CALGARY, Alberta--()--Walton Westphalia Development Corporation (the “Corporation”) announces that it has completed its final closing on its previously announced private placement offering. The Corporation closed on aggregate proceeds of $15,748,700 and issued 1,574,870 units at a price of $10.00 per Unit under the private placement.
The private placement consisted of a non-brokered private offering of up to 2,007,700 units at a subscription price of $10.00 per Unit. Each Unit is comprised of $5.00 principal amount of 8% unsecured, subordinated, convertible, extendable debentures (the “Debentures”) and one non-voting share of the Corporation having a price of $5.00 (the “Shares”).
As previously announced on August 21, 2012, the Corporation’s wholly-owned subsidiary, Walton Westphalia Development (USA), LLC (the “US Subsidiary”) entered into assignment and co-ownership agreements with Walton Maryland, LLC (“Walton MD”) and Walton Westphalia Europe, LP (“WWE”), an entity managed by the Walton Group of companies. Under the agreements, WWE proposed to acquire from the US Subsidiary up to a 30.67% undivided interest in the 310-acre Westphalia development project located in Prince George’s County, Maryland, USA (the “Property”).
Effective October 31, 2012, WWE acquired an additional 3.1% undivided interest in the Property, for an aggregate ownership interest in the Property of 14.4%. WWE paid the same purchase price per acre as the US Subsidiary paid to acquire the Property plus other costs paid at closing. The proceeds received from the sale of the interests in the Property to WWE was used by the Corporation to repay a portion of the related party loan provided by Walton International Group Inc. to partially fund the purchase by the US Subsidiary of the Property. As of October 31, 2012, this related party loan has been repaid in full as a result of the aggregate proceeds raised under the private placement and the sale of the further interests in the Property to WWE.
All revenues and expenses incurred for development of the Property will be allocated proportionately based on each party’s ownership interest in the Property, which is not expected to impact the ability of the Corporation to achieve its investment objectives.
As indicated above, the Corporation has now terminated its private placement offering. As a result, since and including its prospectus offering, which was completed on March 20, 2012, the Corporation has issued an aggregate 3,017,170 shares and $15,085,850 principal amount of Debentures for aggregate proceeds raised of $30,171,700. The Corporation, through the US Subsidiary, holds a 85.6% undivided interest in the Property in co-ownership with WWE LP which holds a 14.4% undivided interest in the Property.
The Corporation has been incorporated to provide investors with the unique opportunity to participate in the returns available on the residential and commercial development of the Property. The Corporation’s investment objectives are to (a) preserve the capital investment of the purchasers in the Units; (b) make annual cash distributions on the Units (comprised of payments of interest and/or principal on the Offering Debentures and/or dividends or other distributions on the Shares) beginning in June 2013 until the final distribution of funds from the Project, which is anticipated to be in March 2019; and (c) achieve a net internal rate of return of 15.0% on the $10.00 purchase price of the Units from the cash distributions referred to in (b) above.
The Corporation is managed by Walton Asset Management L.P., and development of the Property is managed by Walton Development & Management (USA), Inc., both of which are part of the Walton Group.
The Walton Group is a multinational group of real estate investment and development companies headquartered in Calgary, Alberta, Canada. Walton’s expertise is the research, acquisition, management and development of strategically located land in major North American growth corridors. With over 68,000 acres of land under management, the Walton Group is one of North America’s premier land asset managers. Walton manages and/or owns land assets in Phoenix, Austin, Dallas, Atlanta, Charlotte, the Washington D.C. region, Ottawa, Toronto, Edmonton and Calgary.
This news release, required by Canadian laws, does not constitute an offer of securities, and is not for distribution or dissemination outside Canada. This news release contains forward looking information, and actual future results may differ from what is disclosed in this news release. The risks, uncertainties and other factors that could influence results are described in the prospectus and other documents filed with Canadian securities regulatory authorities and available online at www.sedar.com.