Parkit announces completion of 15% IRR hurdle within the OP Holdings JV LLC
VANCOUVER, Oct. 19, 2018 /CNW/ - Parkit Enterprise Inc. ("Parkit" or the "Company") (TSXV: PKT; OTCQX: PKTEF) is extremely pleased to announce it has reached its 15% IRR target owed to the Managing Member of the OP Holdings JV LLC (the "Joint Venture"). This occurred due to the sale of Expresso Airport Parking (the "Sale"). Due to the fulfillment of this 15% IRR hurdle, cash flows from future sales and refinances within the Joint Venture will flow to PAVe, an entity in which Parkit has an 82.43% interest, until PAVe has received a 15% IRR. PAVe is a 29.45% equity member of OP Holdings JV LLC. For more information on the Joint Venture and the priority of future payments, please refer to the OP Holdings JV LLC, posted to SEDAR on April 23, 2018.
Furthermore, as a result of the Sale, Parkit has received sale proceeds of US$245,025.38, representing the amount owed to Parkit over and above the Joint Venture 15% IRR Hurdle.
"This is a major development in Parkit's history. For the first time since entering into the Joint Venture in 2015, Parkit will be the beneficiary of asset sales and refinances that occur within the Joint Venture. From now on, proceeds from sales or refinances of the four assets within the Joint Venture will flow to PAVe, an entity in which Parkit holds an 82.43% interest," stated David Delaney, Parkit's Executive Chairman.
Parkit would like to congratulate its shareholders as well as its partners, Och-Ziff Real Estate and Propark America, on the completion of this milestone.
For further information on the Company please see the Company's financial statements and related management's discussion and analysis for the year ended October 31, 2017 and the nine month period ended July 31, 2018 available under the Company's profile on www.sedar.com.
About PARKIT
Parkit Enterprise Inc. is engaged in the acquisition, optimization and asset management of income producing parking facilities across the United States. The Company's shares are listed on TSX-V (Symbol: PKT) and on the OTCQX (Symbol: PKTEF).
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Certain statements in this release are forward-looking statements. Forward-looking statements consist of statements that are not purely historical, including any statements regarding beliefs, plans, expectations or intentions regarding the future. Such statements are subject to risks and uncertainties that may cause actual results, performance or developments to differ materially from those contained in the statements. No assurance can be given that any of the events anticipated by the forward-looking statements will occur or, if they do occur, what benefits the Company will obtain from them, if any.
NON-GAAP FINANCIAL MEASURES
This release contains a non-GAAP financial measure. The definition and calculation of this non-GAAP financial measure may differ from the definitions and methodologies used by other companies and, accordingly, may not be comparable. The non-GAAP financial measure referred to below should not be considered an alternative to net income as an indication of our performance. In addition, this non-GAAP financial measure does not represent cash generated from operating activities in accordance with GAAP and therefore should not be considered as an alternative measure of liquidity or as indicative of cash available to fund cash needs.
Levered Internal Rate of Return ("IRR") is calculated as the internal rate of return on the Joint Venture's equity investment in the property considering the timing and amounts of capital contributions paid, and all distributions received. Management believes that the levered IRR achieved during the period a property is owned by the Joint Venture is useful because it is one indication of the gross value created by the Joint Venture's acquisition, management and ultimate sale of a property, before the impact of Joint Venture's overhead and taxes. However, leveraged IRR is not a substitute for net income as a measure of our performance.
The levered IRR achieved on the property as cited in this release should not be viewed as an indication of the gross value created with respect to other properties owned by the Joint Venture, and the Company does not represent that the Joint Venture will achieve similar levered IRRs upon the disposition of other properties. The levered IRR cited in this press release is from the perspective of the Joint Venture, in which the Company has an economic interest.
Under GAAP, the Company recognizes its investment in the Joint Venture using the equity method whereby the carrying value of the investment is adjusted for the Company's share of the profit and loss of the Joint Venture, and decreased for any distributions received by the Joint Venture. All amounts reported by the Company from the Joint Venture are translated into Canadian dollars. The gain on the disposition of the property will have an impact on the amount reported by the Company for its share of the GAAP net profit from the Joint Venture.
SOURCE Parkit Enterprise Inc.
David Delaney, Executive Chairman, Tel. (416) 951-9214, Email: [email protected]; Avi Geller, Executive Director, Tel. (845) 517-2340, Email: [email protected]
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