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Gold/Mining/Energy : Canadian REITS, Trusts & Dividend Stocks -- Ignore unavailable to you. Want to Upgrade?

To: Kitskid who wrote (251)	7/21/1999 12:57:00 AM
From: Kitskid	Read Replies (1) \| Respond to of 11633

newswire.ca - Belkorp to Invest $100 Million in CHIP REIT - VANCOUVER, July 20 /CNW/ - Canadian Hotel Income Properties Real Estate Investment Trust HOT.un - Canadian Hotel Income Properties Real Estate Investment Trust (``CHIP REIT') today announced that it has entered into a definitive agreement that provides for a $100 million investment in CHIP REIT (the ``Transaction') by BII Acquisition Limited Partnership (``Belkorp LP'), an affiliate of Belkorp Industries Inc. (``Belkorp'). The Transaction consists of two components of $50 million each: a treasury issue by CHIP REIT of 5 million units at $10.00 per unit, and a take-over bid for 5 million units of CHIP REIT at $10.00 cash per unit. Belkorp is a Vancouver-based group of companies, headed by Mr. Stuart Belkin. The group is active in real estate, environmental services and merchant banking, and has a portfolio of investments in a variety of public and private entities. Belkorp and its affiliates currently own 9.9% of the outstanding units of CHIP REIT. Following the completion of the Transaction, Belkorp and its affiliates will control approximately 34% of the outstanding units of CHIP REIT. The $50 million proceeds from the treasury issue and related additional debt capacity of $33 million will be utilized to enable CHIP REIT to continue its strategy of acquiring and enhancing the performance of upscale, full-service hotels across Canada. ``This agreement will allow CHIP REIT unitholders to benefit from the repositioning and other value creation initiatives that have been in progress across our portfolio. Belkorp has an excellent track record, and with its increased financial commitment to CHIP REIT, we are confident in achieving our goals,' said Rhys Eyton, Chairman, President and CEO of CHIP REIT. ``We believe in both CHIP REIT's strategy and assets and we are excited about CHIP REIT returning to a growth phase,' said Stuart Belkin, President and CEO of Belkorp. ``There is significant potential today in the upscale and upper mid-market segments of the Canadian hotel market. CHIP REIT has built a solid foundation to seize the opportunities that will be accelerated with our investment.' The Transaction is subject to regulatory approval and is conditional upon: - approval of the treasury issue by a majority of votes cast by unitholders other than Belkorp at a meeting of unitholders expected to be held on August 30, 1999; and - 5 million units being tendered to the bid to be mailed to unitholders by July 26, 1999. The bid will be open for acceptance until three days after the unitholders' meeting. Upon closing of the transaction, CHIP REIT's eight member Board of Trustees will consist of Stuart Belkin, John Evans, Rhys Eyton, Tom Lindsay, John O'Neill, Janice Rennie and two additional nominees of Belkorp. The Board of Trustees has agreed to recommend that unitholders approve the treasury issue on the basis of a number of factors including the recommendation of the Special Committee of the Board and the advice of TD Securities Inc. CHIP REIT has agreed to pay Belkorp LP a break fee of $4 million in certain events, including if the Board of Trustees withdraws its recommendation, recommends a competing transaction or a competing transaction is completed. CHIP REIT has agreed to pay Belkorp LP a financing commitment fee of $2 million, but not the break fee, in the event that unitholders do not approve the treasury issue or the current Royal Host offer is completed. CHIP REIT was Canada's first hotel real estate investment trust and has a focus on mid-market and upscale full-service hotels. Through upgrades, repositioning and franchising, CHIP REIT and its wholly owned hotel manager, CHIP Hospitality, improve the operating performance of the properties within the portfolio to create value for investors. CHIP REIT currently owns and operates 36 hotels with close to 8,000 rooms. CHIP REIT units trade on The Toronto Stock Exchange under the symbol HOT.un. %SEDAR: 00005031E -30- For further information: please contact: Kevin Grayston, Executive Vice President & Chief Financial Officer, Phone: (604) 685-0011, Fax: (604) 685-0019, www.chipreit.com <http://www.chipreit.com>