All amounts are in US dollars unless otherwise stated
TORONTO, Aug. 3, 2017 /CNW/ - Firm Capital American Realty
Partners Corp. (the "Company"), (TSXV: FCA.U/FCA) is pleased to announce the following accretive corporate transactions
intended to strengthen the Company's balance sheet and future earnings potential:
FULL REPAYMENT OF THE SENIOR SECURED NOTES ("SSN")
Through a combination of existing cash resources and single family home sales, the Company has fully repaid the
$25 million, 7.5% SSN well before the December 31, 2017 maturity
date.
COMMENCEMENT OF CONVERTIBLE UNSECURED DEBENTURE REPAYMENTS
As a result of the final SSN repayment, the Company will commence repayment of the $17.3
million, 7.0% Convertible Unsecured Debentures (the "Debentures") from ongoing home sales.
DISPOSITION OF FLORIDA MINI-MULTI PORTFOLIO FOR A 14% IFRS PREMIUM
The Company has entered into three conditional all cash purchase and sale agreements with one unrelated third party to
dispose of its entire Florida mini-multi portfolio for gross cash proceeds (before transaction
costs) of approximately $4.2 million. The disposition price represents a 14% premium over the IFRS
value of approximately $3.7 million, as reported on the Company's financial statements on
March 31, 2017. The Company anticipates closing the transactions during the third quarter of 2017.
Net cash proceeds generated from the transactions will be used for repayment of the Debentures. The dispositions are conditional
on a number of factors including, but not limited to, due diligence. The Company provides no guarantee that these transactions
will close.
$1.3 MILLION IN NEW JERSEY PROMISSORY NOTE
("NJPN") REPAYMENTS
Since March 31, 2017, the Company has also repaid approximately $1.3 million of NJPN. The NJPN had an original principal balance of approximately $3.1
million and now stands at approximately $1.1 million. The repayment of the NJPN will
generate approximately $0.07 million in annual interest expense savings for the Company. Based on
conditional in-place home sales, the Company should be able to generate significant net proceeds to fully repay the NJPN.
$2.8 MILLION IN CONDITIONAL SINGLE FAMILY HOME SALES
The Company has under contract for sale 19 single family properties comprised of 49 units for gross proceeds of approximately
$2.8 million. These home sales are anticipated to close during the third quarter of 2017 and the
net proceeds generated will be used for repayments of the Debentures and NJPN.
SINGLE FAMILY HOME INVENTORY HELD FOR SALE UPDATE
Beyond the conditional home sales as outlined above, the Company currently has 78 properties not sold, comprised of 12
single family homes available for sale in Florida, 14 properties comprised of 67 units available
for sale in New Jersey and 52 single family homes available for sale in Atlanta. With the exception of a 120 single family home rental portfolio located in Atlanta subject to a $4.0 million first mortgage (as further discussed below),
all of the remaining single family homes are currently listed for sale with various agents.
120 ATLANTA SINGLE FAMILY HOME UPDATE
The Company also owns a portfolio of 120 single family homes located in Atlanta that
are subject to a $4 million first mortgage due July 1, 2019. The
Company is actively leasing this portfolio with a view to disposing as one entire portfolio once fully stabilized due to the
blanket first mortgage. A buyer of these 120 single family homes will have to assume the first mortgage as the Company wants to
avoid discharge penalties, failing which the first mortgage will be held until maturity. As of today, 99 of the homes in this
portfolio are currently occupied representing an 82.5% occupancy, which is a significant improvement over the 45% occupancy this
portfolio had as at December 31, 2016.
ABOUT FIRM CAPITAL AMERICAN REALTY PARTNERS CORP.
Firm Capital American Realty Partners Corp. is a U.S. focused real estate investment entity that pursues real estate
and debt investments through the following platforms:
- Income Producing Real Estate Investments: Acquiring income producing real estate assets in major cities across
the United States. Acquisitions are completed solely by the Company or in joint-venture
partnership with local industry expert partners who retain property management responsibilities; and
- Mortgage Debt Investments: Real estate debt and equity lending platform in major cities across the United States, focused on providing all forms of bridge mortgage loans and joint venture capital.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain information in this news release constitutes forward-looking statements under applicable securities law. Any
statements that are contained in this news release that are not statements of historical fact may be deemed to be forward-looking
statements. Forward-looking statements are often identified by terms such as "may", "should", "anticipate", "expect", "intend"
and similar expressions. Forward-looking statements in this news release include, but are not limited to, statements with respect
to the Company's intention to complete the sale of its single-family homes and ultimate debt repayments, potential capital
financing and growth opportunities, as well as the Company's intention to acquire income producing U.S. real estate assets and
complete joint venture partnerships and mortgage debt and equity lending investments. Forward-looking statements necessarily
involve known and unknown risks, including, without limitation, risks associated with general economic conditions; adverse
factors affecting the U.S. real estate market generally or those specific markets in which the Company holds properties;
volatility of real estate prices; inability to complete the Company's single family property disposition program, debt repayments
or debt restructuring in a timely manner; inability to access sufficient capital from internal and external sources, and/or
inability to access sufficient capital on favourable terms; industry and government regulation; changes in legislation, income
tax and regulatory matters; the ability of the Company to implement its business strategies; competition; currency and interest
rate fluctuations and other risks, including those described in the Company's public disclosure documents on SEDAR at www.sedar.com.
Readers are cautioned that the foregoing list is not exhaustive. Readers are further cautioned not to place undue reliance on
forward-looking statements as there can be no assurance that the plans, intentions or expectations upon which they are placed
will occur. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect
and actual results may differ materially from those anticipated. Forward-looking statements contained in this news release are
expressly qualified by this cautionary statement.
Neither the 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.
Additional information about the Company is available at www.firmcapital.com or www.sedar.com.
SOURCE Firm Capital American Realty Partners Corp.
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