TG Residential to Acquire Residential Property in Manitoba as Qualifying Transaction

VANCOUVER, Feb. 4, 2013 /PRNewswire/ - TG Residential Value Property Ltd. (TSXV: TG.P) (the "Company"), a Vancouver-based Capital Pool Company listed on the TSX Venture Exchange (the "Exchange"), is pleased to announce that it has entered into a purchase and sale agreement to acquire a residential and commercial real estate property located in Winnipeg, Manitoba (the "Property") from Taurean Latitude 1 Multifamily LP (the "Vendor").

The purchase of the Property, if completed, will constitute the Company's "Qualifying Transaction" under the policies of the Exchange. The acquisition (the "Acquisition") of the Property as the Company's Qualifying Transaction is subject to approval of the Exchange (the "Exchange Approval"), which approval is evidenced by the publication of the Exchange bulletin (the "Exchange Bulletin") announcing such approval. The purchase of the Property is an arm's length transaction and, in accordance with Exchange policies, will not be subject to shareholder approval.

Acquisition of Property

Under the agreed upon terms of the Acquisition, the Company will purchase the Property from the Vendor.

The Company has paid a non-refundable deposit of $25,000 and a refundable deposit of $125,000 to the Vendor.

The purchase price to be paid to the Vendor for the Property shall be as follows:

  1. the $150,000 in deposits already advanced to the Vendor;

  2. $2,773,000 in cash, subject to customary adjustments at closing;

  3. new mortgage financing in the amount of $10,500,000 on the Property;

  4. a second mortgage back to the Vendor in the amount of $1,500,000 with a term of one year bearing an annual interest rate of 8%;

  5. 2,750,000 units of the Company comprising 2,750,000 common shares of the Company and 2,750,000 warrants of the Company, each warrant grants the holder the right to purchase one common share of the Company at a price of $0.30 per share for a period of 36 months after closing of the Acquisition, which warrants will be subject to the provisions of the Acceleration Right set out below;

for a total consideration of $15,473,000.

The purchase price for Property is based on the appraised value of the Property in a current independent appraisal.

The portion of the purchase price to be paid in cash will be funded through the Company's current working capital and the proceeds of the brokered private placement described below.

The Company's obligation to complete the purchase of the Property is subject to the Company receiving Exchange Approval of the Acquisition.

About the Property

The Property is a newly renovated former commercial building consisting of six storeys. The building currently consists of retail commercial space on the first floor and basement levels and five storeys of apartment units above the commercial space. The civic address of the Property is 100 Princess Street, Winnipeg, Manitoba.

The commercial floor space is presently 100% occupied and the residential units are 60% rented by unit count. Once the residential units are completely leased it is anticipated that the aggregate monthly rent from the retail commercial space and the residential units will be well in excess of $120,000 per month.

The Vendor

The Vendor is a limited partnership, the general partner of which is Taurean Latitude I GP Inc., an Alberta company controlled by Ashish Garg. The Vendor owns 100% of the Property.

Private Placement

The Company has appointed MGI Securities Inc. ("MGI") as its exclusive agent for a brokered private placement using the "Accredited Investor" and "Offering Memorandum" prospectus exemptions, where applicable in the following proposed jurisdictions: British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Nova Scotia and Newfoundland and such other jurisdictions as the Company and MGI may agree, on the terms set out below (the "Financing").

The terms of the Financing are as follows:

  • A minimum of 20,000,000 and a maximum of 45,000,000 subscription receipts (the "Subscription Receipts") at a price of $0.20 per Subscription Receipt, where each Subscription Receipt will be automatically exchanged for one (1) unit (each a "Unit") in the capital of the Company upon completion of the Qualifying Transaction (the "Closing"), which will be evidenced by the publication of the Exchange Bulletin.

  • Each Unit to be comprised of one common share of the Company (a "Unit Share") and one common share purchase warrant (each such whole warrant, a "Warrant").

  • Each Warrant will entitle its holder to purchase one common share of the Company at an exercise price of $0.30 for a period of 36 months from the date of Closing.

  • The Warrants will be subject to an accelerated expiry date if the Company's common shares trade at $0.40 or higher for a period of 20 consecutive trading days after the date that is 12 months after the date of Closing (the "Acceleration Right").

