Oriana Resources Corporation announces letter of intent to complete
a qualifying transaction with Colwood City Centre Limited
Partnership
TORONTO,
Jan. 30, 2013 /CNW/ - Oriana
Resources Corporation ("Oriana") (OUP.P - TSX Venture), a
Capital Pool Company, is pleased to announce that on January 30, 2013 it entered into a letter of
intent with Colwood City Centre Limited Partnership
("Colwood"), to complete a business combination (the
"Transaction") whereby certain real property and related
assets of Colwood related to its Capital City Centre development
project (the "Colwood Assets") will be transferred to Oriana
in exchange for securities of Oriana. The Transaction is
intended to constitute a qualifying transaction of Oriana as such
term is defined in Policy 2.4 of the Corporate Finance Manual (the
"Qualifying Transaction") of the TSX Venture Exchange (the
"Exchange"). The Qualifying Transaction will
constitute an arm's length transaction for the purposes of the
Exchange's policies and rules.
About Colwood and Capital City Centre
Colwood is a limited partnership established in
the Province of British Columbia
in 2007. The general partner of Colwood is Colwood City
Centre GP Inc., a British Columbia
company owned indirectly by Adam
Gant and Emanuel Arruda.
Colwood is presently in the process of
undertaking a real estate development project known as Capital City
Centre.
Capital City Centre will be developed in
multiple phases across a total property assemblage of 13.89
acres. The development is located on the Westshore of
Victoria, the provincial capital of British Columbia, in the municipality of
Colwood.
Phase 1 is expected to include (a) the
integration of a 76 unit, four storey residential component above a
new 42,000 square foot London
Drugs store together with six storeys of office space above a
retail podium; and approximately 30,000 square feet of shop space
("Phase 1A"), and (b) a 27 storey residential tower that
will be ranked the tallest structure on Vancouver Island. It
is anticipated that the scope of this first phase, currently under
construction, will soon be expanded to include a 33,000 square foot
grocery store with eight storeys of senior care incorporated above
this anchor tenant. Phase 1A is expected to be completed
within the next 18 months at a total development cost of
approximately $67.5 million.
Oriana anticipates financing Phase 1A by utilizing existing cash
and the credit facilities arranged by Colwood (and to be assumed by
Oriana), as well as completing a financing with a senior
construction lender within approximately 90-120 days after the
closing of the Qualifying Transaction.
The lands were acquired in January of 2007 and
were subsequently rezoned to a mixed-use designation with a
permitted density of 3,821,190 square feet.
Overall, zoning entitlements allow for the
development of up to 12 residential towers ranging from 16 to 29
storeys, two-storey townhouse units, all of the uses described
above, including the addition of more office buildings, a hotel
facility, student housing, and a public plaza incorporating food
and beverage establishments.
It is currently estimated that building out
Capital City Centre to the full permitted density will require
capital expenditures of approximately $1.2
billion and will take approximately 15 years to
complete.
Business Plan
Upon completion of the Qualifying Transaction
(as hereinafter detailed), Oriana will seek to acquire and manage
income producing real estate while also pursuing superior real
estate investment returns realized from the organic development of
large urban mixed-use projects. The plan is to expand the
portfolio of assets across Canada,
targeting major metropolitan markets that are experiencing stronger
than average population and employment growth. Capital City
Centre will be the first transaction undertaken by Oriana; however,
Oriana's intended course of business includes pursuing a number of
other real estate projects and assets, in addition to Capital City
Centre. Oriana will retain League Assets Corp., a company
established under the laws of the Province of British Columbia, as its manager for purposes
of carrying out its intended business plan. The terms of the
management agreement have not been finalized but it is expected
they will be at market rates for comparable projects and
services. League Assets Corp. is owned indirectly by
Adam Gant and Emanuel Arruda, both residents of Victoria, British Columbia.
Name Change
Concurrent with the closing of the Transaction,
Oriana intends to change its name to League Urban Ventures Inc.
The Qualifying Transaction
Subject to regulatory approval, Oriana will
acquire the Colwood Assets (including both the assumption and
conversion to equity of existing debt financing obligations of
Colwood related to the Colwood Assets) for an estimated purchase
price of $161 million. The estimated
purchase price will be satisfied by issuing 258.5 million common
shares (the "Common Shares"), 6.4 million preference shares
(the "Preference Shares"), a promisory note of $3.9 million (the "Promissory Note"), and
by the assumption of indebtedness of Colwood in the amount of
$35 million. The foregoing
amounts are estimates only. The final purchase price and the number
of shares and amount of the Promissory Note to be issued by Oriana
in satisfaction therefor are subject to adjustment on or prior to
closing to reflect ongoing construction and related activities up
to the closing date of the transaction. The Common Shares
shall be issued at a deemed issuance price of $0.225 per Common Share and the Preference Shares
shall be issued at a deemed issuance price of $10.00 per Preference Share. The Promissory
Note will be issued at par, be non-interest bearing and shall have
a 5 year term with a two year extension option. The proposed
Qualifying Transaction will be effected by way of a Plan of
Arrangement pursuant to the Business Corporations Act
(British Columbia) and an
information circular will be completed detailing the terms of the
Transaction and seeking approval from shareholders of Oriana and
certain securityholders of Colwood and then voted on at concurrent
meetings of securityholders of Oriana and Colwood. On the
closing of the Transaction, Oriana shall seek the listing of the
Preferred Shares on the Exchange, in addition to the Common Shares,
which are already listed on the Exchange. The Colwood Assets
have been valued for the purposes of the Qualifying Transaction at
their book value (approximately $112
million (unaudited)), plus the capitalized and uncapitalized
development and other costs related to the Colwood Assets incurred
by Colwood to date and expected to be incurred prior to the closing
of the Qualifying Transaction.
