All amounts are in US dollars unless otherwise
stated
TORONTO, Aug. 3, 2017 /CNW/ - Firm Capital American Realty
Partners Corp. (the "Company"), (TSXV: FCA.U/FCA) is pleased
to announce the following accretive corporate transactions intended
to strengthen the Company's balance sheet and future earnings
potential:
FULL REPAYMENT OF THE SENIOR SECURED NOTES ("SSN")
Through a combination of existing cash resources and single family
home sales, the Company has fully repaid the $25 million, 7.5% SSN well before the
December 31, 2017 maturity date.
COMMENCEMENT OF CONVERTIBLE UNSECURED DEBENTURE
REPAYMENTS
As a result of the final SSN repayment, the
Company will commence repayment of the $17.3
million, 7.0% Convertible Unsecured Debentures (the
"Debentures") from ongoing home sales.
DISPOSITION OF FLORIDA
MINI-MULTI PORTFOLIO FOR A 14% IFRS PREMIUM
The Company has
entered into three conditional all cash purchase and sale
agreements with one unrelated third party to dispose of its entire
Florida mini-multi portfolio for
gross cash proceeds (before transaction costs) of approximately
$4.2 million. The disposition price
represents a 14% premium over the IFRS value of approximately
$3.7 million, as reported on the
Company's financial statements on March 31,
2017. The Company anticipates closing the transactions
during the third quarter of 2017. Net cash proceeds generated from
the transactions will be used for repayment of the Debentures. The
dispositions are conditional on a number of factors including, but
not limited to, due diligence. The Company provides no guarantee
that these transactions will close.
$1.3 MILLION IN NEW JERSEY PROMISSORY NOTE ("NJPN")
REPAYMENTS
Since March 31,
2017, the Company has also repaid approximately $1.3 million of NJPN. The NJPN had an original
principal balance of approximately $3.1
million and now stands at approximately $1.1 million. The repayment of the NJPN will
generate approximately $0.07 million
in annual interest expense savings for the Company. Based on
conditional in-place home sales, the Company should be able to
generate significant net proceeds to fully repay the NJPN.
$2.8 MILLION IN CONDITIONAL
SINGLE FAMILY HOME SALES
The Company has under contract for sale 19 single family properties
comprised of 49 units for gross proceeds of approximately
$2.8 million. These home sales are
anticipated to close during the third quarter of 2017 and the net
proceeds generated will be used for repayments of the Debentures
and NJPN.
SINGLE FAMILY HOME INVENTORY HELD FOR SALE UPDATE
Beyond the conditional home sales as outlined above, the Company
currently has 78 properties not sold, comprised of 12 single family
homes available for sale in Florida, 14 properties comprised of 67 units
available for sale in New Jersey
and 52 single family homes available for sale in Atlanta. With the exception of a 120 single
family home rental portfolio located in Atlanta subject to a $4.0 million first mortgage (as further discussed
below), all of the remaining single family homes are currently
listed for sale with various agents.
120 ATLANTA SINGLE FAMILY
HOME UPDATE
The Company also owns a portfolio of 120 single
family homes located in Atlanta
that are subject to a $4 million
first mortgage due July 1, 2019. The
Company is actively leasing this portfolio with a view to disposing
as one entire portfolio once fully stabilized due to the blanket
first mortgage. A buyer of these 120 single family homes will have
to assume the first mortgage as the Company wants to avoid
discharge penalties, failing which the first mortgage will be held
until maturity. As of today, 99 of the homes in this portfolio are
currently occupied representing an 82.5% occupancy, which is a
significant improvement over the 45% occupancy this portfolio had
as at December 31, 2016.
ABOUT FIRM CAPITAL AMERICAN REALTY PARTNERS CORP.
Firm Capital American Realty Partners Corp. is a U.S. focused real
estate investment entity that pursues real estate and debt
investments through the following platforms:
- Income Producing Real Estate Investments: Acquiring
income producing real estate assets in major cities across
the United States. Acquisitions
are completed solely by the Company or in joint-venture partnership
with local industry expert partners who retain property management
responsibilities; and
- Mortgage Debt Investments: Real estate debt and equity
lending platform in major cities across the United States, focused on providing all
forms of bridge mortgage loans and joint venture capital.
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 with respect to
the Company's intention to complete the sale of its single-family
homes and ultimate debt repayments, potential capital financing and
growth opportunities, as well as the Company's intention to acquire
income producing U.S. real estate assets and complete joint venture
partnerships and mortgage debt and equity lending investments.
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,
debt repayments 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 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.
