Cagim Real Estate Corporation
TSX VENTURE : CIM

Cagim Real Estate Corporation

October 02, 2009 09:19 ET

Cagim Real Estate Corporation: New Strategic Real Estate Developments of $3,375,000 and Closing of a Private Placement Through Convertible Debentures of $1,400,000

QUEBEC CITY, QUEBEC--(Marketwire - Oct. 2, 2009) - Cagim Real Estate Corporation (the "Corporation" or "Cagim") (TSX VENTURE:CIM), a real estate management and acquisition corporation, announces today the closing of a $1,400,000 financing through convertible debentures, that the developing Complexe Lebourgneuf building has already been rented at 65% and the Corporation intends to finalize, subject to the conditions further described herein: i) the acquisition of a commercial building at a price of $2,537,500; and ii) the acquisition, in co-ownership, of commercial land valued at $837,000.

Debentures

The Corporation's management is pleased to announce the closing of financing through convertible debentures announced on September 23, 2009. The convertible debentures have a term of 24 months, bearing an interest rate of 9% per annum and payable quarterly. The capital on said debentures will be convertible at a price of $0.50 per share if they are converted within the first year of their issuing or at a price of $0.55 if they are converted within the second year. Of the amount of $1,400,000, $250,000 will be cashed upon confirmation by the Corporation to a subscriber of information related to its developing building, Complexe Lebourgneuf.

Rental Objective Achieved

Complexe Lebourgneuf, the developing building, is already rented at more than 65% as of September 30, 2009. This building of 235,000 square feet has welcomed its first tenants at the end of the month of June, 2009, and income from leases currently signed are sufficient to cover the debt service related to this building. "The demand is solid for quality commercial premises in Quebec City and Cagim clearly demonstrates its leadership in the provincial capital region", says Mr. Guy Boutin, Chief Executive Officer and Project Manager.

Commercial Building

Management announces it has agreed upon the principal conditions to acquire a commercial building located in the City of Saint-Augustin-de-Desmaures, province of Quebec, in the amount of $2,537,500. The building has a unique AAA tenant for the following 15 years. The acquisition price represents a capitalization rate of 10%.

The projected acquisition price will be payable cash, with a down payment of $1,000,000 and a hypothecary loan representing approximately $1,700,000, with the balance payable in common shares of the Corporation through the issuance of 1,400,000 common shares at a price of $0.50 each, representing $700,000.

This acquisition transaction, implicating an affiliated party, is subject to certain conditions including a full and satisfactory due diligence, an independent evaluation report, the approval of the TSX Venture Exchange and of any other regulatory authority that may be required and finally, the execution of a final purchase agreement. The Corporation's management intends to complete this transaction during its 4th quarter.

Commercial Land

The Corporation's management also announces it is currently in advanced negotiations for the acquisition of commercial land located in the Lebourgneuf district of Quebec City. The acquisition price, subject to fiscal adjustments, is established at $837,000, to be paid in cash.

This transaction is part of the Corporation's strategic expansion plan and is subject to certain conditions, namely a full due diligence.

The land is adjacent to the Complexe Lebourgneuf project, which property is held in co-ownership by the Corporation and the construction of such project is, in practical terms, completed. The Corporation's President, Mr. Stephane Beshro, described this transaction: "Complexe Lebourgneuf is a great achievement and will become a success, notably through its high occupancy rate at this stage of the project. The acquisition of the commercial land targeted by the purchase offer is part of a second commercial project that will be proportionally similar to the Complexe project."

The Corporation's management is confident that its management expertise will contribute once again to the implementation of this future project.

About Cagim Real Estate Corporation

The Corporation is listed on the TSX Venture Exchange and operates property management and acquisition activities. The Corporation operates its activities through its subsidiaries ADG Immobilier Inc. and Complexe Lebourgneuf Inc.

Neither TSX Venture 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.

Contact Information

  • Cagim Real Estate Corporation
    Mr. Denis Lepine
    Chief Financial Officer
    418-622-6644
    or
    Cagim Real Estate Corporation
    Mr. Guy Boutin
    Chief Executive Officer
    418-622-6644