It is currently anticipated that the board of
directors of Oriana will consist of Richard
Buzbuzian, who is currently the Chief Executive Officer and
a director of Oriana, as well as Adam
Gant, Patrick Miniutti,
Tony Quo Vadis, Bob Skene and Hermann Baron von Pfetten. Mr. Quo Vadis will also serve as Chairman. The
officers will include Adam Gant,
Chief Executive Officer, Jeffrey
Simpson, Chief Operating Officer, and John Parkinson, Chief Financial Officer.
The current directors of Oriana, other than Mr. Buzbuzian, will
resign upon closing of the Transaction. Biographies of each
of the anticipated directors and officers of Oriana are included
below.
Richard
Buzbuzian, Director - Richard
Buzbuzian has held various senior executive positions during
the past 15 years as both a principal and an advisor to public and
private companies. His business experience includes acquisitions
and dispositions, corporate finance, business development, and
investor relations. Mr. Buzbuzian was a director and Chief
Operating Officer of the Griffin Corporation (GRN.TSXV) from 1998
to 2002 and was a director of Armada Data Corp. (ARD.TSXV) from
1999 to 2009. At present, Mr. Buzbuzian is a director of CT
Developers (DEV.P. TSX.V), provides investor relations at New Dawn
Mining Corp. (ND.TSX), and is the President and CEO of Asher
Resources Corp. (ACN.TSXV) as well as Oriana.
Adam Gant,
Director and CEO - Adam Gant is an
accomplished entrepreneur with experience in the valuation and
financial aspects of real estate investments. He is currently the
Chief Executive Officer and a director of Partners Real Estate
Investment Trust (TSX: PAR.UN). With history as a real estate
investor and as an owner of: a property management company; a
development company; and a real estate finance company, Mr. Gant
has knowledge and experience with regards to real estate. Mr. Gant
will oversee all aspects of the acquisition and asset management
processes for Oriana. These duties will include due diligence,
financial and risk analysis, management reporting, as well as
corporate and regulatory compliance. Mr. Gant studied Engineering
at the University of British
Columbia.
Patrick Miniutti,
Director - Patrick Miniutti is the
Chief Operating Officer of League Assets Corp. ("League") as
well as the President of Partners Real Estate Investment Trust
(TSX: PAR.UN). Before joining League, Mr. Miniutti served as
Managing Director with Sunset Realty Services. Prior to this, he
served as an officer and director of several public companies
including as Executive Vice President, Chief Financial Officer,
Chief Operating Officer and Director for Konover Property Trust;
Executive Vice President, Chief Financial Officer and Director for
Crown American Realty Trust; Chief Financial Officer at New Market
Companies; Executive Vice President, Chief Operating and Chief
Financial Officer of Western Development Corporation and, Vice
President-Financial Services and Chief Accounting Officer for
Cadillac Fairview Corporation's Urban Business Unit. He began his
career in accounting with KPMG and then moved to Kenneth Leventhal & Company, where he
continued to specialize in commercial and residential real
estate. Mr. Miniutti has a Bachelor of Science degree in
Accounting from the University of
Bridgeport and substantially completed his MBA studies at
Michigan State University. He is a
Certified Public Accountant and has served as a member of the
AICPA's Real Estate Accounting Committee.
Tony Quo Vadis,
Director - Tony Quo Vadis has
provided oversight and leadership for public and private disclosure
filings and has worked closely with executive teams on strategy,
mergers and acquisitions, financing and operations. Over the
past ten years, Mr. Quo Vadis
performed executive roles including President and CFO within Conair
Group. Before that, he held senior financial roles with Finning
International and the Jim Pattison Group across North America and Europe. Mr. Quo
Vadis began his career in chartered accounting in 1980 and
spent his first 10 years in that industry. Mr. Quo Vadis has served on several corporate boards
including the board and executive of the British Columbia Aviation
Council and the board of the University of the Fraser Valley
Foundation. Mr. Quo Vadis has
received his Chartered Accountancy and a Certified General
Accountancy designations, and is a graduate of the Queens Executive Program at the Queens Business
School.
