TSXV:DVO.U
All amounts in $USD.
TORONTO,
May 3, 2016 /CNW/ - Delavaco
Residential Properties Corp. ("Delavaco" or the
"Company") (TSXV: DVO.U) is pleased to report that it has
received both TSX Venture Exchange ("TSXV") and note holder
approval to restructure the 7.5% Senior Secured Notes
("SSN"). Approximately 75% of SSN note holders have agreed
to a revised repayment plan (the "Revised Repayment Plan").
The Revised Repayment Plan reduces the provision to make mandatory
principal repayments of the SSN of no less than $2.5 million to no less than $100,000, as accumulated with repayments being
made on the first of each month.
Currently, the Company has accumulated
approximately $1.8 million of cash in
its escrow accounts as a result of home sales from its South Florida portfolio and is making a
repayment effective May 4, 2016 to
SSN holders. Post repayment, the SSN principal balance will stand
at approximately $13.2 million.
The ability of the Company to pay down debt as
quickly as possible will strengthen the balance sheet and cash flow
going forward. The Company made this request to SSN holders for a
variety of reasons including the fact that warehousing large cash
balances on the balance sheet are dilutive to earnings and cash
flows as they earn no return to investors and requires interest
payments to be made on a higher principal amount of SSN that does
not properly reflect any accumulated escrowed cash balances. By
undertaking the Revised Repayment Plan, the Company anticipates
lowering overall interest payments over the long term which will in
turn conserve cash flow.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING
STATEMENTS: Certain information in this news release constitutes
forward-looking statements under applicable securities law. Any
statements that are contained in this news release that are not
statements of historical fact may be deemed to be forward-looking
statements. Forward-looking statements are often identified by
terms such as "may", "should", "anticipate", "expect", "intend" and
similar expressions. Forward-looking statements in this news
release include, but are not limited to, statements regarding
the arrangements described above with Firm Capital, including
the property management arrangements, the Company's single family
property disposition program and Debt Restructuring, which may not
be completed within the estimated time frames specified above or at
all. In the event that such steps are not completed to the
satisfaction of Firm Capital, the rebranding, Board
restructuring and new business focus described above will likely be
subject to amendment or may not proceed, which could have a
material adverse effect upon the Company. Failure to complete the
steps described above or any delays in their implementation may
have a material adverse affect upon the business of the Company and
its market value. There is no assurance that the Company will be
able to complete the disposition of the single property disposition
portfolio at anticipated values or at all or that market conditions
will support the debt and equity raises contemplated by the
Company. Failure to achieve these objectives will have a material
and adverse effect upon the ability of the Company to complete the
announced terms of the Debt Restructuring. There is no assurance
that the implementation of the steps described above, even if
completed as described above, will increase the market value of the
Company's securities, which is subject to numerous factors beyond
the Company's control.
Forward-looking statements necessarily involve
known and unknown risks, including, without limitation, risks
associated with general economic conditions; adverse factors
affecting the U.S. real estate market generally or those specific
markets in which the Company holds properties; volatility of real
estate prices; inability to complete the Company's single family
property disposition program or Debt Restructuring in a timely
manner; inability to access sufficient capital from internal and
external sources, and/or inability to access sufficient capital on
favourable terms; industry and government regulation; changes in
legislation, income tax and regulatory matters; the ability of
Delavaco to implement its business strategies; competition;
currency and interest rate fluctuations and other risks.
Readers are cautioned that the foregoing list
is not exhaustive. Readers are further cautioned not to place undue
reliance on forward-looking statements as there can be no assurance
that the plans, intentions or expectations upon which they are
placed will occur. Such information, although considered reasonable
by management at the time of preparation, may prove to be incorrect
and actual results may differ materially from those anticipated.
Forward-looking statements contained in this news release are
expressly qualified by this cautionary statement.
Certain financial information presented in
this press release reflect certain non-International Financial
Reporting Standards ("IFRS") financial measures, which include NOI,
FFO and AFFO. These measures are commonly used by real estate
investment companies as useful metrics for measuring performance,
however, they do not have standardized meaning prescribed by IFRS
and are not necessarily comparable to similar measures presented by
other real estate investment companies. Delavaco believes that FFO
and AFFO are important measures of operating performance. The IFRS
measurement most directly comparable to AFFO is net income. These
terms are defined in Delavaco's Management Discussion and Analysis
for the Quarter Ended September 30,
2015 filed on www.sedar.com.
Neither the 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.
Additional information about Delavaco Residential
Properties Corp. is available at www.delavacoproperties.com or
www.sedar.com.
SOURCE Delavaco Residential Properties Corp