0944460 B.C. Ltd.

May 02, 2016 18:32 ET

0944460 B.C. Ltd. Announces Acquisition and Disposition Transactions

VANCOUVER, BRITISH COLUMBIA--(Marketwired - May 2, 2016) - 0944460 B.C. Ltd. (the "Company" or "0944460") is pleased to announce that the Board of Directors of the Company has approved, subject to receipt of requisite shareholder approvals:

  • the proposed acquisition (the "Acquisition") of a new mixed use residential and commercial real estate development project located at 525 and 535 North Road, Coquitlam, BC (the "North Road Project"), construction of which is expected to commence towards the end of the second quarter or the beginning of the third quarter of 2016 by Onni North Road South Development Limited Partnership ("North Road Limited Partnership"), which will be 100% owned by the Company after the closing of the Acquisition; and
  • the proposed disposition (the "Disposition") of the development property located at 7771 Alderbridge Way, Richmond, B.C. (the "Riva 4 Property").

The Acquisition

The North Road Project will be transferred by 0950193 B.C. Ltd. (the "Vendor"), a company beneficially owned and controlled by the Onni group of companies (the "Onni Group"). Under the proposed terms of the Acquisition, the Company will acquire a 100% interest in the North Road Property in exchange for the issuance of 100,000 common shares of the Company.

The Vendor currently holds 31,019,125 common shares of the Company, representing 45% of the outstanding common shares and all of the non-voting shares (the "Non-Voting Shares") of the Company and is a "related party" of the Company under Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions ("MI 61-101"). As a result, the Acquisition is a "related party transaction" requiring a formal valuation and minority shareholder approval under MI 61-101.

The Company is relying on an exemption from the requirement to obtain a formal valuation available under Section 5.5(b) of MI 61-101. The Company intends to seek minority shareholder approval at the Company's upcoming annual general and special meeting scheduled to be held on June 23, 2016 (the "Meeting"). In connection with obtaining minority shareholder approval, all 31,019,125 common shares and all of the Non-Voting Shares held by the Vendor will be excluded from the vote in respect of the Acquisition.

In connection with the Company's review of the Acquisition, the Company engaged Garnett Wilson Realty Advisors Ltd. ("Garnett Wilson"), an appraiser who is independent of the Company and the Vendor, to provide an appraisal of the North Road Property, which assigned a current fair market value of $15,330,000 (the "Acquisition Appraisal") to the North Road Property.

A summary of the Acquisition Appraisal and information regarding the Company's review and recommendations in respect of the proposed Acquisition will be available in the management information circular mailed to shareholders in connection with the Meeting (the "Circular"). Copies of the Acquisition Appraisal and the Circular will also be available on SEDAR at www.sedar.com under the Company's profile in mid-May, 2016. The Company believes the consummation of the Acquisition will provide it with a new project consistent with the general course of its current real estate development business.

The Disposition

Under a separate transaction, the Company is proposing to sell the Riva 4 Property to a limited partnership owned and controlled by the Onni Group (the "Riva LP").

In connection with the Company's review of the Disposition, the Company engaged Garnett Wilson to provide an appraisal of the Riva 4 Property, which assigned a current fair market value of $16,415,000 to the Riva 4 Property (the "Disposition Appraisal"). Garnett Wilson is independent of the Company and the Onni Group. Under the terms of the Disposition, the Riva LP will acquire the Riva 4 Property for aggregate consideration of $16,415,000 (the "Purchase Price"). The Purchase Price will be satisfied through a combination of the Riva LP assuming all of the Company's debt currently secured by the Riva 4 Property (the "Debt") and a cash payment in an amount equal to the amount by which the Purchase Price exceeds the amount of Debt.

The Company and the Riva LP are related parties, within the meaning of MI 61-101. As a result, the Disposition is a "related party transaction" requiring a formal valuation and minority approval under MI 61-101.

The Company is relying on an exemption from the requirement to obtain a formal valuation available under Section 5.5(b) of MI 61-101. The Company intends to seek minority shareholder approval at the Company's upcoming Meeting. In connection with obtaining minority shareholder approval all 31,019,125 common shares and all of the Non-Voting Shares held by the Vendor will be excluded from the vote in respect of the Disposition.

A summary of the Disposition Appraisal and information regarding the Company's review and recommendations in respect of the proposed Disposition will be available in the Circular. A copy of the Disposition Appraisal and the Circular will be available on SEDAR at www.sedar.com under the Company's profile in mid-May, 2016. The Company believes the consummation of the Disposition will free up Company resources invested in the Riva 4 Property, which is not expected to commence construction in the foreseeable future, and allow it to focus on other real estate development projects.

Both the Acquisition and Disposition were reviewed by the Board of Directors of the Company and after careful consideration, including a review of the Acquisition Appraisal and the Disposition Appraisal the Board of Directors unanimously (with Sam Parrotta, Chief Financial Officer of the Onni Group having declared his interest and abstained from voting) approved the Acquisition and Disposition and recommended to the voting shareholders, other than the Vendor, to vote to approve both the Acquisition and the Disposition.

Closing of the Acquisition and the Disposition remain subject to a number of conditions including the negotiation and execution of definitive agreements in respect of each transaction and receipt of all requisite corporate and shareholder approvals (including approval by a majority of the voting shares other than those held by the Vendor). The transactions cannot close until the required shareholder approval is obtained. There can be no assurance that either transaction will proceed as proposed or at all.

On Behalf of the Board of Directors of 0944460 B.C. Ltd.

Sam Parrotta, Chief Executive Officer

Forward-Looking Statements

Completion of each of the Acquisition and the Disposition are subject to a number of conditions, including receipt of "minority shareholder approval". The transactions cannot close until the required shareholder approval is obtained. There can be no assurance that the transactions will be completed as proposed or at all.

This news release may include forward-looking statements that are subject to risks and uncertainties. All statements herein, other than statements of historical fact, are to be considered forward looking. In some cases, these forward-looking statements can be identified by words or phrases such as "may", "will", "expect", "anticipate", "aim", "estimate", "intend", "plan", "believe", "potential", "continue", "is/are likely to", "should", or the negative of these terms, or other similar expressions intended to identify forward-looking statements. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include, but are not limited to failure of the parties to the Acquisition to enter into a definitive agreement with respect to the Company's acquisition of an interest in each of North Road LPco and North Road GPco or any other failure to acquire such interests, failure of the parties to the Disposition to enter into a definitive agreement with respect to disposing the Company's interest in the Riva 4 Property or any other failure by the Company to dispose of such interest, failure to obtain the requisite shareholder approvals, market prices, continued availability of capital and financing, the state of the real estate sector and general economic, market or business conditions. In making such forward-looking statements, the Board has relied upon a number of material factors and assumptions, including with respect to: the Acquisition Appraisal, the Disposition Appraisal and the terms and conditions on which each of the Acquisition and the Disposition will be completed. Although the Board of Directors of the Company believes that the expectations with respect to such forward-looking statements are reasonable, such forward-looking statements are subject to known and unknown risks and uncertainties and, accordingly, there can be no assurance that such expectations will prove to be correct and accurate and, therefore, readers are advised to rely on their own evaluation of such uncertainties. We do not assume any obligation to update any forward-looking statements except as required under the applicable laws.

Contact Information

  • 0944460 B.C. Ltd.
    Sam Parrotta
    Chief Executive Officer
    604-602-7711
    604-688-7907 (FAX)