusions that will be reached through this strategic review process or whether the strategic review will result in any change in the ownership or status of any of NPR's seniors' facilities.
As part of NPR's fourth-quarter earnings release, which is scheduled for March 13, 2012, NPR's seniors' properties business segment will be classified as discontinued operations. The assets related to this business segment account for approximately 18 per cent of NPR's funds from operations and approximately 15 per cent of NPR's total asset base.
We seek Safe Harbor.