Slate Office REIT 9 00 Convertible Unsecured Subordinated Debentures Exp 28 Feb 2026 T.SOT.DB.B

RE:CIBC comments after conference

[TVR]

I think the CIBC analysis pretty much sums things up. Not good.

Little prospect of anybody bailing the REIT out and doubtful that Armoyan or SAM, either together or individually, have the financial capability to recapitalize SOT.UN to a level that would satisfy the lenders.  The deterioration in unitholder equity is compounding the problem and, unless somebody steps up to buy the REIT, it looks like the only way to recpaitalize is to do a conversion of all the debentures to equity.  To get this done the conversion terms would need to give the debenture holders close to 100% of the equity.  Even then it may not get approved.  Conversion of the debentures alone will not solve the problem.  There also needs to be a cash injection of at least $50 million, maybe more.  Hard to see that being achieved through asset sales at this point so where does the cash come from?  I doubt a rights offering is viable unless backstoppped by somebody, which does not seem very likely. Current unit holders or debenture holders are unlikely to subscribe to a rights offering given the precarious financial position.

One of the few positive things I could see in the new information was the delisting review was extended based on information provided on the recapitalization plan, suggesting that there is at least a plan with a possibility of success.  Based on the delisting extension provided it looks like the end of the year is the deadline so the plan needs to be put before unitholders very soon.