Item 1.01. Entry into a Material Definitive Agreement.
February 13, 2014, following the completion of its due diligence review of two warehouses, a workshop and an office facility leased to Crown Crest ( Leicester) Plc and Crown Crest Group Limitedlocated in Leicester, United Kingdom(the "Crown Crest Property"), American Realty Capital Global Trust, Inc.(the "Company") finalized the prerequisite conditions to acquire, and subsequently acquired, the fee simple interest in the Crown Crest Property through a wholly owned subsidiary of its operating partnership. Pursuant to the terms of the sale and purchase agreement dated December 31, 2013(the "Agreement for Sale"), the obligations of which were assumed by the Company on February 13, 2014from the parent of its sponsor, the Company's obligation to close upon the acquisition was subject to the satisfactory completion of a due diligence review of the Crown Crest Property, among other conditions. The Agreement for Sale contains customary representations and warranties by the seller.
The description of the Crown Crest Property set forth in Item 2.01 of this Current Report on Form 8-K is incorporated by reference into this Item 1.01 in its entirety.
Item 2.01. Completion of Acquisition or Disposition of Assets.
February 13, 2014, the Company, through a wholly owned subsidiary of its operating partnership, closed the acquisition of the fee simple interest in the Crown Crest Property for a contract purchase price of $63.6 million(based upon an exchange ratio of $1.65to £1.00, as of the date of acquisition), exclusive of closing costs. The seller, Crown Crest Property Developments Limited, had no material relationship with the Company and the acquisition was not an affiliated transaction. The Company purchased the Crown Crest Property fee simple interest using (i) available cash on hand from the Company's ongoing initial public offering in the amount of $31.8 millionand (ii) a loan of $31.8 millionfrom Santander UK Plc, as described in Item 2.03 of this Current Report on Form 8-K. The Crown Crest Property contains 805,530 rentable square feet and is 100% leased to Crown Crest ( Leicester) Plc and Crown Crest Group Limitedunder one lease, both being affiliated food distribution companies that specialize in the supply of branded goods to value retailers. Crown Crest Group Limitedis the parent of the lessees and owns 97% of Poundstretcher Limited, the guarantor
of the lease.
The original lease has a 25-year term which commenced in
February 2014and terminates in February 2039, with rent increases only every five years based on the greater of rental rates under the lease or the Index of Retail Prices published by the Office of UK National Statistics, provided that the per annum increase shall not be less than 2.5% or greater than 4.5%. The lease is net whereby the tenant is required to pay substantially all operating expenses, including costs to maintain and repair the roof and structure, in addition to base rent. The annualized straight line rental income for the Crown Crest Property is $6.6 million.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
Crown Crest Loan On
February 13, 2014, the Company, through an indirect wholly owned subsidiary of its operating partnership, entered into a loan agreement (the "Crown Crest Loan") with Santander UK Plc in the amount of $31.8 million(based upon an exchange rate of $1.65to £1.00, as of the date of the acquisition of the Crown Crest Property) with respect to the Crown Crest Property. The Crown Crest Loan provides for quarterly interest payments with all principal outstanding being due on the maturity date in February 2019. The Crown Crest Loan bears interest at a stated rate of 4.2%, fixed by an interest rate swap entered into with JPMorgan Chase Bank, N.A. The Crown Crest Loan may be prepaid at any time, in whole or in part, with break costs, if applicable. In the event of a default, the lender has the right to terminate its obligations under the Crown Crest Loan and to accelerate the payment on any unpaid principal amount of the Crown Crest Loan.
Item 9.01. Financial Statements and Exhibits.
(a) Financial Statements of Business Acquired (Lessees)
Set forth in this Item 9.01(a) are summary audited financial statements of one of the Crown Crest Property lessees and parent of the guarantor,
Crown Crest Group Limited, as described under Item 2.01 of this Current Report on Form 8-K.
The financial statements of
Fiscal Year Ended March 31, 2013 2012 2011 (Audited) (Audited) (Audited) Consolidated Profit and Loss Account Turnover £ 430,179,490 £ 444,621,993 £ 410,225,321 Profit on ordinary activities before taxation 9,564,590 15,507,809 17,807,364 Profit for the financial year 8,942,831
13,167,820 13,974,355 March 31, 2013 March 31, 2012 March 31, 2011 (Audited) (Audited) (Audited) Consolidated Balance Sheet Creditors: amounts falling due within one year £ 86,237,477 £ 96,859,444 £ 64,408,988 Total assets less current liabilities 138,778,102 137,223,612 124,097,655 Creditors: amounts falling due after more than one year and other liabilities 40,862,512 47,263,295 47,547,448 Total capital and reserves 97,915,590