European Commercial Real Estate Limited
TSX VENTURE : ERE.P

January 23, 2017 14:09 ET

European Commercial Real Estate Limited Announces TSXV Conditional Approval and Filing of Filing Statement for Its Qualifying Transaction

TORONTO, ONTARIO--(Marketwired - Jan. 23, 2017) -

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European Commercial Real Estate Limited (the "Corporation") (TSX VENTURE:ERE.P), a capital pool company (as defined in Policy 2.4 (the "CPC Policy") of the TSX Venture Exchange (the "TSXV") Corporate Finance Manual), is pleased to announce that it has received conditional approval from the TSXV for the closing of its Qualifying Transaction, as defined in the CPC Policy, and that further to its press release dated November 18, 2016 (the "QT Press Release"), it has filed a filing statement in connection with the Corporation's Qualifying Transaction (the "Filing Statement").

As previously announced, the Corporation's Qualifying Transaction involves the acquisition of an initial commercial office property centrally located in Düsseldorf, Germany (the "QT Property"). Düsseldorf is the capital city of the German state of North Rhine-Westphalia. The city of Düsseldorf has a population of approximately 600,000 people and is the seventh most populous city in Germany. The QT Property was originally built in 1969 and refurbished in 2001. The building comprises approximately 5,263 square meters of leasable space and is over 99% occupied, primarily by medical tenants, with an average remaining lease term of approximately six years.

The Corporation will acquire the QT Property for an aggregate purchase price of approximately EUR11 million, subject to customary adjustments. The purchase price for the QT Property is expected to be financed by approximately EUR7.5 million in secured mortgage financing with a German bank with the balance of the purchase price satisfied in cash from the Corporation's existing funds and the proceeds of the Private Placement (as defined below). Interest on the new mortgage financing is expected to be incurred by the Corporation at an approximate cost of 1.5% per annum, over a seven-year term.

The Company expects to close the Qualifying Transaction on or about January 31, 2017. Upon completion of the proposed Qualifying Transaction, the Company is expected to meet all the minimum listing requirements for a Tier 1 Real Estate Issuer. The Filing Statement is available under the Company's profile on SEDAR at www.sedar.com.

Following the acquisition of the QT Property, the Corporation intends to carry on business as an owner and operator of commercial office properties located in Europe and, at an appropriate time, expects to effectively convert the Corporation into a real estate investment trust focused on commercial office properties located in Europe. There can be no assurances that the Corporation will convert into a real estate investment trust in the future and no representation is made to that effect.

In connection with the Qualifying Transaction, the Corporation expects to concurrently close the issuance, on a private placement basis to exempt purchasers, of an aggregate of 31,000,000 Common Shares at a price of $0.10 per Common Share for gross proceeds of $3,100,000 (the "Private Placement"). Closing of the Private Placement is conditional upon the closing of the Qualifying Transaction.

The Corporation's head office address is 199 Bay Street, Suite 5300, Commerce Court West, Toronto, Ontario M5L 1B9.

The information in this news release includes certain information and statements about management's view of future events, expectations, plans and prospects that constitute forward looking statements. These statements are based upon assumptions that are subject to significant risks and uncertainties. Because of these risks and uncertainties and as a result of a variety of factors, the actual results, expectations, achievements or performance may differ materially from those anticipated and indicated by these forward looking statements. Forward-looking statements in this news release include, but are not limited to, the ability of the Corporation to complete a Qualifying Transaction or the Private Placement. Any number of factors could cause actual results to differ materially from these forward-looking statements as well as future results. Although the Corporation believes that the expectations reflected in forward looking statements are reasonable, it can give no assurances that the expectations of any forward looking statements will prove to be correct. Except as required by law, the Corporation disclaims any intention and assumes no obligation to update or revise any forward looking statements to reflect actual results, whether as a result of new information, future events, changes in assumptions, changes in factors affecting such forward looking statements or otherwise. The reader is referred to the Corporation's initial public offering prospectus and the Filing Statement for a more complete discussion of risk factors relating to the Corporation and their potential effects, copies of which may be accessed through the Corporation's profile on SEDAR at www.sedar.com.

Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.

Completion of the Qualifying Transaction and the Private Placement is subject to a number of conditions, including but not limited to, the TSXV acceptance and, if applicable, pursuant to TSXV requirements, majority of the minority shareholder approval. Where applicable, the Qualifying Transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the Qualifying Transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the Filing Statement in connection with the Qualifying Transaction, any information released or received with respect to the Qualifying Transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.

The TSXV has in no way passed upon the merits of the proposed Qualifying Transaction and has neither approved nor disapproved the contents of this press release.

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