Dec 2016 Financial News

Fortress Caribbean Property Fund Limited SCC - Value Fund - Notice of Material Change

Dec 05, 2016

FORTRESS Caribbean property FUND LIMITED SCC - VALUE FUND
Notice to Shareholders

Material Change Notification
Sale of the BET property, Wildey, Christ Church, Barbados

In accordance with the above mentioned and Sections 64(1) of the Securities Act 2012 and Appendix XIII of the Republic of Trinidad and Tobago Stock Exchange Rules.

Fortress Caribbean Property Fund Limited SCC is a 57% shareholder in the BET Building Joint Venture, a vehicle for ownership of the BET Building in Wildey, Barbados, previously occupied by Cable & Wireless under a long-term lease. The lease was terminated in October, 2015.

On November 29, 2016 the Directors of the BET Building Joint Venture concluded an agreement for the sale of the property for a gross consideration of BBD $16.5 million. Net proceeds to the Joint Venture will be BBD $14.7 million. The expected closing date is December 1, 2016. The Joint Venture will receive an immediate payment from the purchaser of BBD $10 million and will take a vendor’s mortgage for the balance of BBD $6.5 million due December 1, 2018. The purchaser is Era Educational Services DMCC, a company incorporated in Dubai and registered as an external company under the Companies Act.

The transaction will result in a gross loss to the Joint Venture of BBD $9.96 million. This is partially offset by a lease surrender fee of BBD $5.9 million, received in January 2016, resulting in an overall loss to the Joint Venture of BBD $2.3 million before selling costs. Selling costs are estimated at BBD $1.8 million and include commissions, legal fees, property transfer tax, and stamp duty. The net loss to the Joint Venture after fees and expenses will be BBD $4 million. Fortress Caribbean Property Fund Limited SCC – Value Fund will share in this transaction to the extent of its 57% shareholding in the Joint Venture. The net loss to the Fund will therefore be BBD $2.3 million of which BBD $1.7 million was already booked in the Fund’s third quarter financial statements. The additional charge of BBD $0.6 million was booked in the fourth quarter ending September 30, 2016. The Joint Venture will continue to receive lease payments of BBD $150,000 per annum for the part of the BET Building property that houses the cellular tower until December 1, 2018.

While the sale price of the property is a discount to book value, it reflects the significant costs that would have been incurred for the site to be redeveloped for new tenants following the termination of the Cable & Wireless lease. The transaction provides the Fund with immediate cash resources to reinvest in long-term, revenue-generating real estate assets consistent with its mandate.

Geoffrey Cave
Chairman
Fortress Caribbean Property Fund Limited SCC – Value Fund

Source:
The Trinidad and Tobago Stock Exchange Limited
Monday December 5, 2016