Bob Skene,
Director - Bob Skene has more than
40 years of business experience. A chartered accountant, Mr. Skene
has held a variety of executive roles including Chief Financial
Officer and Senior Development Officer of Victoria-based WCG
International Ltd., where he worked from 2000 to 2007, Chief
Executive Officer of Vancouver Island Advanced Technology (VIATEC);
Chairman, President and Chief Executive Officer of HTS High-Tech
Systems Ltd.; Vice President, Finance and Administration for BC
Systems; and Chief Operating Officer of Computel Systems Ltd. Mr.
Skene has served as Chancellor and Acting President of Royal Roads
University, and has been a member of the board of directors of the
Victoria Airport Authority, Greater Victoria Hospital Society, and
Victoria Chamber of Commerce.
Hermann Baron von
Pfetten, Director - Hermann Baron von Pfetten is an entrepreneur with more than 35
years' Canadian real estate experience. Mr. Baron von Pfetten began investing in rural
subdivisions in Alberta in 1975,
following which his business interests grew to include town
subdivisions and smaller commercial developments. He has built
and/or developed several real estate projects including a
commercial shopping centre in Edmonton which was later sold to Allianz
Insurance Germany, the first Earl's Restaurants franchise in
Prince George, BC which was
subsequently expanded to include seven restaurants in BC,
Alberta, and Manitoba, the last of which he sold in 2010,
and more recently "The Dorchester", a prestigious condominium strata
project in Kamloops, B.C..
Jeff Simpson, COO
- Jeff Simpson joined League as Head
of Urban Development in May 2012.
Prior to that, he was Senior Vice-President, Investments for Cole
Real Estate Investments, a $10
billion REIT based in Phoenix
Arizona. Over the course of his 27 year career, he has been
involved in a number of ground-up development projects, spanning
multiple asset classes, including a major mixed-use project located
in Burnaby, BC (Metropolis) and
another mixed-use project in the Lower Mainland of Vancouver, B.C. (City Square). Mr. Simpson
graduated from York University with a
degree in Economics and also completed the Urban Land Economics
program at University of British
Columbia. Mr. Simpson is a Fellow of the Real Estate
Institute of Canada and a
Professional Member of the Real Estate Institute of British Columbia. He has served as a
director of numerous real estate organizations, has lectured on
several courses pertaining to the real estate profession and
authored several published articles on the topic of real
estate.
John Parkinson,
CFO - John Parkinson is a senior
executive with cross-industry experience in the management of high
growth, dynamic companies. He has experience in the management of
public companies and in corporate financing. He joined League
in September 2012 as the Chief
Financial Officer responsible for real estate operations, including
Capital City Centre. Prior to joining League, Mr. Parkinson was the
Chief Financial Officer of Protox Therapeutics Inc., a TSX listed
bio-technology company and previously held the position of Vice
President, Finance at Aspreva Pharmaceuticals, a public company
formed in 2003 and sold to a diversified European healthcare group
for over $1 billion. Prior to
Aspreva, he focused on financial, high-tech and public company
practices during his 10 years with KPMG LLP. Mr. Parkinson is a
chartered accountant and is a member of Financial Executives
International. Mr. Parkinson is a graduate of the
University of Saskatchewan where he
received Bachelor of Commerce and Bachelor of Arts (Economics)
degrees.
The Transaction is conditional upon, among other
things, receiving all necessary regulatory and third party
approvals and authorizations, the receipt of an independent
valuation of the Colwood Assets, if required by the Exchange,
approval by the shareholders of Oriana and certain securityholders
of Colwood, confirmation of no material adverse change having
occurred for Oriana or the Colwood Assets prior to close, the
completion of a definitive agreement setting forth the terms and
conditions for the closing of the Transaction, the completion of
due diligence satisfactory to each party, and the completion of a
sponsorship report satisfactory to the Exchange (or waiver by the
Exchange of that requirement).
Oriana is currently confirming the terms of a
sponsorship relationship for this transaction with an Exchange
member firm, which will be disclosed as soon as an engagement is
formalized.
Following completion of the Transaction, it is
anticipated that each of Colwood and IGW REIT Limited Partnership,
a limited partnership established in the Province of British Columbia in 2007, will own, directly
or indirectly, more than 10% of the issued and outstanding voting
securities of Oriana and as such will be "insiders" of Oriana for
purposes of applicable securities laws. IGW REIT Limited
Partnership and its general partner, IGW REIT GP Inc., are
subsidiaries of LEAGUE IGW Real Estate Investment Trust, a
privately owned real estate investment trust established under the
laws of the Province of British
Columbia in 2007.
Completion of the transaction is subject to a
number of conditions, including but not limited to, Exchange
acceptance. There can be no assurance that the transaction will be
completed as proposed or at all.
Investors are cautioned that, except as
disclosed in the management information circular or filing
statement to be prepared in connection with the transaction, any
information released or received with respect to the transaction
may not be accurate or complete and should not be relied
upon. Trading in the securities of a capital pool company
should be considered highly speculative.
The TSX Venture Exchange Inc. has in no way
passed upon the merits of the proposed transaction and has neither
approved nor disapproved the contents of this press
release.
SOURCE Oriana Resources Corporation