VANCOUVER, Oct. 9, 2018 /CNW/ - Parkit Enterprise Inc.
("Parkit" or the "Company") (TSXV: PKT; OTCQX: PKTEF)
announces that its previously disclosed (see press release dated
October 4, 2018) sale of one of the
single purpose entities held by OP Holdings JV LLC (the "Joint
Venture") (a joint venture in which Parkit has an equity interest)
has closed. The single purpose entity owned the Expresso
Airport Parking property and was acquired by the Joint Venture in
2015 (consisting of an equity investment of US $7 million), and was sold for approximately US
$36.1 million. When including
the income received from the property over the period of the
investment, the sale should represent an estimated levered IRR of
approximately 42% to the Joint Venture.
The sale will contribute to paying down the bulk of the 15% IRR
hurdle owed to the majority member of the Joint Venture. As a
result, the Company expects that the sale will accelerate the cash
flows that the Company receives from the Joint Venture. As
per the Joint Venture agreement, once the 15% IRR hurdle is repaid
to the majority member, all cash flows from refinancing and asset
sales are to be directed towards the PAV Member, a company co-owned
by Parkit, until the PAV Member has received a 15% IRR. The
company will not receive any of the proceeds from the sale of
Expresso. For further information on the Company's interest
in the Joint Venture please see the Company's financial statements
and related management's discussion and analysis for the year ended
October 31, 2017 and the six month
period ended July 31, 2018 available
under the Company's profile on www.sedar.com.
The sale was an arm's length transaction and did not involve any
related parties as such term is defined in Multilateral Instrument
61-101 or TSX Venture Exchange policies. The Company treated
the transaction as an exempt transaction for the purposes of TSX
Venture Exchange policies.
About PARKIT
Parkit Enterprise Inc. is engaged in the acquisition,
optimization and asset management of income producing parking
facilities across the United
States. The Company's shares are listed on TSX-V (Symbol:
PKT) and on the OTCQX (Symbol: PKTEF).
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
Certain statements in this release are forward-looking
statements. Forward-looking statements consist of statements that
are not purely historical, including any statements regarding
beliefs, plans, expectations or intentions regarding the
future. Such statements are subject to risks and
uncertainties that may cause actual results, performance or
developments to differ materially from those contained in the
statements. No assurance can be given that any of the events
anticipated by the forward-looking statements will occur or, if
they do occur, what benefits the Company will obtain from them, if
any.
NON-GAAP FINANCIAL MEASURES
This release contains a non-GAAP financial measure. The
definition and calculation of this non-GAAP financial measure may
differ from the definitions and methodologies used by other
companies and, accordingly, may not be comparable. The non-GAAP
financial measure referred to below should not be considered an
alternative to net income as an indication of our performance. In
addition, this non-GAAP financial measure does not represent cash
generated from operating activities in accordance with GAAP and
therefore should not be considered as an alternative measure of
liquidity or as indicative of cash available to fund cash
needs.
Levered Internal Rate of Return ("IRR") is calculated as the
internal rate of return on the Joint Venture's equity investment in
the property considering the timing and amounts of capital
contributions paid, and all distributions received.
Management believes that the levered IRR achieved during the
period a property is owned by the Joint Venture is useful because
it is one indication of the gross value created by the Joint
Venture's acquisition, management and ultimate sale of a property,
before the impact of Joint Venture's overhead and taxes. However,
leveraged IRR is not a substitute for net income as a measure of
our performance.
The levered IRR achieved on the property as cited in this
release should not be viewed as an indication of the gross value
created with respect to other properties owned by the Joint
Venture, and the Company does not represent that the Joint Venture
will achieve similar levered IRRs upon the disposition of other
properties. The levered IRR cited in this press release is
from the perspective of the Joint Venture, in which the Company has
an economic interest.
Under GAAP, the Company recognizes its investment in the Joint
Venture using the equity method whereby the carrying value of the
investment is adjusted for the Company's share of the profit and
loss of the Joint Venture, and decreased for any distributions
received by the Joint Venture. All amounts reported by the
Company from the Joint Venture are translated into Canadian
dollars. The gain on the disposition of the property will
have an impact on the amount reported by the Company for its share
of the GAAP net profit from the Joint Venture.
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SOURCE Parkit Enterprise Inc.