In the News
March 03, 2008
Crombie REIT files prospectus for subscription receipts, convertible debentures
Crombie REIT on Feb. 29 filed a preliminary short form prospectus qualifying 5,455,000 subscription receipts and C$30 million of 7.0% extendible convertible unsecured subordinated debentures for distribution by the REIT.
The receipts will be sold at C$11.00 each for a total price of approximately C$60.0 million. The debentures bear interest at an annual rate of 7.0%, payable semiannually in arrears on June 30 and Dec. 31 in each year, commencing June 30.
The company also granted the underwriters an overallotment option to purchase up to an additional 272,750 subscription receipts at C$11.00 per subscription receipt, exercisable up to 30 days after the closing of the offering.
The estimated total net proceeds from the offering will amount to approximately C$82.0 million, or C$84.9 million if the overallotment option is exercised in full, after deducting the underwriters fee and the estimated expenses of the offering.
The company intends to use all of the net proceeds from the offering to finance, in part, the purchase price of the acquisition of a portfolio of 61 commercial properties from affiliates of Empire Co. Ltd.
If the Empire acquisition is terminated, the debentures will mature immediately; if the acquisition is consummated, the maturity date will automatically be extended to March 20, 2013. At the option of the holder, each C$1,000 principal amount of debenture is convertible into approximately 76.9231 units of the company, representing a conversion price of C$13.00 per unit.
CIBC World Markets Inc., TD Securities Inc., BMO Nesbitt Burns Inc., Scotia Capital Inc., National Bank Financial Inc., Canaccord Capital Corp. and Raymond James Ltd. are the underwriters for the offering.
