SARGASSO CAPITAL CORPORATION ANNOUNCES PROPOSED QUALIFYING TRANSACTION WITH
STRATHALLEN ACQUISITIONS INC.

/Not for Distribution to the United States Newswire Services or for Dissemination in the United States/

TORONTO, Dec. 30 /CNW/ - SARGASSO CAPITAL CORPORATION (TSXV: SGO.P) (the "Corporation"), a capital pool company, announced today that it has entered into a letter of intent on December 24, 2010 that serves as an agreement in principle concerning a proposed transaction (the "Transaction") between the Corporation and Strathallen Industrial Properties Inc. ("Strathallen") which, if completed, will be the Corporation's qualifying transaction pursuant to the policies of the TSX Venture Exchange Inc. (the "Exchange").

Strathallen Industrial Properties Inc.

The Corporation and Strathallen intend to create a corporation with substantial real estate holdings specializing in industrial properties across Canada, with the aim of becoming a REIT when business and market conditions are appropriate. Strathallen is a company that will be incorporated by Strathallen Capital Corp. for the purposes of this transaction.

The Strathallen Capital Corp. group of companies (the "Strathallen Group") owns and manages numerous retail and industrial properties across Canada. Strathallen Capital Corp. was established in 2003 by David Wright and Brian Spence. Mr. Wright and Mr. Spence have been active in property investment for over 30 years and senior team members have been providing real estate advisory services as co-investing principals for more than a decade. They are supported by an in-house financial, analytical and administrative team.

Since its inception, Strathallen Capital Corp. has completed over $575 million in real estate transactions. Its current platform of assets under management comprises over $445 million of retail and industrial properties. The Strathallen Group also provides asset management and administrative services.

Strathallen, a company to be incorporated, intends to enter into one or more purchase agreements with third parties to acquire industrial properties. The closing of the purchase transactions shall be conditional upon completion of the Transaction.

Effective on the completion of the Transaction, the resulting issuer (the "Resulting Issuer") will enter into an asset management agreement with Strathallen Capital Corp. concerning the acquisition, financing and management of industrial properties acquired by the Resulting Issuer.

More information concerning Strathallen Capital Corp. is available on its website: www.strathallen.com.

Transaction Summary

The Transaction will consist of a number of steps including the following:

(a)	Strathallen will conduct a private placement in an amount of no less than $2,000,000 (the "Private Placement").
(b)	The Corporation shall establish a wholly-owned subsidiary ("SubCo") under the laws of Ontario.
(c)	SubCo will amalgamate with Strathallen whereby the continuing entity will be a wholly-owned subsidiary of the Corporation and the security holders of Strathallen will receive securities in the Corporation in exchange for their interests in Strathallen.
(d)	The existing directors and officers of the Corporation, with the exception of Richard McGraw, will resign their positions upon completion of the Transaction. The Corporation will increase its board of directors from four to five and nominees representing Strathallen, including Christopher Ross who is the senior vice president of Strathallen Capital Corp., will be elected or appointed as directors and officers.

The Transaction is an arm's length transaction.  No related party of the Corporation has any interest in Strathallen.  Accordingly, the Transaction will not, as currently contemplated, be subject to approval by the shareholders of the Corporation. 

The parties intend to apply for an exemption from sponsorship requirements under the policies of the Exchange. 

Share Capital

There are currently 8,000,000 common shares issued and outstanding in the capital of the Corporation.  In addition, there are 1,040,000 common shares reserved for issuance under the Corporation's stock option plan and in favour of the Corporation's IPO agent. The common shares in the capital of the Corporation for the purposes of the Transaction have been valued, subject to adjustments, at $0.15 per share. 

Strathallen will complete a private placement (the "Private Placement") of shares (the "Strathallen Shares") at a price of $0.15 per share for gross proceeds in a minimum amount of $2,000,000.

Each Strathallen Share outstanding immediately prior to the amalgamation of SubCo and Strathallen becoming effective will be exchanged for one share in the capital of the Resulting Issuer. Assuming $2,000,000 is raised by way of the Private Placement, an estimated 13,333,333 common shares in the capital of the Corporation will be issued to the Private Placement investors.  No shares in the capital of Strathallen will be issued other than pursuant to the Private Placement and the property acquisitions.

Transaction Date Extension and Trading Suspension

The Corporation is a capital pool company and, in accordance with Policy 2.4 of the Exchange, is obliged to complete a qualifying transaction on or before January 23, 2011. Assuming the Corporation does not complete a qualifying transaction before such time, the Corporation will apply for an extension of the date to complete a qualifying transaction to April 30, 2011. The Corporation expects to complete the Transaction on or before April 30, 2011.

Conditions

Completion of the Transaction is subject to a number of conditions, including but not limited to, completion of the Private Placement, negotiation and signing of a definitive business combination agreement, approvals of the board of directors of Strathallen and the Corporation, Exchange acceptance, shareholder approval of the share consolidation, name change and change of auditors.  The Transaction cannot close until all the conditions are satisfied.  There can be no assurance that the transaction will be completed as proposed or at all.

A comprehensive press release with further particulars of the Transaction will follow in accordance with the policies of the Exchange.  Trading in the common shares of the Corporation will remain suspended pending the release of more fulsome disclosure regarding the Transaction and the satisfaction of the filing requirements of the Exchange.

As noted above, completion of the transaction is subject to a number of conditions, including but not limited to, Exchange acceptance and if applicable pursuant to Exchange requirements, majority of the minority approval.  Where applicable, the Transaction cannot close until the required shareholder approval is obtained.  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.

Certain information in this press release may contain projections and forward-looking statements. This information is based on current expectations that are subject to significant risks and uncertainties that are difficult to predict. Actual results might differ materially from results suggested in any forward-looking statements. The Corporation assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward looking-statements unless and until required by securities laws applicable to the Corporation. Additional information identifying risks and uncertainties is contained in the Corporation's filings with the Canadian securities regulators, which filings are available at www.sedar.com.

The TSX Venture Exchange Inc. has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved of the contents of this press release. Neither TSX Venture Exchange Inc. nor its Regulation Services Provider (as that term is defined in the policies of TSX Venture Exchange Inc.) accepts responsibility for the adequacy or accuracy of this press release.

For further information:

For further information, contact Richard D. McGraw, President, Chief Executive Officer, Chief Financial Officer and Secretary, at:

Telephone: [phone]
E-mail: [email protected]