Regent Pacific Properties Inc.
TSX VENTURE : RPP.P

October 16, 2009 16:33 ET

Regent Pacific Properties Inc. Enters Into Letter of Intent to Acquire Office Complex Project for Qualifying Transaction

EDMONTON, ALBERTA--(Marketwire - Oct. 16, 2009) - Regent Pacific Properties Inc. ("Regent") (TSX VENTURE:RPP.P), a capital pool company, is pleased to announce that it has entered into a letter of intent dated September 25, 2009 (the "Letter of Intent") with Cassel Centre Ltd. ("CCL") to acquire all the issued and outstanding shares and any other outstanding and issued shares of CCL (the "CCL Shares"), subject to the approval of the shareholders of CCL and all regulatory approvals. Pursuant to the terms of the Letter of Intent, Regent will purchase the CCL Shares for a total of $12,000,000 (the "Purchase Price") which price will be adjusted depending on the results of the most current appraisal report ("Appraisal") of CCL's Office Complex Project ("OCP") in Edmonton. The Purchase Price will be paid as follows:

(a) the issuance of 18,000,000 common shares of Regent (the "Common Shares") at a deemed value of $0.10 per Common Share for the consideration of $1,800,000 at the date of closing;

(b) the issuance of 42,000,000 convertible non-voting preferred shares of Regent (the "Preferred Shares") at a deemed valued of $0.10 per Preferred Share for the consideration of $4,200,000 which may be converted into Common Shares at a conversion price of $0.10 per Common Share at the option of the preferred shareholders before the fifth anniversary year after the completion date of the qualifying transaction; and

(c) the issuance of a convertible debenture in an amount equal to the amount in the Appraisal multiplied by the percentage of completion less the payments made in paragraphs (a) and (b) above. This amount will be repayable on or before the end of the fifth anniversary year after the completion date of the proposed transaction plus interest at 7% compounded annually commencing after one year from the date of closing. The convertible debenture is secured by the assets of CCL and may be converted to Common Shares at a conversion price of $0.10 per Common Share at the option of the debenture holder before the fifth anniversary after the completion date of the qualifying transaction. 

All Common Shares issued by Regent may be subject to escrow in accordance with the policies of the TSX Venture Exchange ("TSXV") and the British Columbia and Alberta securities commissions (collectively the "Securities Commissions"), if applicable.

Pursuant to the Letter of Intent, Regent has agreed to pay to the shareholders of CCL a refundable deposit of $25,000 which may be returned to Regent should the proposed Transaction (as defined herein) not be completed. The purchase of the CCL Shares by Regent (the "Transaction") is subject to: (i) approval by the directors and shareholders of each of Regent and CCL; (ii) approval by the TSXV and the Securities Commissions; and (iii) completion of due diligence. There can be no assurance that the Transaction will be completed as proposed or at all. Upon completion of the Transaction, CCL may appoint three members to the board of directors of Regent.

A full comprehensive press release in accordance with TSXV Policy 2.4 will be disseminated at a later date once all particulars, including the updated appraisal report, have been finalized.

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

  • Regent Pacific Properties Inc.
    Eddie W.W. Yu
    President and Chief Executive Officer
    (780) 424-9898
    (780) 437-9899 (FAX)
    info@cassel.ca