  • The Company will pay MGI a cash commission of up to 8% of the aggregate proceeds raised under the Financing and issue MGI compensation options (the "Agent's Compensation Options") to purchase that number of units (the "Agent's Units") as is equal to up to 8% of the aggregate number of Units issued pursuant to the Financing, each Agent's Compensation Option being exercisable at an exercise price of $0.20 per Agent's Unit for a period of 36 months from date of Closing. Each Agent's Unit will be comprised of one common share of the Company and one common share purchase warrant of the Company (an "Agent's Warrant"), where each Agent's Warrant is exercisable into one common share of the Company at an exercise price of $0.30 for a period of 36 months from the date of Closing.

  • The proceeds of the sale of the Subscription Receipts will be held in escrow (the "Escrowed Proceeds") pending publication of the Exchange Bulletin. Upon publication of the Exchange Bulletin, the Escrowed Proceeds will be released to the Company. Upon receipt of the Escrowed Proceeds, the Subscription Receipts will be automatically exchanged into the underlying Unit Shares and Warrants. Proceeds of the Financing will be used to fund the Acquisition, cover the costs of the Financing and for general working capital purposes.

The Company plans to rely on an exemption from the Exchange requirement to engage a Sponsor for its Qualifying Transaction.

The Resulting Issuer

On closing of the Acquisition and the Financing, the Company will be classified as a real estate issuer and, assuming completion of the maximum Financing, will have 56,750,000 common shares, 47,750,000 Warrants, 500,000 agent's options (issued in connection with its IPO) and 3,600,000 Agent's Compensation Options (as such options are more fully described above) outstanding. A total of 900,000 incentive stock options will also be outstanding. After completion of the Qualifying Transaction, the Company plans to focus on acquiring and holding residential multifamily apartment buildings.

The Company expects that there will be no change to the insiders of the Company upon completion of the Acquisition and that the directors and officers of the Company will remain as follows:

Douglas Thiessen, President, CEO and Director

In 2004, Mr. Thiessen joined Prestigious Properties Group, a real estate holding company, initially as a consultant and then as General Manager. He is now the CEO of Taurean Global Properties, which acts as General Partner for three Limited Partnerships that hold apartment properties in Canada as well as various agricultural lands located in Argentina.

William Byers, Chief Financial Officer, Corporate Secretary and Director

Mr. Byers is a business executive and private real estate investor. He is currently the CFO of TitanStar Properties Inc., a real estate company listed on the Exchange and the CFO and a director of Victory Ventures Inc., a junior mining exploration company listed on the Exchange.

Richard Turner, Director

Since 1995, Mr. Turner has been president and chief executive officer of TitanStar Investment Group Inc., a private equity business. He served as chair and a director of the British Columbia Lottery Corporation from 2001 to 2005. Mr. Turner is currently the President, CEO and a director of TitanStar Properties Inc., a real estate company listed on the Exchange.

Graham McLennan, Q.C., Director

Mr. McLennan is a senior partner with McLennan Ross LLP. He has extensive experience in civil and commercial litigation, class action proceedings, construction disputes and defamation matters. He has appeared in all levels of court in Alberta and the Northwest Territories as well as the Federal Court and the Supreme Court of Canada. In 2008 he was appointed Queen's Counsel.

General

Completion of the transaction is subject to a number of conditions, including but not limited to, Exchange acceptance. There can be no assurance that the transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the filing statement to be prepared in connection with the transaction, any information released or received with respect to the transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.

The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.

Trading in the Company's common shares on the Exchange will be halted pending completion of the Qualifying Transaction.

ON BEHALF OF TG RESIDENTIAL VALUE PROPERTIES INC.

"Douglas Thiessen"

Douglas Thiessen
President, Chief Executive Officer and Director

THE TSX VENTURE EXCHANGE DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.

This press release includes "forward-looking information" within the meaning of applicable Canadian securities laws, including information regarding the Acquisition, the Financing and the Company's business upon completion of the Qualifying Transaction. Users of forward-looking information are cautioned that actual results may vary from the forward-looking information disclosed in this press release. The material risk factors that could cause actual results to differ materially from the forward-looking information contained in this press release include, risks related to Exchange approval of the Qualifying Transaction, the risk of not obtaining mortgage financing for the Acquisition, the risk that there are not sufficient subscriptions for the Financing, and all of the other risks and uncertainties normally associated with the acquisition of residential real estate and the completion of a Qualifying Transaction. The forward-looking information contained in this press release represents management's best judgment of future events based on information currently available. The material assumptions used to develop the forward-looking information include: that Exchange approval of the Qualifying Transaction will be obtained, that mortgage financing will be obtained, that the Financing will be completed and that the Acquisition will not be affected by an unforeseen events. The Company does not assume the obligation to update any forward-looking information, except as required by applicable law.

SOURCE TG Residential Value Property Ltd.




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