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

sot_-_q3_2024_financial_statements_vsedar Note 28

[HRc60to65]

Note 28
iv. On October 31, 2024, one of the REIT's lenders provided formal Event of Default notices expressing their right to demand repayment
of the borrowings at their discretion. The Event of Defaults occurred due to certain covenant violations from June 30, 2024. The REIT
is working with the lender to cure such defaults. The notices received relate to a defaulted mortgage secured by one of the REIT's property with a principal balance of $79.1 million at September 30, 2024.
Someone is knowing the propertiy ?
 
 
v. On November 5, 2024, the REIT disposed of one of its Ontario properties for a gross purchase price of $39.0 million.
Slate Office REIT
 
 
Sales already annonced of properties sale in q4-2024, total 64.2M$:
Winnipeg,114 Garry Street  14.3M$
Winnipeg, 365 Hargrave Street 10.9M$
I think it is : Ontario, Markham, Gateway center  39M$

[HRc60to65]

Correction Sales already annonced of properties sale in q4-2024, total 64.2M$: Winnipeg,114 Garry Street  14.3M$ Winnipeg, 365 Hargrave Street 10.9M$ I think it is : Ontario, Markham, Gateway center or Woodbine & Steeles Center 39M$

[Tree2tree]

The pressure from lenders is not a bad thing if it speeds up action by the board.  We debenture holders are also lenders, and we want to get paid too.  I hope some of those buying debentures lately are entities who know how to defend their interest with the board.   About that default event, if it is on a specific property, then the lender's recourse might be limited to forcing

[HRc60to65]

Sot is a profitable business.  at 6x the net income 2.4M$/Q or 9.6M$/year = 57.6M$ 56.6M$/84.4 units = 0.68$ per unit Net loss 182M$ is including 184.4M$ of the following non cash items: Change in fair value of financial instruments  9M$ Change in fair value of investment properties  175.4M$ Without those 2 items SOT is generating a net income of 2.4M$ in Q3-2024

[pennylane101]

In other words, the company is not insolvent.  Section 192 of the CBCA:   “it is not practicable for a corporation that is not insolvent to effect a fundamental change in the nature of an arrangement under any other provision” of the CBCA

[TVR]

The underlying business of SOT.UN appears to be doing quite well since the average occupancy across the portfolio is only 79% and they are still making money on the operations side.  The problem is simply the debt level is much too high.  At this point the REIT has few, if any, unencumbered properties it can sell.  Any future property sales will only generate modest amounts of net

[Tree2tree]

Interesting discussion here.  Yes, SOT is generating a bit of cash - but not enough to pay down debt significantly.  Whether or not a bankruptcy happens, the lenders are in a position to dismember the company in a way that is not favourable to common share or debenture holders.  Higher occupancy would help a lot, but is not likely to happen immediately.  So new financing seems

[rad10]

  Tree2tree having an epiphany...... Whatever next?

[HRc60to65]

An hostile offer from GA or an other REIT They can get SOT private for less than 100M$, 80M$ or 50M$

[TVR]

If someone wanted to take SOT.UN private they would still have to deal with recapitalizing the REIT and getting the debt ratio down to a sustainable level, so the cost would be buying out the unit holders + putting in something in the order of $200 million to recapitalize.

[rad10]

Don't the debentures have a change of control clause?  Redemption at par?  Nice idea though .

[HRc60to65]

An hostile takeover by a solid REIT, the debenture holders will accepted the deal.  GA will not be happy.

[Tree2tree]

If the buyer is a bigger REIT with some working capital surplus, they could just make a bid for the common shares and roll all of SOT's assets and debts into their REIT.  Or possibly raise a modest amount of capital based on their existing financial strength.  They can also take their time to selectively dispose of assets that are not core to their strategy.  Getting swallowed

[HRc60to65]

It can be a Canadian REIT like Artis or a USA REIT. For a USA the cost is lower at 1.40 exchange rate

[Tree2tree]

Clarke Inc has a market cap of $330 million.  I haven't looked at the state of their financials, but they could be big enough to play a role here.  Not to mention G2S2.

[rad10]

God forbid.  Samir Manji is slowly right sizing Artis.  The balance sheet is being slowly repaired after a ridiculous reckless acquisition spree prior to sandpiper ousting the previous leadership. Where do you come up with these fantasies.........