/NOT FOR DISTRIBUTION TO U.S. NEWSWIRE
SERVICES OR FOR RELEASE OR DISSEMINATION DIRECTLY, OR INDIRECTLY,
IN WHOLE OR IN PART, IN OR INTO THE
UNITED STATES/
TSXV:FCA.U
TORONTO, Nov. 14, 2016 /CNW/ - November 14, 2016:
Firm Capital American Realty Partners Corp. (the "Company") (TSXV:
FCA.U) is pleased to announce that it is launching a $10 million rights offering to all existing
shareholders of the Company (the "Rights Offering") and has
agreed to invest up to $7.5 million
in a joint venture in New York
City.
The Company will be offering rights (the "Rights") to
holders of its common shares as at the close of business on the
record date of November 18, 2016 (the
"Record Date"), on the basis of one Right for each common
share held. Each Right will entitle the holder to subscribe for one
common share of the Company (the "Rights Shares") upon
payment of the subscription price of US$0.16 per Rights Share. The Company has applied
to the TSX Venture Exchange (the "TSXV") for a waiver of the
listing requirement under a Rights Offering, as it is not intended
that the Rights be listed and posted for trading on the TSXV.
The Rights will expire at 5:00
p.m. (Toronto time) on
December 14, 2016 (the "Expiry
Time"), after which time unexercised Rights will be void and of
no value. Shareholders who fully exercise their Rights will be
entitled to subscribe for additional Rights Shares, if available as
a result of unexercised Rights prior to the Expiry Time, subject to
certain limitations as set out in the Company's rights offering
circular (the "Circular").
Further details of the Rights Offering are set out in the rights
offering notice (the "Notice") and Circular which will be
available under the Company's profile on SEDAR at www.sedar.com.
The Notice and an accompanying rights certificate will be mailed to
each shareholder of the Company resident in Canada as at the Record Date. Registered
shareholders who wish to exercise their Rights must forward the
completed rights certificate, together with the applicable funds,
to the rights agent, TSX Trust Company, on or before the Expiry
Time. Shareholders who own their common shares through an
intermediary, such as a bank, trust company, securities dealer or
broker, will receive materials and instructions from their
intermediary. Shareholders resident in a jurisdiction outside of
Canada (the "Ineligible
Holders") will receive a letter from the Company describing the
procedures to be followed by such Ineligible Holders if they wish
to participate in the Rights Offering.
There are currently 62,933,860 common shares of the Company
outstanding. If all of the Rights issued under the Rights Offering
are validly exercised (or if only a portion of the Rights are
validly exercised and the Stand-by Commitment (as defined below) is
fulfilled), the Rights Offering will raise gross proceeds of
approximately US$10,000,000. The
Company intends to use the net proceeds of the Rights Offering, in
part, to fund the joint venture investment as outlined below and
for general working capital.
In connection with the Rights Offering, and as more particularly
described in the Circular, the Company has entered into a stand-by
commitment agreement (the "Stand-by Agreement") with
stand-by purchasers, including certain insiders of the Company
(collectively, the "Stand-by Purchasers"). The Stand-by
Purchasers have agreed to exercise their basic and additional
subscription right in full, as applicable, and to purchase all
Rights Shares not otherwise acquired under the Rights Offering by
holders of Rights pursuant to the basic subscription right and
additional subscription privilege, up to a maximum stand-by
commitment of approximately US$3,050,000 (the "Stand-by Commitment").
As of the date hereof, the Stand-by Purchasers collectively own
approximately 27% of the issued and outstanding common shares of
the Company. If the Stand-by Commitment is fulfilled and certain
insiders of the Company exercise their basic subscription privilege
under the Rights Offering, the Stand-by Purchasers will
collectively own up to approximately 42% of the issued and
outstanding common shares of the Company following the Rights
Offering. There is no fee payable by the Company to the Stand-by
Purchasers in respect of the Stand-by Commitment.
In addition, the Company has agreed to invest in a joint venture
that will consist of eight multi-family buildings (the
"Portfolio") comprised of 127 residential units and two
commercial units located in New York
City with a strong local partner. The Portfolio is currently
91% occupied and presents significant repositioning and value
enhancement opportunities. The Company will be investing in a
combination of equity and mezzanine debt that are expected to yield
8% per annum. The Company's expected pro-rata share of the joint
venture investment is approximately $7.5
million and will be funded from the net proceeds received
from the Rights Offering. Closing of the joint venture investment
is expected to occur during the fourth quarter of 2016.
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 Company's
intention to complete the Rights Offering; the Company's intention
to undertake a partially backstopped Rights Offering; the terms of
the Rights Offering; the terms of the Stand-by Agreement and the
Stand-by Commitment; the intended use of proceeds of the Rights
Offering; and the Company's intention to complete the joint venture
investment.
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;
uncertainties as to whether the Rights Offering will be completed;
delays in obtaining the approval of various regulators and the
TSXV; the ability of the Stand-by Purchasers to terminate the
Stand-by Agreement in certain circumstances; the costs to
completion of the Rights Offering; 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 the Company to implement its
business strategies; competition; currency and interest rate
fluctuations and other risks, including those described in the
Company's public disclosure documents on SEDAR at
www.sedar.com.
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.
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 the Company is available at
www.firmcapital.com or www.sedar.com.
SOURCE Firm Capital American Realty Partners Corp.