SAINT-JEAN-BAPTISTE, QUEBEC -- (Marketwire) -- 03/20/13 -- Fronsac Real Estate Investment Trust (TSX VENTURE: GAZ.UN) (the "Trust" or "Fronsac") announces the acquisition of interests in two real estate properties located in Trois-Rivieres, Quebec.
"We are pleased to announce the acquisition of interests in two prime real estate properties. Both of these acquisitions meet the investment criterias established by the direction", stated Michel Lassonde, President and CEO of Fronsac.
The first property is located at the intersection of Barkoff and Des Ormeaux streets ("Property 1") in Trois-Rivieres. This represents an ideal location on commercial street Barkoff and adjacent to Place des Ormeaux. Fronsac and Societe en commandite Fronsac CDM ("SEC CDM") (a partnership created by Fronsac) acquired 50% of the units of Limited Partnership CDM-1 ("CDM-1"), the partnership owning Property 1. These units were acquired i) by SEC CDM from one private investor (13%) and from Plaza Z-Corp. Properties Inc. ("Plaza Z") (23%) and ii) by Trust from one private investor (14%). Plaza Z and one private investor retain 17% and 33% respectively of CDM-1's units. The total consideration of $660,000 paid at the closing of these acquisitions were paid as follows:
1. $184,800 cash to one of the private investors;2. $475,200 was paid by the issuance of 1,485,000 Preferred Units ("Units") of SEC CDM, being 536,250 preferred units in favor of one of the private investors and 948,750 preferred units in favor of Plaza Z. The units may be exchanged at any time for 1,485,000 units of Fronsac until December 31st, 2017 and give the right to receive the same distributions than what is paid on Fronsac's units until December 31st, 2017.
The second property is located at the intersection of Barkoff Street and Exit 202 of Highway 40 ("Property 2") in Trois-Rivieres. This represents an ideal location since it is directly at the exit of Highway 40. Limited Partnership Fronsac Barkoff ("SEC Barkoff") (a partnership created by Fronsac) acquired the interest of a private investor (44%) and a part of the interest of Plaza Z (21%), for a total interest of 65% in Property 2. Plaza Z and another private investor are keeping an interest of 23% and 12% respectively in Property 2. The total consideration of $1,587,950 paid at the closing of these acquisitions was paid as follows:
1. $1,074,920 cash to the private investor; and2. $513,030 was be paid by the issuance, in favor of Plaza Z, of 1,603,200 Preferred Units ("Units 2") of SEC Barkoff. Units 2 may be exchanged at any time for 1,603,200 units of Fronsac until December 31st, 2017 and give the right to receive the same distributions than what is paid on Fronsac's units until December 31st, 2017.
For more information regarding these acquisitions, which are, in part, related party transactions under Regulation 61-101 respecting Protection of Minority Security Holders in Special Transactions, please refer to the Material Change Report available on SEDAR at www.sedar.com.
Fronsac Real Estate Investment Trust is an open-ended trust that acquires and owns high quality commercial real estate properties, rented to strong tenants under long term, management free and net leases.
This press release contains forward-looking statements and information as defined by applicable securities laws, including statements relating to Fronsac and expectations of the management regarding a proposed transaction and the expected benefits thereof. There is no assurance that the proposed transaction will be carried out and that the anticipated benefits will materialize. The proposed transaction is subject to approval and consent of stakeholders and there is no certainty that these will be achieved. Fronsac warns the reader that actual events may differ materially from current expectations due to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from the results anticipated in such statements. Among these include the risks related to economic conditions, the risks associated with the local real estate market, the dependence to the financial condition of tenants, the uncertainties related to real estate activities, the changes in interest rates, the availability of financing in the form of debt or equity, the effects related to the adoption of new standards, as well as other risks and factors described from time to time in the documents filed by Fronsac with securities regulators, including the management report. Fronsac does not update or modify its forward-looking statements even if future events occur or for any other reason, unless required by law or any regulatory authority.
The TSX Venture Exchange and its regulatory service provider (as that term is defined in the policies of the TSX Venture Exchange) decline all responsibility for the adequacy or accuracy of this release.
President and CEO
Fronsac Real Estate Investment Trust