NEW YORK, June 26, 2017 /PRNewswire/ -- Regency Affiliates, Inc. (OTC Pink: RAFI) ("Regency") today announced that it will issue a quarterly dividend of 6.10 cents per common share on July 7, 2017 to shareholders of record at the close of trading on June 30, 2017.
"We are pleased to declare a quarterly dividend of 6.10 cents per common share reflecting the 3.8% increase which commenced with the third quarter 2016 dividend payment," commented Laurence Levy, Chairman and Chief Executive of Regency. "We continue to be comfortable with this dividend level particularly as we benefit from the cash flows generated by the portfolio of self-storage assets in and around Harrisburg, Pennsylvania. The operations of those assets continue to perform well and generate strong cash flow."
"Our Security West investment represents a 50% limited partnership interest in real estate occupied by the United States Social Security Administration under a lease expiring in October 2018. The mortgage balance will be amortized to approximately $20.9 million on June 30, 2017, down from $98.5 million at the lease commencement on June 24, 2003. We anticipate that the mortgage will be amortized by more than $7.5 million in 2017."
"Regency also owns an indirect 50% interest in Mobile Energy which owns and operates an energy facility located in Mobile, Alabama. The facility supplies co-generated steam and electricity for use in Kimberly-Clark's mill operations under a 15 year agreement signed in 2004. This investment currently generates approximately $2.8 million of cash distributions per annum for Regency after debt amortization at the project level. In April 2017 Kimberly-Clark announced that it will invest $75 million to construct a new on-site cogeneration energy plant at its mill. The construction of the new plant is expected to take place over a two-year period. We are engaged in identifying other potential customers for the facility's output or alternative uses for the facility and we are actively working with our Mobile Energy partners at Detroit Edison to maximize cash flow for the remainder of our contract. As it presently stands, at the expected conclusion of the Kimberly-Clark contract in April 2019, Mobile Energy is expected to have fully discharged its debt out of operating cash flow and is projected to hold additional operating cash balances supplemented by operating and financial cash reserves which are expected to be released at the expiration of the contract."
"On April 18, 2016, Regency completed the acquisition of a portfolio of five stand-alone self-storage facilities in the Harrisburg, Pennsylvania vicinity for a total purchase price of $35.0 million of which $25.3 million was financed via a non-recourse ten-year debt financing. The facilities were purchased via a joint venture with SSCP Management LLC ("SSCP"). Pursuant to the terms of the joint venture, Regency earns a 7.5% per annum preferred distribution on its $11.2 million capital contribution. Surplus cash flow after the preferred distribution is allocated 80% to Regency and 20% to SSCP. Regency received its fourth distribution from the joint venture in April 2017 in the amount of $275,514 reflecting the 7.5% per annum preferred distribution plus additional cash flow driven by the strong operating performance of the investment for the quarter ended March 31, 2017. We are pleased with the strong improvement in occupancy and related cash flows at our self-storage facilities."
"We are continuing to review and evaluate further investment opportunities for Regency and intend to grow the company by investing in other attractive long term assets that meet our business characteristics and valuation criteria. Our net asset value per share continues to grow based on our existing investments."
"The delay in releasing our financial statements is primarily attributable to delays in GAAP financial reporting at our self-storage operating subsidiary. Primarily as a result of this GAAP financial statement reporting deficiency, Regency elected to change the manager of its self-storage assets to CubeSmart, effective August 1, 2017. CubeSmart, a NYSE listed company with a market capitalization exceeding $6 billion, manages over 800 self-storage facilities, including over 350 facilities owned by third parties. With the on-boarding of CubeSmart in August 2017, Regency anticipates resuming current and timely financial reporting before the end of September 2017."
In order to facilitate efficient processing of the dividend, management strongly suggests all shareholders with shares held in certificate form contact our transfer agent, Transfer Online, Inc. at (503) 227-2950 and confirm that the registration information is correct.
About Regency Affiliates
Regency Affiliates, Inc. invests in assets that generate attractive, predictable and sustainable returns on capital. We currently own three assets:
- A 50% limited partnership interest in the 717,000 square foot facility Security West complex located on 34.3 acres in Woodlawn, Maryland. The facility is occupied under a lease expiring in 2018 by the United States Social Security Administration;
- An indirect 50% interest in Mobile Energy which owns and operates an energy facility located on approximately 11 acres of land in Mobile, Alabama. The facility supplies up to 61 megawatts of co-generated steam and electricity for use in Kimberly-Clark's mill operations under a 15 year agreement signed in 2004; and
- A majority joint-venture interest in a portfolio of five stand-alone self-storage facilities in the Harrisburg, Pennsylvania vicinity comprising approximately 337,000 square feet of net rentable space in excess of 2,500 climate and non-climate controlled storage units.
This press release contains forward-looking statements. Forward-looking statements are statements that are predictive in nature or depend on or refer to future events and can be identified by the words "may," "might," "will," "should," "anticipate," "believe," "expect," "intend," "estimate," "hope," or similar expressions. Forward-looking statements are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy or are otherwise beyond our control and some of which might not even be anticipated. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date they are made. Future events and actual results affecting our strategic plan as well as our financial position, results of operations and cash flows, could differ materially from those described in or contemplated by the forward-looking statements. Important factors that contribute to such risks include, but are not limited to, a default or catastrophe involving the properties in which we invest, the extent to which we are able to raise additional capital, and competition for additional investment opportunities. We undertake no obligation to update or revise any forward looking statement, whether as a result of new information, future events or otherwise. For a more detailed description of these uncertainties and other factors, please see our website at www.regencyaffiliates.com.
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SOURCE Regency Affiliates, Inc.